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Personalizing the banking experience

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Personalizing the banking experience

by Ashley Sargent


Across every industry, consumers are demanding a more personalized experience from companies, and banks are no exception. As financial institutions seek to build stronger relationships with their customers and improve their overall customer experience, keeping up continues to be a challenge. Sixty-one percent of banking executives say expectations for customer experience are continuing to rise, and nearly half (45%) admit they are struggling to keep up. 

In a fragile economy and amid mistrust of banks, retention is a top priority. Seamless, digital experiences are essential for building strong, lasting relationships with customers. Banks can enhance customer experience by providing personalized services, tailored products, and messaging that meets unique customer needs and preferences. This builds trust and loyalty, which is crucial since 75% of banking customers consider their experience the most important factor when choosing a bank. 

Barriers to personalized banking experiences

Despite this, meeting the ever-increasing demands of customers remains a daunting task, and the financial sector is not immune to this challenge. Surprisingly, while
86% of companies consider personalization crucial to their business strategy, less than half have put it into practice. The banking industry faces several difficulties in achieving personalization, and many institutions have relied on their website for digital branding and product display, forcing customers to do most of work, creating a frustrating experience. Let’s explore what the top challenges are and identify solutions to overcome them.   

Organizational silos 

As banking organizations expand, they often adopt more traditional structures and processes that can create barriers between teams and business units. This creates organizational silos that particularly effect operations, tech, analytics, and UX teams’ ability to maintain a unified focus on the customer journey.  

To prevent silos and improve personalization efforts, banks should adopt a uniform KPI framework that focuses on the full customer journey, not just micro-journeys. All teams should understand personalization and their roles in it, with aligned goals and KPIs. For instance, team members should use data to identify actionable insights across all digital touchpoints. 

Outdated technology  

Legacy banking platforms struggle to meet customers' demand for real-time applications and services due to outdated software and programming, resulting in limitations. Although these platforms continue to support core banking services, they are failing to keep up with clients' needs for speed and advanced functionality. The move to upgrade software and tech platforms is often avoided because it is seen as too costly and risky, as even minor disruptions can have catastrophic effects.  

Fragmented data 

Perhaps the biggest challenge is the ability to organize data for personalized experiences. Achieving a single view of the customer is crucial for successful personalization, but can be challenging due to data unification, activation delays, and concerns about data quality. A lack of a unified technology across teams can hamper effective personalization efforts. In many businesses, different teams utilize various tech stacks, such as marketing automation, CRM, and analytics, leading to a lack of knowledge on how to utilize personalization technology.  

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Finding the opportunity  

Customers demand consistent interactions across all channels, making omnichannel capabilities a necessity for meeting their expectations. In today's competitive landscape, banks can set themselves apart by optimizing offer speed and effectiveness through the adoption of new technologies and processes. This enables them to leverage personalization to enhance customer relationships across various business lines and delivery channels. Banks can stay competitive by providing the personalized, omni-channel experiences in the following ways:  

Personalized Onboarding Journeys 

Personalized onboarding journeys are critical in building customer loyalty because they allow banks to create a positive and lasting impression on their customers from the very beginning. It sets the tone for the rest of the customer's relationship with their bank. A well-crafted onboarding journey makes the customer feel like they are in good hands and that the bank is truly invested in their success. This sets the stage for a long-term relationship. 

Additionally, it can help customers feel more confident in the bank, and themselves. When someone is given the tools and information they need to succeed, they are more likely to feel confident in their ability to use a product or service effectively. 

To achieve initial customer retention, banks must focus on a key milestone - the moment customers experience the actual benefit of the product or service. This transition from product application/completion to product usage is critical for most banks. To ensure customer satisfaction and prevent churn, banks need to simplify every step of the process. For instance, sending follow-up messages to educate customers on next steps after applying for a loan is an effective practice. By keeping customers engaged in a streamlined onboarding journey, banks can foster trust and loyalty. Prioritizing customer onboarding is a strategic approach for banks to establish a foundation for lasting customer satisfaction and retention. 

Life-stage customer journeys  

Customer lifecycle journeys are essential for banks as they provide a framework to understand and optimize the different stages of a customer's relationship with the bank. These stages include awareness, acquisition, onboarding, engagement, retention, and advocacy. By identifying areas where customers may drop off or disengage, banks can implement strategies to improve the overall customer experience, increase satisfaction, and build deeper relationships with customers.  

Personalization plays a key role in tailoring communication and offers within each stage, creating the 1:1 relationship that customers demand. To design personalized customer journeys, banks can develop customer personas based on demographic and behavioral data. These personas help banks understand their customers better and enable them to deliver relevant and personalized experiences at each stage of the customer lifecycle. For example, a customer nearing retirement age may receive cross-selling offers on retirement and investment options, guiding them towards the next phase of their relationship with the bank.  

Overall, prioritizing personalized, omni-channel experiences, is essential for banks to establish lasting customer satisfaction, retention, and success in today's competitive banking landscape. Want to learn more about creating a personalized banking experiences? Our team of experts is here to help. 
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