In the era of web3 and ‘everything digital’, highly personalised financial experiences aren’t only commonplace in banking, but thoroughly expected by customers too. With traditional high-street providers falling behind neobanks, the gap between branch-based banking and more personalised online experiences is widening.
To attract new customers, generate engagement and enhance loyalty, innovative strategies are now required.
Before diving straight into personalisation, it’s important to understand the core concept of open banking.
Open banking can be defined as an integrated technology system that connects financial institutions and third parties. The system provides the secure transfer of data, and reduces friction for a seamless customer experience.
Therefore, personalised open banking adds to the concept by incorporating the individual experiences of the customer or their specific historical data. For example, some of our clients at Bud use real-time transaction data (instead of, or in addition to, traditional credit reference agency data) to make lending affordability decisions.
Incorporating customised elements goes beyond the traditional interactions between consumer and bank, instead, offering the chance for financial institutions to better meet customer needs – and there has been a huge uptick in consumers switching their bank accounts.
Imagine instead, that your institution is able to automatically identify the segment of customers most at risk of switching, and target them with better offers or more personalised services?
Leveraging personalised customer insights through open banking can help with exactly that, while also increasing confidence in lending decisions and product up-sell rates.
Customer-consented data, obtained via open banking, can reveal a lot about an individual’s circumstances, financial position and preferences, for example:
Each of these personalised data subsets can be collected through the Bud framework, which prioritises data privacy and security.
When it comes to data collection and usage, consumer consent preferences mean customers always have the option to opt-in and out of having their data used by services.
Selecting 'yes' when opting in covers:
This is incredibly useful for financial institutions and third parties interested in leveraging personal information, since it sets the precedent for data transparency and builds trust with the consumer.
Every financial institution seeks to maximise engagement, as increased customer interaction is likely to grow their share of wallet.
For example, a customer might bank with company A but hold a credit card with company B. The customer is unhappy with the credit card, incurring high fees because they regularly forget to perform a balance transfer.
Thus, company A has an opportunity to steal market share from their competitor.
There are many other benefits to driving customer engagement, including:
Although the most prominent banks are focusing on their digital transformations, there is still a huge gap between the frontrunners of personalisation and those lagging behind.
An ongoing three-year benchmarking study by Peter Ramsay highlights this stark difference in terms of user experience. For example, challenger banks like Monzo and Starling update their app capabilities every five to six days, while traditional high-street banks like Co-op and Santander take between 50 and 80 days on average.
Fortunately, this is where Bud comes in.
Launch or revitalise your open banking offering through personalisation with our real-time transaction categorisation, merchant ID and customer insight capabilities.
Why not provide personalised support, targeted offers and improve customer satisfaction to build a better open banking experience and get ahead of the competition?
Looking to get started? Get in touch today
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