Pub. 13 2023-2024 Issue 3

Elevate Customer Engagement and Loyalty Through Personalization in Financial Advertising

The adage goes, “One size fits all,” but in today’s ever-evolving financial services landscape, one size does not fit all. The financial sector is undergoing a seismic shift towards personalized marketing campaigns that cater to individual needs and preferences.

For example, according to eMarketer, financial institutions must begin preparing for their next big wave of customers — Gen Zers. This customer demographic isn’t afraid to switch their financial institution if their needs aren’t met. They want authenticity and are likely to prefer banking digitally. Whereas Gen X and baby boomer demographics are fiercely loyal to the financial institutions they started with and often prefer more in-person interactions.

There are a few supporting reasons why personalization is so important when it comes to your financial institution:

  • When choosing a bank or other financial institution, consumers are looking for businesses that offer personal finance services, such as financial advisors or the ability to manage individual accounts remotely (Source: Insider Intelligence).
  • Consumers who routinely use their bank’s digital and mobile channels were found to have higher satisfaction levels than those who do so less frequently (Source: eMarketer).
  • 73% of respondents said a complete digital experience would improve their banking experience. Nearly half of their respondents also said they would leave their bank for one that offered a better digital experience (Source: WestMonroe, Banking Industry Outlook Report).

There’s a way to create personalized experiences for everyone — so let’s dive in more.

The Importance of Personalization

According to Twilio’s State of Customer Engagement Report, 66% of consumers would stop using a brand if their experience were not personalized. This report states that the brands overestimate how well they meet consumer expectations for communication preferences, protecting customer data privacy and transparency around customer data usage.

  • Consumers want a faster transition to a cookieless future. Nearly one-third of consumers always or often reject cookies on websites. Almost two-thirds of consumers prefer brands that only use first-party data to personalize their experience.
  • 81% of consumers say personalized experiences increase their loyalty to brands, and consumers spend, on average, 21% more with brands that personalize.
  • 40% of consumers say they’ve stopped doing business with a brand after their expectations for trust and privacy weren’t met.

Now more than ever is the time for financial institutions to begin thinking about their overall marketing and advertising strategy for personalization. These are the questions that need to be asked:

  1. How can you ensure your customer’s data privacy while running personalized campaigns?
  2. How can you maintain trust and loyalty with your customers?

The Power of Personalization: Beyond the Traditional Approach

Gone are the days when financial institutions could rely on generic advertisements to attract customers. Personalization is taking center stage, enabling institutions to craft tailored messages that resonate with individual clients and their unique needs and challenges. Personalization involves understanding each customer’s financial journey, goals and pain points.

Personalization in advertising for financial institutions is a strategic approach powered by data-driven insights. Financial institutions can create highly targeted campaigns by analyzing customers’ transactional histories, spending patterns, investment preferences and life stages. For example, a college graduate might receive content from your financial institution about student loan repayment options. At the same time, a seasoned investor might receive information from your institution about retirement planning.

Consider these examples for personalizing your target customer demographic experience:

  1. Tailor Investment Recommendations: Imagine receiving investment advice that aligns with your risk tolerance and financial aspirations. A leading wealth management firm could achieve this by employing advanced algorithms to generate personalized investment strategies. The result could leave your consumer feeling understood — leading to increased trust and loyalty.
  2. Customize Credit Offerings: Credit card companies have harnessed the power of personalization by offering tailored credit limits and rewards based on spending habits. By analyzing transaction data, companies can ensure consumers are receiving credit offerings that match their financial behavior, resulting in higher acceptance rates and more engaged customers.
  3. Simplify the Mortgage Journey: The process of acquiring a mortgage can be daunting. However, a forward-thinking mortgage provider can add personalization to guide applicants through the journey. Through interactive tools, personalized checklists and targeted content, you can streamline the experience and reduce drop-offs.
  4. Financial Wellness Coaching: Personalization can extend beyond product offerings. A progressive bank can integrate financial coaching into its services. Customers can receive actionable insights tailored to their financial goals through personalized content and one-on-one discussions. This improves financial literacy and fosters a more robust client and institution relationship.

Challenges, Considerations and Building Trust

While it’s clear that personalization in the financial industry has benefits, it doesn’t come without some challenges. Between privacy concerns and economic uncertainty — financial institutions must assure consumers that their data is secure and that there are solutions to help them navigate challenging times.

The key to successful personalization lies in transparency and consent. Customers must be informed about the data your institution collects and how it will be used. Offering opt-in mechanisms empowers customers to control the extent of personalization they receive. Institutions prioritizing transparency will continue building trust and credibility with their customers.

The Future of Personalization

As technology advances, the future of personalization in financial advertising holds promise. Artificial Intelligence (AI) and machine learning are set to revolutionize personalization. These technologies can process vast amounts of data in real-time, enabling financial institutions to provide instant, hyper-personalized recommendations and solutions.

Personalization is also expanding beyond digital channels. Physical branches can harness location-based data to offer relevant services when customers visit. Imagine stepping into a bank branch and the staff already know your financial needs based on your digital interactions.

In the financial industry, personalization is more than a marketing strategy; it’s a transformational force that propels institutions toward a customer-centric approach. By leveraging data insights, financial institutions can anticipate customer needs, provide timely solutions, and foster long-term relationships. This digital connection and personalization era will bridge the gap between financial institutions and their customers on an individual level.

Unlock the Power of Personalization in Your Financial Institution

If your financial institution is ready to seize the future of banking, now is the time to find a partner with the tools and expertise in advertising who understands the intricacies of the financial industry. In a world where customers seek bespoke financial solutions, your institution’s success relies on personalized marketing strategies. Working together can unlock new customer engagement, loyalty and growth levels.

Adam’s career centers on creating, building, operating and leading highly successful media organizations. He helped launch Techint Labs to create a conversion-focused media agency that helps brands utilize emerging advertising technology to earn attributable results. Before Techint Labs, he led digital strategy for national clients at Digital First Media, the United States’ second-largest newspaper publisher.

Picture of By the Colorado Bankers Association

By the Colorado Bankers Association