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YTS: Open Banking Can Help Retailers Improve Personalisation, Customer Trust, and Loyalty

Personalisation is key to persuading customers to shop online, but previously payments have played a minor role. Today open banking can change that, offering rich data opportunities to improve the customer experience.

Leon Muis, Chief Business Officer, Yolt
Leon Muis, Chief Business Officer, Yolt

Helping to lead the change is Leon Muis, Chief Business Officer at Yolt Technology Services (YTS). YTS is a prominent open banking provider in Europe, as well as a driving force behind the launch of open banking in the UK, having worked closely with the OBIE and FCA to bring open banking to the UK market.

Leon is an open banking expert and built and leads the Yolt Technology Services proposition. Based in the Netherlands, he is a regular commentator across the Open Banking and wider technology space, including the role of APIs and open banking payments in changing the current business landscape and evolving the user experience, the development of Open Banking technology in a variety of different sectors, and the move towards Open Finance.

Without a doubt, the pandemic has accelerated digital adoption and changed the way consumers shop online. But that doesn’t mean their expectations around the customer experience are any less. In fact, with this shift in adoption has also facilitated a shift in expectation. Customers expect the same personal experience online that they are traditionally used to in-store and are growing increasingly intolerant of anything that falls short of that. But they can also be wary about sharing the data that allows that level of personalisation, with worries over data security and privacy.

In part, this change in expectation is because they have been influenced by a handful of online retailers, who have found a way to manage this process seamlessly. Successful online retailers such as Amazon have long used sophisticated data analytics to shape their personalisation offerings and improve their customer experience – and customers have noticed. As a result, they now expect all retailers to be able to offer similar experiences online, regardless of their size or technical capabilities.  

Customer data is the key to identifying the buying patterns and behaviours that allow retailers to offer more personalised products and services, and so improve experiences. And it’s here where open banking can provide enormous value. Using Account Information Services (AIS) retailers can, with the consent of the customer, access detailed information about their shoppers – such as their spending habits – which can give them real-time and unparalleled insight into their customers’ behaviours and needs. They can do this with the reassurance that it’s been obtained safely and securely since it requires the customer’s consent to access. 

Using data enrichment, another open banking service that uses machine learning to explore trends, retailers can transform customer data into actionable insights that can help pave customer journeys. From this, they can develop personalisation strategies that allow them to suggest products that are more relevant to the consumer concerned, creating a true competitive advantage over their rivals. 

Personalisation means that the buying experience becomes quicker, easier, and more relevant because the retailer is anticipating customer needs. That not only prompts them to buy but increases customer loyalty since the experience is akin to having products suggested to them by a knowledgeable associate in-store. 

Of course, there are other benefits to open banking beyond just the usefulness of the data that it enables retailers to collect. Open banking also reduces friction, for both retailer and consumer, and allows customers to pay securely by enabling immediate payment from their bank account, rather than transferring sensitive card details to the retailer. It gives the customer greater control since, ultimately, it’s them consenting for the payment to be initiated. 

That said, retailers need to use their data in the right way. Product and service suggestions should be specific to the customer and their needs and buying patterns, and not overstep boundaries – one of the quickest ways to turn customers off sharing data. Data exists as a currency and as such the customer needs to get something back in return for its exchange. This means that retailers should deliver genuine value through relevance and through complementary products. It’s here that extra insight into spending patterns can really prove to be of value.

Although they must be careful about not overstepping the mark, it’s not solely about serving up what the customer is looking for. Do that and retailers risk providing a homogenised, over-personalised experience in which customers never sway from their usual buying patterns. Instore retailers don’t boost sales by simply selling the same products over and over. They do it through upselling, cross-selling, and prompting their customers to try something new. True personalisation must do the same – it should suggest and tempt customers into new product areas, subtly. 

Traditionally knowledge about the customer has been built through a patchwork collation of different elements of information about the customer. It’s a picture that’s not always complete and often not accurate. Open banking allows for a clearer, truer view about the customer and about their purchases. 

Using AIS and data enrichment, retailers are able to process the basic transactional information of their customers to create personal data models that will allow them to explore customer trends and deliver the personalisation their customers are after, tailoring appropriate products and services to those consumers at the right time as a result. Businesses are able to use this data to re-train a machine learning model, providing much more accurate predictions over time than other methods which use plain automated approaches to label certain categories. 

Making the most of the data available to them means that retailers can better deliver the personalised level of service and the customer experience that prompts customers to buy, not just once – but again and again.


  • Tyler is a fintech journalist with specific interests in online banking and emerging AI technologies. He began his career writing with a plethora of national and international publications.

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