Innovative banks and credit unions are taking these two steps to give the personal touch a digital boost, Alkami survey finds

The rapid adoption of new technologies and processes in the financial services industry is driving five distinct digital banking trends, according to a recent Alkami survey of executives at 152 banks and credit unions. Two of these trends support a more personalized banking experience for account holders, which better meets their day-to-day needs and strengthens the relationship with their primary financial institution.

Hyper personalization: The new frontier for cutting-edge FIs

One in four surveyed banks and credit unions are seeking a competitive digital banking edge via hyper personalization. These early adopters stand to reap significant rewards in terms of both recruiting and retaining users. The bet looks even better as consumers seek out more personalized recommendations and offerings in their banking relationships to match what they now commonly experience when shopping for consumer goods and services online.

After all, if Amazon knows consumers well enough to make useful product purchasing recommendations, and Spotify and Netflix help guide their media consumption, why shouldn’t they get useful, personalized advice from their financial institution?

“When you think about how digital banking looks today and how it will look in the future, I think a lot will revolve around personalized experiences,” said Jeff Chen, vice president of product management at Alkami.

3 keys to getting real-time digital banking hyper personalization right

1. Leverage the contextual behavior of customers and members to make proactive product and service recommendations. If your system sees account activity that suggests an account holder may be home shopping, serve a pop-up asking if they are exploring financing options.
2. Make sure those recommendations are immediately actionable. If the account holder answers yes to the home financing question, direct them to an online tool where they can see current rate comparisons.
3. A little engagement goes a long way. Don’t inundate account holders with marketing pitches. They don’t want to feel like someone’s watching over their shoulder every time they check their account balance. Pick your opportunities to increase client connection and, ultimately, revenue.

Hyper-personalized banking can serve up targeted information and tips designed to help customers and members manage their money, contain their costs, and invest and save in a way that fosters a sustainable financial future.

Mine your mature data to enhance existing banking relationships and enter new markets

Where analyzing and responding to the real-time digital banking actions of users drives hyper personalization, leveraging your mature data—the information you gather about account holder activities over time—can also improve the banking experience and even help identify new market opportunities.

Most banks and credit unions now employ some analysis of mature data to optimize their performance or tap new markets. Respondents to the Alkami survey say they use that data to deliver a better member and customer experience (86%), guide decision-making (72%), and reduce development time and costs (23%).

When it comes to this kind of longitudinal data, some of which stretches back decades, traditional financial institutions hold a big advantage over newer market entrants such as fintech players. Banks and credit unions “have mature data. It can inform the understanding of what the member or customer is trying to do, what their goals are, and how they can be in service to those goals,” said Allison Cerra, chief marketing officer at Alkami.

While financial institutions traditionally have limited their use of this data to diagnosing or describing account holder behavior, many FIs are now mining it for predictive and prescriptive ends. Banks and credit unions that unlock behavior patterns embedded in this data can get a clearer picture of future needs they can then meet with timely solutions.

Taking such steps now also prepares financial institutions to take advantage of emerging artificial intelligence applications that can create operational efficiencies and increase the sophistication of personalization efforts.

Cerra likens AI-enabled services to financial advisers who in years past were only available to the wealthy. “We are now at a place where technology has democratized financial advice and counsel. AI feeds the ability for those who have typically been marginalized or underrepresented to understand how financially fit they are and engage in their own economic futures,” she said.

Which trends will you take advantage of first?

This post highlights two of the five digital banking trends identified in the recent Alkami survey of executives at 152 banks and credit unions. In an earlier post, we explored two additional trends from the survey. All five trends are explored in-depth and with full context in the 2022 Alkami report Trends Driving the Digital Banking Landscape: How Does Your Digital Transformation Journey Stack Up?

Despite the opportunities that lie ahead, banks and credit unions have further progress to make in their digital transformation. To capitalize on these industry trends, financial institutions need digital banking solutions that enable them to leverage analytics, support third-party integrations, and enhance the account holder experience.

For more insights on how banks and credit unions are adapting to the evolving digital landscape, download the full report today.