Defining a personalization strategy? Consumer research finds 4 unique profiles to study

When you listen to discussions about digital banking experiences, the word personalization inevitably comes up. And it should. Personalization has the potential to help traditional banks keep and win customers. The term is wielded as a transformative concept. What does it really mean? When you unpack the term in context, it’s often used to imply relevant offers and customer-centric digital experiences. Sounds nice, but that’s not very specific. At Amdocs, we conducted in-depth research into what customers want (and don’t want) from personalization. Our findings below might surprise you.

We interviewed American consumers about their financial and other digital experiences. The interviews delved into their perspectives on personalization. All respondents liked the idea of personalized digital experiences. But they held differing views of what personalization meant. We identified four types of personalization that appeal to different consumers.

While some in the industry see personalization primarily as an opportunity to increase revenue by delivering the right offer at the right time, we take a broader view. Yes, personalized offers deliver strong returns. But personalization that encompasses customer-centric product and pricing innovation presents an outsized retention opportunity. Traditional banks that serve each of the four personalization types have the potential to retain more customers as competitors seek to lure account holders away.

Fight customer flight with personalization

An increasing number of consumers are shifting from traditional banks as their primary financial relationship. It’s a trend that’s gained steam in recent years. According to 2021 research from Ernst & Young, 30% of US consumers named a FinTech as their primary financial relationship—that number was a mere 6% in 2019. Those are sobering numbers for traditional banks. This is reinforced by Amdocs’ recently published Battle of the Banks Report, which found that 81% of US consumers felt digital-only banks have better benefits than traditional banks

Our research showed that many consumers associate FinTechs with personalization. That’s true even though people have differing views of what personalization means. While they may keep an account at traditional banks, those same consumers consider FinTechs first when seeking new financial products and services. During the Amdocs research, people told us they pay attention to the ways that traditional banks weave personalization into digital experiences. And they appreciate it when trusted banking brands meet and exceed their expectations for personalization.

What do customers want from personalization?

We asked respondents to describe what the term personalization meant to them. Interestingly, the overwhelming majority of people started by describing a smooth digital experience—without any element of personalization. Banks should take note: consumers see banking ease as inseparable from personalization.

As our conversations developed, respondents dove into aspects of the banking experience they’d like to see personalized. Based on the interviews, we developed four customer types or personas that banks should accommodate when deploying personalization. Consider developing capabilities that satisfy each of these types:

• Value seeker: These consumers see personalization as a reward for loyalty. They want targeted offers and discounts that feel designed just for them. For value seekers, the perfect offer is a discount or loyalty reward that shows you know them. These consumers would appreciate a discounted product bundle that includes banking services they already use and a new service. They also react positively to offers from a partner brand they already use.
• Shopper: Of all the types, the shopper maps most closely to what many in the financial services industry describe as personalization. Shoppers want the right offer at the right time. When they get it, they take action. Many will even reach out to friends to tell them about enticing offers. Shoppers love to discover new products and services through personalized offers.
• Method man: These respondents bring a cynical view of banks to their ideas about personalization. They dislike most offers of products—especially those where the personalization seems linked to income level. What do they like? Protection and information. They like the idea of fraud alerts based on prior spending habits. Information appeals to them, too. For example, they want to receive content, like articles or videos, relevant to their financial circumstances.
• Commander-in-chief: The commander-in-chief wants control and time savings from personalization. Give chiefs a window into their financial affairs—and an easy way to drill into specifics. Targeted offers? Not interested. Financial tools they can personalize for themselves? Yes, please.

Start driving retention with personalization

At Amdocs, we work with banks to help them turn long-term relationships with customers into a competitive advantage. Beyond personalization, that can take the form of digital experience modernization, product and pricing innovation or automating your infrastructure at scale. Talk to our team today about your goals. We’ll share our perspective, research, and expertise.