Banks Innovating CX: Insights and Next Best Action
The ability to connect with customers has always been the key to successful product recommendations. However, traditional banks have relied on financial advisors to advocate for customers. But now banks have started to abandon guesswork and started anticipating customer behavior.
Accurate recommendations are crucial for customer retention and loyalty, and banks are now adopting technology to provide superior product recommendations to customers and remain competitive.
Personalized Financial Products
Banks face pressure to adopt technology-based wealth managers due to competition from non-financial organizations and neo-banks. Personalized financial products are essential for better financial goals and investments, and AI can assist with this.
Banks have struggled to improve customer experiences due to tedious paperwork during onboarding, cybersecurity concerns, and back-office processes. AI-powered recommendation engines can offer customer-enriched experiences and change this.
Banks are targeting affluent clients, and customer analytics and technology are the top strategies to attract this segment. Building a recommendation engine starts with collecting data from various customer touchpoints, channels, and browsing activities. This data undergoes a cleansing process, and customers are segmented into taste groups based on their behavior. Machine learning models use cleansed data to learn and provide accurate recommendations, even if customer behavior takes a different direction.
Recommendation Engines for Banks
Once recommendations and insights are generated, banks can choose the most suitable action from the available options, enhancing customer experiences across platforms and channels. Each customer experience helps banks allocate appropriate budgets for different customer clusters, depending on the monetary value customers bring to the bank.
This way, banks can determine budgets for each customer class and simultaneously mitigate the risk of money laundering using an effective product recommendation formula.
Next Best Action Tools for Banks
The Next Best Action (NBA) tool has been designed for the banking industry to improve customer service by analyzing transactional events and customer intelligence data. Financial institutions are now able to collect and activate consumer information, which has become a competitive advantage as it allows for creating personalized experiences and services based on the customers’ needs.
Personalized communication is essential for banks to deliver richer experiences and retain their relevance, as generic offerings no longer attract attention. Customers seek products that offer the most valuable features in terms of specific needs and preferences.
Therefore, banks need to personalize their communication to clearly convey how their products meet customers’ needs and satisfy their objectives.
The Way Forward
To revitalize their business, banks must embrace new strategies. Challenger banks in the UK and other global regions pose significant challenges, and non-financial entrants compete for customers who were previously loyal to banks. Recommendation Engines and NBA tools, such as Pryzm by LUMIQ, reduce the costs associated with unnecessary messaging, improving the bank’s profitability and, more importantly, the experience of customers who will only receive relevant information.
Recommendation Engines and NBA tools reduce the costs associated with unnecessary messaging, improving the bank’s profitability and, more importantly, the experience of customers who will only receive information that is relevant to them.
With AI, ML, and a robust data strategy, banks can transform the incumbent perception. And Banks have started making the move towards these AI-powered solutions.
Over the decade, LUMIQ has helped over 40 leading financial services institutions transform their customer experience. If you are looking to collect, analyze, and use customer insights to create a personalized, relevant, and engaging customer experience, connect with one of our financial services data scientists today. We will be happy to help you.