Personalization, a fundamental pillar for banks

Category: banking, study, loyalty

Personalization, a fundamental pillar for banks - Bank Report - The Cocktail

In today's digital age, where information is constantly flowing through interconnected networks, data privacy has become a central issue in everyday life. As the benefits of technology are harnessed to simplify tasks and improve efficiency, users are increasingly aware of the value of their personal data and pay more attention to how it is collected, stored and used.

In the specific case of the banking industry, data privacy presents a unique challenge and opportunity. This is reflected in our latest banking report highlighting the needs to address users' concerns about the privacy of their data and build personalization strategies.

In this sense, the report reveals a decrease in the willingness of Spaniards to provide information about their banking products and movements (which are obtained thanks to the PSD2 regulation), reducing from 49% in 2017 to the current 25%. Likewise, 3 out of 4 people declare themselves reluctant to share their banking data, even to other financial institutions.

Despite these figures, the perceived usefulness of PSD2 has grown since 2017, so there is an opportunity to reverse the trend. The possibility for all entities to have full access to offer tailored products opens a new avenue to improve conditions for users and detect new frauds.

On the other hand, the report points out that customers are more willing to share banking data when banks offer them personalized products, so that they can build a relationship of greater trust between them.

All this makes clear the need to promote strategies that restore customer trust in this digitalized and highly competitive environment.


Personalization as a pillar of banks' strategies

Customers' perception of the amount of personal information available to banks has increased by 29% in recent years.

They also say they are willing to share their data if they are offered a tangible benefit, either in the form of useful services or compensation. In this way, the value-added view becomes a key factor in overcoming the reluctance to share.

Personalized banking is not simply about adapting to customers' individual preferences, but also about anticipating their financial needs. Companies that can provide offers, recommendations and services tailored to each customer's unique situation are better positioned to build strong, long-term relationships in an industry where trust and satisfaction are paramount.

Banks that can provide customized products and services are better positioned to build strong, long-term relationships

Financial optimization that builds trust

In today's competitive financial environment, gaining consumer trust in privacy and data security is essential. While 47% show little concern when sharing data, the remaining 53% express concerns, highlighting the need to reinforce strategies to build and consolidate consumer trust.

At The Cocktail we suggest and help clients to:

  1. Effectively communicate the full privacy and security of customer data. Following Apple's successful example, banks should adopt proactive measures to safeguard confidential information and assure users that their data will not be shared or resold to third parties. This transparency helps reduce consumer skepticism and strengthens the perception of the financial institution as a trusted custodian of personal information. 
  2. Highlight the tangible benefits of sharing data with customers. Explaining how information sharing can strengthen cybersecurity and facilitate fraud detection becomes a persuasive argument. By clearly showing how data analytics can be an effective tool to protect users' accounts and transactions, clear value is created in sharing financial information. 
  3. Focus on the direct benefits to the customer, explaining that the use of their data will help improve their financial health, offer more favorable banking conditions and provide personalized savings opportunities. In this way, a more collaborative and beneficial relationship between the consumer and the financial institution is incentivized.

"This reluctance underscores the need to address privacy in a transparent manner and offer tangible benefits to gain customer trust," explains Marta Franch, Director of Financial Projects at The Cocktail

In conclusion, in a context where consumer trust stands as an invaluable asset, financial institutions must balance offering personalized services with safeguarding their customers' sensitive information. The path to trust involves transparent communication about the privacy and security measures in place, highlighting the tangible benefits of data sharing and focusing on financial optimization that builds trust. In this journey, personalization is not only presented as a strategic element, but as an ongoing commitment to anticipate and meet individual needs, thus building strong and lasting relationships in an increasingly digital and competitive financial environment.