Personalization of Payments Can Generate Loyalty

Using consumer information to build offers and interactions specific to an individual is not really a new technique…but it is an effective one and can help to build loyalty for financial institutions in a time when accountholders can easily change institutions with a few clicks.

The desire for personalized communication is driven by the growth of the digital space and may seem at odds with another main concern for consumers like security – especially in regards to their financial information. In fact, a study by Deloitte found that 61 percent of consumers who do not regularly use mobile devices for financial services cited security as their primary reason. But banks and credit unions need not be left behind simply due to consumer wariness.

CEB, a best practice insight and technology company responsible for popular conferences such as the CEB Financial Services Technology Summit, reports that digital customers are not just relegated to the younger crowd – they comprise all ages and are more likely to interact, buy and have money.

Retailers like Amazon and Netflix are the perfect example of a behavior-based personalized experience – and personalization marketing.

Consumers utilizing Amazon’s website are met with custom pages built with data from past views and purchases. Viewing or moving to purchase a product garners a featured area of products fitting general interests, including the interests of individuals who have also purchased the specific product. Amazon also uses the information to create “you may also be interested in” areas and other ads throughout the website experience. The more purchases and/or views a person has made, the more targeted the content becomes. Amazon’s success has pushed other companies to create similar interactions – both in retail and service.

Netflix, for example, applied the same principles when developing their DVD selection interface – and took it to the next level for their online video streaming services. The company is well-known for its content recommendations as well as its predictions of viewer appreciation for specific titles. Based on user feedback and viewing patterns, the system seeks to provide suggestions for future viewing and tailors its product presentation using these recommendations. The system is so personalized as to push users into developing individual user accounts within a household.

Building Accountholder Loyalty

Financial institutions have access to data capable of allowing the savvy bank or credit union to craft appropriate personalization and campaigns without directly addressing the information for which their account holders are most protective – their finances.

There are a number of ways banks and credit unions of all sizes can build a personalized portfolio for each of their account holders. These options include, but are not limited to:

  • Debit/credit card personalization
  • Special offers for birthdays and/or anniversaries (ex: Congrats on one year in your new home!)
  • Custom ATM configurations (ex:  selected “preferred withdrawal”)
  • Deals specific to general spending habits (ex: “unlocking” savings at a favorite retailer)
  • Social media interaction
  • In-branch community events
  • Digital budgeting and notifications tools
  • Digital “savings incentives”

Some level of personalization makes account holders feel their financial institution is relating to them and catering to their needs. As such, they are more likely to think and speak favorably of their institution, be loyal to that bank or credit union and turn to them when they are in need of further financial services – credit, automobile loans, home loans and more.

Paul Albright
An industry leader in the payments space, Paul Albright is Executive Vice President of Outsource ATM. 
Connect with Paul on LinkedIn or follow him on Twitter

Troy LeBlanc
President & CEO of Outsource ATM, Troy LeBlanc has been helping financial institutions address their ATM needs for almost 20 years.
Connect with Troy on LinkedIn or follow him on Twitter.