Hyper-Personalization: The Future of Financial Services

In the rapidly evolving landscape of financial services, customer expectations are rising, and institutions are scrambling to keep up. The key to success in this competitive environment is hyper-personalization, which leverages real-time data and AI to anticipate customer needs and deliver relevant interactions. According to Richard Winston, Global Industry Lead, Financial Services at Slalom, "The most expensive customer is one that walks in the door, signs up with you, and then walks out the door six months later because they didn’t get the service they were expecting." Hyper-personalization can help financial services firms improve trust, retention, and business growth by providing tailored experiences across digital and physical channels.

Forrester's State of Customer Obsession report for 2024 found that only 3% of organizations across industries are meeting the bar of "putting the customer at the center of leadership, strategy, and operations." However, leaders at customer-obsessed organizations reported 41% faster revenue growth, 49% faster profit growth, and 51% better customer retention. This demonstrates the potential impact of hyper-personalization on customer retention and business growth in financial services.

One banking customer of Slalom experienced a 7% increase in lifetime customer value, equivalent to $130.7M, after implementing integrated hyper-personalization solutions like Lightflow from Slalom and AWS. This shows that hyper-personalization can drive significant business growth and customer retention in the financial services industry.

However, data is the sticking point for many organizations. Breaking down business silos, modernizing technology platforms, and ensuring data accessibility with necessary safeguards can be challenging. To overcome these obstacles, financial services firms should focus on bringing data from legacy and core systems into a unified "middle layer," where it can be easily leveraged for hyper-personalization. This approach allows for the implementation of integrated solutions that can anticipate customer needs and deliver relevant interactions across all touchpoints, without repetitive steps.

In conclusion, hyper-personalization is the gold standard of customer experience in financial services. By leveraging real-time data and AI, financial services firms can anticipate customer needs and deliver relevant interactions, improving trust, retention, and business growth. To achieve this, firms must address the challenges of data accessibility and integration, and focus on bringing data from legacy and core systems into a unified "middle layer" for easy leveraging.