The Art and Science of Data-Driven Personalization

Personalization involves the communication of relevant, tailored messages to banking consumers based on their individual preferences, needs, and behaviors at a particular point in time. In today’s new, hybrid world, financial institutions (FIs) seeking to strengthen accountholder relationships will find that doing so means you need to effectively utilize a deliberate blend of personal and digital touchpoints to deliver these communications.

This is where data-driven personalization shines.  It is a strong enabler for community banks and credit unions to engage accountholders while enhancing their satisfaction, loyalty, retention, and profitability. Personalization can be a powerful tool for them to leverage. To be most effective in engaging your audience requires a delicate balance of art and science, combining human insights and creativity with data and technology.

Not too long ago, cross-selling products and services was based on personal relationships and largely a manual process that did not scale well.  A banker might identify one of his consumers to be looking for a new home and be ready to offer a mortgage product.  This relies on their personal knowledge of such instances, again, something that is hard to scale and resource.

Another tactic is to employ the blanket approach where a financial institution might blast out a direct mail or email to every accountholder pushing HELOCs (Home Equity Lines of Credit).  This tactic, with minimal personalization or thought given to individuals that comprise the audience, including those that don’t even own homes, can result in poor conversion rates in addition to vividly demonstrating how little the financial institution actually cares about its individual consumers.

The art of personalization: understanding accountholders

Personalization begins with understanding accountholders as individuals, rather than merely as segments or averages. Knowing who they are, what they want and what they need financially must culminate in actions to help meet those needs. Empathy of their pain points, aspirations, and emotions must translate into meaningful communications.

With the digitization of the financial services landscape, personal touchpoints need to be supplemented and complemented with personalized digital touchpoints. These can indeed scale very well and ultimately be well automated while achieving the personal and human touch. Accomplishing this objective requires the appropriate use of accountholder information (which FIs already have) to personalize these digital touchpoints. This can range from simple to  sophisticated, depending on the size and scale of the FI.

Some of the more sophisticated accountholder data can cut across demographic, psychographic, behavioral, and feedback data while others may opt for using some subsets of these. In addition to this data, FIs can apply human insight and creativity to interpret certain data elements to generate meaningful insights along with visual and textual cues that can be used to most effectively communicate with their audience.

Another beneficial aspect for FIs is to generate and use buyer personas that represent the institution's ideal customer based on their goals, challenges, motivations, and preferences. Some organizations find it useful to map out typical accountholder journeys across different stages and touchpoints to identify and capitalize on opportunities to impact customer experience.

The science of personalization: effectively utilizing data and AI

Once FIs have built a solid understanding of their accountholders, the next step is to leverage data and AI to deliver messages that are relevant and tailored delivered through their digital channels, at the appropriate time. Technology is essential for automating and optimizing personalization efforts across the entirety of accountholder lifecycles.

Today, there are a variety of tools and techniques at the disposal of FIs to ensure the following:

·         Data Integration: Eliminating data silos, consolidating data from different sources and systems into a single platform.

·         Data Quality: Ensuring data accuracy, completeness, timeliness, and validity.

·         Data Analytics: Applying descriptive, diagnostic, predictive, and prescriptive analytics to generate insights from data.

·         Data Visualization: presenting data in graphical or interactive formats to facilitate understanding and decision-making.

·         AI: Using machine learning (ML) models to enable intelligent functions such as identifying highest propensity buyers for certain products.

Although data and AI are invaluable assets, they also pose challenges and risks that must be responsibly addressed. Some of these factors include data privacy, security, ethics, and regulation. When working with data for personalization, it is important to be responsible, transparent, and ethical. This means having an intentional focus on accuracy and reliability, relevance, privacy, and security.  Ultimately, financial institutions will benefit from stronger relationships with their consumers who become more engaged as they find value in the personalized communications they receive.  

Leveraging technology to help achieve personalization goals

Now more than ever, marketing automation technology platforms are available within the Financial Services industry to assist FIs in uncovering opportunities and building robust personalized communications systems. The goal should be to have a well-rounded multi-channel platform that delivers exceptional personalized experiences for banking consumers while being easy to implement and easy to measure outcomes. Evaluating these platforms should include factors such as the use of disparate data sources, multiple ways to target communications, versatile delivery of messaging and offers, leveraging the valuable digital real estate of online and mobile banking platforms and a high level of automation for accurately directing and personalizing communications.

Today’s landscape is hypercompetitive, forcing financial institutions of all sizes to find ways of staying a step ahead of their competition by demonstrating how well they know their consumers through personalized experiences. FI leadership that fails to recognize this or the strategic growth potential of modern marketing technology will find themselves bogged down in a traditional marketing quagmire that neither knows data nor personalization, thereby stagnating growth and accountholder relationships.


About Author:
Preetha Pulusani is the CEO of DeepTarget, a FinTech company powering the digital communication revolution for credit unions and banks with
Growth as a Service™ (GRaaS™) helping financial institutions grow by delivering amazing experiences that result in up to 10x more sales and lasting relationships with their digital users.  For more information, visit

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