Personalisation as a strategy for reversing traditional banks’ market share erosion in primary financial relationships and how to get started

Abstract

From primary research conducted in 2022, customers said, ‘What personalisation?’ when asked if they received digital experiences or communications from their bank that seemed tailored to their unique account history. Although the concept of personalisation was described as early as 19891 and is effectively deployed in other industries (eg advertising, e-commerce, video streaming), customers report that their bank does not use customer knowledge to proactively anticipate their needs or wants. Enter FinTechs. Thanks to technology advancements, an entire subindustry within financial services has bloomed that provides banking services, including deposit accounts, lending and wealth management. For the first time, customers now have a choice outside traditional institutions for managing their money. This paper argues that effective deployment of personalisation is an experience that customers are looking for and that it can be deployed to help mitigate the market erosion of primary financial relationship (PFR) to FinTechs. The paper describes what we learned from customers and propose a framework that banks can use to deploy personalisation experiences that are minimally viable.