Despite the progress personalization has made in other sectors, financial institutions are falling short. The trouble is that personalization can’t be bought; it can only be built through data. And until recently, financial institutions — and consumers and small business owners, for that matter — had little reason to share data with them. If they’re to overcome their personalization problem, that has to change.
There are three main sources of data which financial institutions need to tap into in order to build and maximize truly personalized experiences:
- Consumers themselves – with regard to consumers, financial institutions are slowly starting to build trust; however, more work needs to be done in terms of greater transparency and demonstrating clear ties between data consumers share and the benefits they receive.
- Other financial institutions – financial institutions have traditionally been somewhat skeptical of data sharing; however, alternative lending platforms are showing how this need not be the case. Moreover, open banking is forcing financial institutions to rethink this outmoded idea.
- Businesses – partnering with businesses may seem risky; however, consumers come to trust specific businesses, and data from businesses is vital in creating personalized experiences that provide real value to consumers.
Financial data is sensitive, and opening sharing between entities that are used to competing with one another is not easy. But the path to one-to-one personalization can’t be paved with money. If financial institutions are to deliver on the promise of personalization, they need to collaborate with one another, businesses and consumers.