Digital Executive Forum: Financial Services

Digital Executive Forum Summary • March 16, 2023

Personalization Strategies

Key Takeaways:

• Fifi Ahmed opened the conversation on hyper-personalization, inviting Mahesh Raghavan to share insights. Many organizations are committed to delivering personalized experiences across digital channels, but to do so, they must recognize customers across touchpoints and obtain real-time behavioral insights, rather than relying solely on historical data.
• Once organizations understand their customers, they must curate and deploy the right experiences at the right time to make personalization effective. Knowing the best content to deliver to individual customers is important, but successfully prioritizing delivery and calibrating for the right engagement channels is key to reaching customers through personalization. Measuring and optimizing the effectiveness of different content is essential to adjust strategies for both individual customer relationships and the broader customer base.
• Raghavan identified several key challenges that banks and wealth management companies face with personalization. The fragmentation of customer information across different channels makes it difficult to synthesize a single customer identity. Some organizations are considering integrating third-party data for a more comprehensive, “720-degree” view of individuals. Beyond establishing identity, effectively categorizing and operationalizing customer profiles is another hurdle. Some organizations also struggle with individualized communication at scale, but are exploring key propensity and next best action (NBA) models, as well as dynamic creative solutions for micro-segmented content, to address this concern.

Considering Hyper-Personalization

Key Takeaways:

• One participant highlighted the difficulty of over-complication as their organization approaches hyper-personalization. They suggested it may be more effective to focus on leveraging basic information, such as age demographics, rather than capturing excessive data that will be challenging to utilize. Establishing a robust foundation for personalization is important before attempting to bring cutting-edge technology to customer-facing applications.
• Effective personalization is less about customized products and more about customized approaches, according to one executive. Rather than targeting individuals with hyper-specific offerings, organizations can improve their personalization strategies by leveraging data to communicate the most relevant message. Sometimes, the tone of engagement is as important as the content, enabling personal communication even when providing similar calls to action across large customer cohorts.
• Some contexts may not be ideal for hyper-personalization strategies. One member reflected on areas like the automotive industry, where hyper-personalization through highly configurable products complicates customer relationships and creates difficulties managing data. Direct indexing in the asset management space is another area where individualized products can cause complexities. The resources necessary to support hyper-personalization may exceed the value of incremental revenue increases from the resulting customer experiences.
• Finding the boundary between sufficient and excessive personalization is crucial for organizations to benefit from their efforts. Sometimes organizations may make erroneous decisions about personalization, which can become off-putting or tiresome for consumers. Examples included customers being directed to products they have already purchased, and clients being given enthusiastic hospitality when they would prefer a more casual interaction. Companies must also use discretion about how they utilize the extent of their customers’ personal information, as people react differently to prescriptive statements than to being asked questions.

Active Personalization

Key Takeaways:

• As organizations look to bolster their personalization strategies, some are seeking ways for customers to take a more active role in the process. One member has envisioned a guided experience based on client choice, similar to a “choose-your-own-adventure” story. Rather than passively making decisions based on limited data, an active personalization strategy empowers clients to make decisions by supporting them with robust information and institutional knowledge. Self-selection allows for more closely targeted content and advice, but a balance is necessary to avoid confusing customers with too many options or obscuring the value of the enterprise’s business expertise.
• In addition to opportunities for customer agency, effective personalization may sometimes involve simplifying the options presented to customers. One executive discussed this in terms of payment processing, where customers should not need knowledge of payment rails to send money through various channels. By asking simple questions about payment amount and delivery timing, they have been able to suggest appropriate rails without giving customers a decision they are not informed enough to make.