Advances in technology, data, and marketing sophistication are continuing to change the way that every industry conducts business, including the financial services market.
With an increasing amount of customers using digital channels to access a variety of financial services, businesses in this market need to adapt to meet growing demand and changing customer needs.
Notably, personalisation is a tactic that is being demanded by consumers, with 50% of them actually wanting financial services to offer a more personalised experience.
However, financial institutions are seen as one of the poorest when it comes to personalisation, with only 14% of customers describing these institutions as being “extremely effective” at delivering relevant experiences and offers.
It’s clear there is a disconnect between the success that personalisation can bring to the financial services market, and actual uptake.
At Jarrang, we appreciate the importance of financial services to consumers and businesses alike. So we want to help.
In this blog post we start at the very beginning, explaining exactly why personalised campaigns are important in this industry.
Consumers today are not only looking for, but demanding sophisticated, immediate, and personalised experiences in all of the industries they engage with.
And with customer experience predicted to overtake price and product as a brand differentiator, offering the experience that consumers demand is more important than ever.
As we previously mentioned, 50% of consumers want financial institutions to be more proactive in offering them relevant financial information and advice. And they are willing to share their data as long as they receive content and offers tailored to their needs.
So, when consumers are so open to supporting financial services, their failure to meet these expectations isn’t taken lightly.
For businesses that practise it, personalisation is recognised as a key revenue driver. Research by McKinsey found that those executing personalisation at a foundation level see revenue lifts of between 5-10%, with increased maturity resulting in a 10-20% increase, and a 25% increase driven at the “transformational” level.
On a more granular level, customers are more likely to opt for a business that practises personalisation. With 75% of consumers being more likely to make a purchase from a company that recognises them by name, recommends options based on their past purchases, or acknowledges their purchase history.
And in terms of customer retention, 87% of consumers state that personally relevant content positively influences how they feel about a company in a positive way. Making this tactic essential for financial institutions looking to both attract new customers whilst retaining existing ones.
Financial services are already aware of the significance of personalisation in improving their revenue. Meaning that competition within the industry is progressing rapidly.
In fact, almost 75% of decision-makers in this market are planning to increase their investment in personalisation, with 28% of them planning to increase it substantially throughout the customer lifecycle.
According to a study by Forrester, businesses that have matured in personalisation are almost three times more likely to surpass their goals in cross-selling and customer acquisition compared to low-maturity businesses.
These businesses understand that personalisation is not just about knowing the customer’s name or tailoring their acquisition, but encompasses the customer journey as a whole. Providing a financial experience that impacts the value brought to the customer by fully understanding them.
The fact is that the majority of consumers have already moved to a primarily digital banking experience, with 45% having moved to mobile and 27% now using the web.
No matter what the personalisation sophistication of financial institutions, the need to move to a more digitised service is inevitable. And with that comes the necessity to personalise experiences.
As mentioned, competition is ramping up when it comes to personalisation in this sector, so any brands that fail to embrace digitisation will quickly fall behind. Losing new and current customers to their more digitally-savvy competitors.
According to a survey conducted by The Financial Brand, 84% of respondents in financial services identified proactive engagement and delivering personalised guidance as key goals for their business.
Furthermore, gathering relevant, first-party data is one of the main hurdles to executing personalised campaigns. But businesses in the financial services market have access to a wealth of it.
So what is holding them back?
Nearly 75% of these respondents lack confidence in their ability as a company to execute personalised engagement, and less than 20% consider themselves to be doing a good job at personalisation at all.
The willingness and the data is available to these businesses, but it’s their ability that is holding them back. And with strict compliance and regulations being upheld within this industry, it’s perhaps not surprising it is hesitant to change.
Which takes us onto our next steps…
It’s clear that the financial services market is changing, fast.
But to build deeper relationships, maintain a competitive edge, and future-proof themselves, businesses in this industry must embrace meaningful personalisation.
Despite hesitancy in ability, we’re confident that with the right support, education, and encouragement from an email marketing agency, this industry could be making strides in personalisation.
If you’re a business in this sector and are keen to embrace digital transformation, then get in touch with us at Jarrang.