Digital Banks Struggle to Create Highly Personalized Experiences

By Rae Steinbach on September 7, 2018

digital banks

Digital technology has allowed businesses across numerous industries to offer more personalized service than ever before. In fact, consumers have begun to expect this kind of service. That’s why both traditional financial institutions and digital banks have made efforts to leverage emerging technology in this capacity.

However, there’s reason to believe their efforts haven’t yielded ideal results just yet. When asked to assess the degree to which they offer personalized service to customers, a mere 6% of banking firms ranked their efforts as “advanced.” Most firms admitted they were just beginning to explore the advantages of digital banking and introduce personalization technology into the overall banking digital experience.

This has had a direct impact on the way consumers feel about their financial institutions. Surveys indicate consumers are beginning to lose faith in banks as they fail to implement personalization tech.

Benefits of Providing a Banking Digital Experience

The theoretical advantages of digital banking are clear to many: Banks should be able to leverage the data customers provide in order to tailor services to each individual. Thanks to innovations like AI digital banking, firms can easily monitor customer behavior and offer services that meet each particular customer’s needs.

D!gitalist Magazine offers an example of this digital banking experience: By monitoring debit card transactions, an AI program may notice that a customer is spending money on items that indicate they are expecting a newborn soon. This could prompt the bank to automatically offer that customer a college savings account.

The rise of fintech services has also fueled a desire among consumers for greater personalization. Thanks to banking and digital transformation innovations like augmented reality, customers can perform many banking tasks more efficiently than ever before.

Everything from checking a balance to transferring funds has become much more convenient. Because consumers already see how technology can transform the banking digital experience in these basic ways, they naturally expect firms to also use AI digital banking technology as a means of delivering personalized service.

How to Overcome the Obstacles of Banking and Digital Transformation

In fact, banking firms report being concerned about the rise of fintech solutions. Tradition firms have spent decades relying on entrenched methods of serving customers. They simply have not allocated the time or resources to applying new AI digital banking technologies effectively.

The solution may involve partnering with tech firms that can help financial institutions adjust to consumer expectations. Banks already have experience navigating the regulatory issues that naturally impact financial services.

What they lack is the infrastructure needed to deliver personalized service via new banking and digital transformation technologies. With help from outside AI developer partners, they can continue to stay relevant while serving their customers more effectively than ever thanks to the advantages of digital banking.