This Sunday marks the first anniversary of the Open Banking initiative. This ground-breaking reform changed previously rigid rules to make the financial services sector more competitive and focused on the customer.
Cloud-based digital banks have taken advantage of this initiative by offering better services to customers, as 8 out of 10 Millennials say they would switch banks for personalised service. Such fintech players and challenger banks now account for 20 per cent of the banking and payments market in Europe.
However, acquiring these new customers is not enough for digital banks to stay competitive, according to customer relationship marketing experts at the customer data platform Optimove. Challenger banks need to find new and personalised marketing strategies to keep brand-agnostic customers loyal – or else they will be made irrelevant by other agile providers with better product offerings.
Roni Cohen, Director of Data Science at Optimove, comments: “In the age of Open Banking, the best way for these agile technology driven banks to effectively implement personalisation is to make the most of the available customer data, which is now also available to their competitors.
“A customer-centric approach using advanced technologies can help create a long-term competitive advantage. This can be done by looking at customer data to find out what value means to each person, and communicating with customers in an emotionally intelligent way to create value for each and every customer. By using AI, banks’ marketers can gain actionable insights and build effective campaigns and strategies that will target customers at the right time, the right channel and with the right offer for a fully personalised experience.”
Roni concludes: “As consumers see an increasingly personalised experience, challenger banks will be able to distinguish their brands with promotions and rewards tailored to each individual – just like retailers do.”