Financial Services Companies: Using Data To Get Personal
Digital technology is enabling companies to get very personal with their customers. One financial services firm is using technology to give travelers more peace of mind in the event their next airline flight is delayed. AXA, a French insurance company, recently started testing a product called Fizzy, which will reimburse you immediately if your plane is more than two hours late. The fully automated system, which uses blockchain encryption technology for security, is indicative of a new wave of value-added financial services for consumers.
Financial service companies like AXA understand that they have to leverage content, data, and analytics to deliver personalized, relevant, and real-time product recommendations to their customers. Personalization of financial services requires three key ingredients: curated content for each individual customer, personalization interactions that inform the customer’s journey, and real-time delivery of targeted content across any platform, at any time.
Fizzy is indicative of how technology can help financial services companies deliver customer solutions that integrate content curation, personalization, and real-time responsiveness. “The concept of insurance on demand isn’t anything new,” says Christopher Young, director of industry strategy and marketing at Adobe. “But the ability to offer on-demand flight delay insurance is an entirely new business.”
AXA’s product uses what is called parametric insurance because it uses a parameter to trigger the performance of a contract. Fizzy is connected to global air traffic databases, so as soon as a delay of more than two hours is observed, compensation is sent automatically. In order for Fizzy to work, it needs the ability to process massive amounts of data, ranging from a person’s location to flight status data. A personalized recommendation for flight delay insurance that a customer might receive on the way to the airport is the product of data, technology and artificial intelligence all coming together to offer the right experience at the right time.
Delivering curated customer content
One challenge for the financial services industry is developing and implementing technology that benefits both the marketer and the consumer. “While personalized target marketing resonates with consumers,” says Young, “it is even more important for the marketers. But where the use of technology starts to really transform the customer experience is when it reduces friction by making it easier for the consumer to complete a transaction.”
Nedbank in South Africa is an example of a company that has significantly improved customer experiences by making it easier to do business with the bank. Nedbank started by using analytics to understand what features and channels its customers were using, what content they were consuming, and what forms they were using most often. Armed with those insights, the bank’s challenge was to simplify forms and streamline the online experiences for its customers.
Using analytics, Nedbank identified 20 forms that accounted for 96 percent of the total form volume. They also identified the forms customers abandoned most often without completing. Based on those insights, the bank streamlined form fields, and added better functionality, such as auto-populating fields. The bank also reduced its total number of form templates from 224 to 38, a benefit for both customers and bank sales teams.
“Using a single management platform to streamline our forms was a major force in simplifying how we interact with customers,” says Lizelle Vaughan, program director for digital experience management at Nedbank. “We can cut seven-step processes down to four steps with more control over each form. Additionally, we output completed forms to PDF, giving the customer a copy to help ensure accuracy, and add a layer of hands-on service.”
Vaughan says a more responsive web design also included mobile-friendly forms to help customers do business on whatever platform or device they choose. “Creating an online identity is a challenge,” she says. “Then throw-in different screen sizes, operating systems, and interfaces, and it dramatically complicates how experiences are created and delivered.”
Consistency of experience, brand, and usability were all key ingredients in Nedbank’s shift to developing a more customer-centric online experience. The result was a 142 percent increase in the completion of online forms. Moreover, the bank’s centralized marketing platform provides more consistently in content delivery, and better connects its customers across desktop and mobile platforms.
Adobe’s Christopher Young says Nedbank is indicative of how technology can be used to deliver better customer experiences. “It is all about consistency of message, relevance, and curation of experiences that takes a single individual and makes them feel like you’re having a one-to-one communication with them about what they care about,” he says.
Personalization across the customer journey
Financial services companies already are using technology for much more than improved marketing and account management. “Your underlying technology needs to go beyond the role of simply marketing into real-time interactions with your customers,” says Christopher. “Improving the customer journey means helping customers make smarter decisions about something they need to buy, how they should pay, or how they can protect themselves from fraud.”
Banks in China, for example, have been using facial recognition technology at ATMs since 2015. One of the most recent banks to start using the technology to authenticate users is the Agricultural Bank of China (ABC). “All you have to do is to press the facial recognition withdrawal button, scan your face in the camera, enter your phone number or ID number, and enter your transaction amount and password,” says Zhang Baojing, a banking manager at ABC.
Christopher Young says facial recognition verification is an example of how banks can deliver better customer experiences by helping to ensure the integrity of customer accounts. “This is an example of how technology is adding value for consumers,” says Christopher. “This really has nothing to do with direct marketing. It’s all about helping customers safeguard their accounts.”
Automation and technology also offer solutions to help better educate customers, often via self-service mechanism, such as interactive set of online questions. “Automation can translate into a really efficient experience because it also can help explain a product to the customer,” says Christopher.
Not only does automation lead to better conversion rates, it will put a company’s products and services into more meaningful context. “One thing the financial service market lacks is the understanding that the person they’re talking to doesn’t really understand the products they’re selling,” says Christopher. “With insurance,” for example, “most people find out after an accident happens exactly what they are covered for. The transparency of coverage should be up-front, and the explanation should be clear. “
Personalization also provides multiple ways for financial services companies to provide meaningful incentives. For example, says Christopher, rather than just trying to sell a product on rate, a bank might recognize that you are using your debit card repeatedly for purchases in specific areas. “That could lead to an automatic offer that if you were to open a credit card account, those purchases you’ve been making with your debit card would earn you reward points with additional monetary value,” he says.
Real-time solutions start with good data
Once financial institutions have a granular understanding of their customers, automation, machine learning, and AI can help deliver personalized content and solutions. “You can deliver content in real-time, powered by AI, that is based on who your customer is, and where they are in your online ecosystem,” says Christopher. “Harnessing data in an automated personalization engine also enables you to personalize and customize content that is immediately relevant to where every customer is on their journey.”
At South Africa’s Nedbank, for example, data about which operating systems and devices customers use most frequently is now being used to help develop digital marketing and development strategies. “As a result, Nedbank can move past making decisions based on hunches and instead rely on data-driven decisions for real, measurable impacts,” says Christopher.
In fact, the digital transformation in the financial services industry is being driven by a realization that technology can be used to more effectively leverage mass amounts of data to improve everything from content marketing to sales conversions. According to a 2017 report by Adobe and Econsultancy, most companies across the financial services sector said they plan to increase their digital investments in the year ahead. Retail banking respondents are most likely to do so (76 percent), ahead of insurance (71 percent) and investment firms (65 percent).
Looking ahead, 90 percent of digital leaders in financial services said they have started to apply artificial intelligence in their customer-facing areas or have prioritized it for 2017, compared with 78 percent of respondents for all industry sectors, according to the report.
Understanding your customers
Ultimately, adds Christopher, delivering personalized solutions requires a deep understanding of the customer. “Any form of personalization depends on unified data sources that give you a common understanding of an individual across the enterprise,” he says. “But the challenge in the financial sector is to get this data out of organizational silos and into a common database. The key is to unify specific data sources so that, for example, you can use a unique customer ID in multiple places. Once you can unify the profile of an individual, you can identify that person at every touch point along their journey.”
The ability to aggregate and automate data analysis enables financial services companies to use technology to bridge digital and physical experiences. “AI then provides a way to sort through information on millions of customers in order to identify the meaningful tidbits of information that could be used to identify and interact with each individual person across multiple touchpoints,” he says.
Another challenge is how to automatically authenticate customers. “I think where it gets harder is with cross device stitching, and identifying a single individual with a number of different devices,” adds Christopher.
But the answer to the authentication question is evolving as technology, such a blockchain encryption and facial recognition, is successfully deployed in the marketplace. Early adopters, such as AXA and Nedbank, are proving that technology is the linchpin for improving both customer experiences and outcomes.
Unlocking data potential with automation and AI
Managing data in order to facilitate personalized customer experiences and product recommendations at scale can only be accomplished with automation and AI. “You need an integrated technology platform to really make sense of all of the data that you have to combine and operationalize,” Christopher says. “You need a data platform and content management system that can analyze and make sense of all of that data so that it can be used to deliver relevant content to your customers across every touchpoint.”
The underlying takeaway for financial institutions is that technology is the key for harnessing the power of their data. “The value of digital is not just the value to me, in terms of the marketer in cross-selling, but the value of digital to every customer,” says Christopher. “Mobility, artificial intelligence, facial recognition, these things, on a foundational level, are kitschy, cool, and important. But what’s important is that they are tools for building an experience business, through data and technology, that can enable and unlock extreme value through digital channels.”
For more insights on how financial institutions are adopting new technologies for more personal customer experiences, read more from our digital marketing FSI Disruption Series.
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