The path to real personalization in banking: segmentation

Everyone banks a little differently. With greater segmentation, you can meet them where they are.
May 19, 2022
Molly Riesenberger
Product Marketing Manager
Laura Caseley
Content Writer

In a world of virtual connections, having a personalized experience means that you, and your customers, are more than just numbers or items on a list. But while it’s great to welcome someone with a personalized greeting when they log in, or to send targeted marketing emails featuring products they might want, there’s far more to personalization when it comes to the whole of the banking experience. 

True personalization means taking the time to really understand how people are banking with your institution, what they already have, and what they need, then giving them the banking experience that reflects exactly who they are. 

By mindfully implementing segmentation, you create those personalized experiences for customers and members – meeting their specific needs while creating a pleasant and personal banking relationship.

Deeply embracing personalization lets you meet the specific needs of your customers

Achieving a deep level of personalization requires a true understanding of each customer’s financial situation. Everything about a customer must be taken into account, including the length of their membership with the financial institution, the amount of money they hold in their accounts, how much money they tend to wire or transfer, how frequently they withdraw from an ATM, and their everyday banking habits. The ability to conduct financial transactions with ease, daily or even multiple times a day, is far more important to the core of your relationship with a customer than a personalized email. 

More and more often, forward-thinking banks and credit unions are looking outside the banking industry for inspiration. Spotify, for instance, can give inspiration for developing a personalization strategy that evolves with customers – setting them up for scalable growth fueled by a loyal user base. Targeted offers like their annual Wrapped campaign and suggested music selections offer a more robust degree of personalization tailored to their users over time.

This removes any possible friction from a listener’s experience. The product not only works correctly, but also lets them know Spotify can learn their preferences through the songs and podcasts they’re listening to. And as their preferences change, Spotify’s curated suggestions change with them. By applying the best practices of non-banking companies, financial institutions are able to get people what they want, in the ways they want. 

This approach to personalization helps ensure that people’s needs will be met on a daily basis, but also makes people feel like their financial institution really understands them. It helps build a human connection and ultimately develops trust.

A user experience that deepens the banking relationship

How can these principles of personalization be applied to a better user experience in digital banking? Customer segmentation is a great way to get to know your users on a deeper level. It allows financial institutions to group their user base into categories based on similar characteristics and behaviors. 

People with differing habits, lifestyles, and needs will need to interact with their financial institution differently, and require different limits and accessibilities. 

To give an example, let’s say you are looking at two different users: User A and User B. Both may appear similar in terms of account activity and product engagement at quick glance. But by digging deeper into their banking behavior, you as the provider may notice that User B deposits substantially larger amounts – keeping an average balance of $50,000 – and regularly receives more transfers over $10,000.

If they’ve already established some banking history with your institution and pose a low fraud risk, you might choose to adjust their daily limits to those of a user with more account history –  giving them the ability to move money they way they need. With lower limits, they could easily get frustrated, and decide your institution won’t work for them in the long-run. 

Segmentation empowers financial institutions to look at their customer’s financial habits on a deep level, anticipate their needs and expectations, and deliver custom experiences to better serve their members. Better still, strategic implementation can give peace of mind;  you’ll be able to set your users’ limits and protect your institution. It’s a win-win for both you and your customers.

Making sure your segmentation is mindful

Marketing emails and targeted product offers and ads might resonate well in the consumer and retail spaces, but in the financial world, they’re more like decorative elements of personalization than foundational ones. 

That’s because finances are so fundamental to people’s lives and the decisions they make. People need solutions that break the surface to dig deep into their financial habits and set them up for financial wellness. A personalized email might feel nice for a customer at the moment, but a bank account that functions the way they need will solidify your institution as one they can rely on for their entirety of their financial lives. 

Segmentation, when applied thoughtfully, allows you to reach your customers where they are, provide them with the abilities they need in their day-to-day lives, all while keeping both their accounts and your institution safe, all in one seamless package. Non-banking companies already know how to harness customer preferences to create a unique experience for each of them, and there’s no reason a financial institution can’t do the same. And when they feel all their needs are being met, customers will keep coming back for even more services.  

Don’t be afraid to dig deep, make some changes, and ultimately delight your customers by proving you really know them. 

Narmi Inc.
3 East 28th St. Floor 12
New York, NY 10016

The path to real personalization in banking: segmentation