Personalized Banking for Up- and Cross-Selling

Back in 2001, research by Bain & Company identified that a 5% increase in financial or banking customer retention can lead to a profit increase of more than 25%. The financial services landscape has shifted significantly since then — but even with new tools for client acquisition, it’s still more profitable to invest in existing customers.

Existing customers tend to buy more from a company over time. They may even pay extra to continue working with you, especially if the alternative involves switching to a less reliable, less familiar competitor. They’ll also refer others to your company if this continued relationship remains strong.

One of the most effective ways to leverage existing customer relationships is, therefore, to capitalize on up- and cross-selling opportunities. Done properly, these aren’t aggressive strategies; rather, they extend financial services and address a wider range of customer needs.

The key to identifying and taking advantage of these opportunities is personalization. Here’s a look at how personalized banking through a digital experience platform makes it possible for financial institutions to up- and cross-sell effectively.

What Is Personalized Banking?

Put simply, personalized banking is the modern customer experience with a bank, credit union, or other financial institution. This approach utilizes digital banking solutions, customer data, and key metrics to deliver personalized service. 

Personalized banking becomes ever more important as customer expectations rise. In fact, 72% of survey respondents said personalization was a “highly important” part of the financial services customer experience.

Here’s what personalized service can look like:

Business-to-Business (B2B)

In a B2B setting, personalized banking should turn financial institutions into strategic partners. For example, a B2B account should have separate interfaces for different users, each providing the information and tasks relevant to that user’s role. Similarly, commercial banks may serve customers from a variety of industries — including manufacturing, construction, health care, and more — who all have different financial needs. This creates a customer experience that can be tailored to fit individual profiles, permissions settings, accounts, and more. The result is a bank that’s more than just a bank, providing support for the customer’s entire company.

Business-to-Consumer (B2C)

Personalization for B2C banking customers can take many forms. Consumers may expect to see:

• Highly personalized product and service recommendations.
• Customized rates based on their financial history.
• Offers that help them take control of their personal finances.
• Rewards and incentives for using their credit cards.

How Personalization Improves the Financial Customer Experience

The biggest benefit of personalized banking is that it improves the customer experience while increasing profitability. When a financial institution uses customer data to identify the best services to present to an existing customer, value is created in multiple ways:

• Relevancy: The bank or credit union doesn’t have to rely on guesswork or risk offering irrelevant services; instead, they know exactly what the customer needs and how to provide it.
• Simplicity: Personalized interactions create value without being labor-intensive. Customers don’t have to spend time searching for what they need or making service calls; this, in turn, frees up representatives to focus on more business-critical tasks.
• Satisfaction: The customer, whether B2B or B2C, sees their bank or credit union taking an active interest in their needs. The result is increased satisfaction without a significant demand on the financial institution’s time or resources.

Simply put, personalization makes customers feel happier with their bank — and this both creates and illuminates opportunities for up- and cross-selling.

How to Boost Up- and Cross-Selling with Personalized Banking

Personalizing the existing customer experience is one thing; using that personalization to leverage up- and cross-selling opportunities is quite another.

Say a B2B customer logs into their financial account with an urgent need. For example, to find relevant information or complete an important task. At this point, any up- or cross-selling attempt would be disruptive and may even seem inconsiderate; after all, the customer expects their bank to understand which tasks are business-critical and can’t be delayed. Even if the task wasn’t urgent, the customer might still feel frustrated if they were interrupted by an offer that seemed irrelevant. 

To avoid this, financial institutions must use customer data and behavior to identify the right message and the right time. While human agents are often trained to do this, it’s now necessary to scale and translate this process into the online world. 

Here are a few digital experience platform features that make this possible:

• Segmentation: Banking customers can be segmented into groups based on individual profile and company information, behavior patterns, and more. Financial institutions can then personalize their offerings to meet each segment’s unique needs.
• Rule creation: Digital banking rules help define which conditions need to be met before presenting an up- or cross-selling message. This reduces the risk of interrupting critical tasks or providing irrelevant offers.
• Integration: For financial institutions with third-party systems, it’s important to find a platform with integration capabilities. This allows the utilization of pre-computed segments or existing customer data.
• Experience management: Personalization of the banking customer experience requires careful management. A suitable platform should allow financial institutions to create page variations, promote specific content, and otherwise deliver unique experiences to each audience segment.
• Artificial intelligence (AI) and machine learning (ML): AI and ML can make recommendations based on what consumers are viewing and what customers with similar profiles have searched for or purchased in the past.

Remember, the goal of a digital experience platform isn’t just to enable up- and cross-selling opportunities. Instead, the goal is to improve the customer experience — which, in turn, creates these opportunities.

Personalized Banking Use Cases

As personalization becomes a critical part of digital banking and the financial customer experience, industry leaders learn more about what these solutions should look like and how to implement them. Here are two examples of how financial institutions used digital experience platforms to perfect personalization and take advantage of the resulting up- and cross-selling opportunities:

B2B: ParcIT 

Banking software company ParcIT needed a new B2B customer portal — one that could personalize their digital experience and enrich existing customer relationships. Their goal was to offer relevant services, ensure greater transparency, and increase sales among their customers. They turned to Liferay for support, and the results were impressive.

Now, ParcIT has a digital platform capable of notifying customers when new information or offerings are available for their current services. Better yet, all relevant data and offers exist in one place, so customers only have one touchpoint to interact with. This enables B2B customers to request changes or support and complete tasks according to their authorization and role in their company. The updated, personalized experience allows ParcIT to better understand their customers and make helpful, relevant up- or cross-selling offers.

B2C: KBC Bank Ireland

KBC Bank Ireland approached everything with a customer-first mindset — but unfortunately, their old website platform wasn’t keeping up. Customers struggled with simple tasks like submitting applications, while updates took far too long to implement, and customer needs tracking was all but impossible. Luckily, Liferay had just the customer-first solution they needed.

Today, the new platform is working wonders. Its updated self-service offerings help personalize the customer experience without a high demand for time or resources. Meanwhile, information is easy to find and readily digestible to help customers make informed decisions. The site has led to a 30% increase in customer conversion, improved security, frequent updates, and even a better tracking and monitoring framework to help KBC Bank Ireland learn more about customers. In fact, the platform even won an award for the best banking website.

Get More From Personalized Banking

Today’s customers, whether B2B or B2C, expect personalization around every corner — especially when it comes to banking experiences. Financial institutions need to keep up with their consumers by choosing platform solutions that enable sleek, powerful customer interactions at every touchpoint.

An improved, personalized customer experience comes with many of its own benefits, but it also opens the door for up- and cross-selling — good news for financial institutions and customers alike. Because digital experience platforms allow banks and credit unions to gather customer data and deliver relevant offers, customers can count on a better, more supportive partnership. This, in turn, means they’ll remain loyal and create even more opportunities for revenue growth.

If your financial institution is ready to turn digital banking into personalized banking — and, in turn, benefit from up- and cross-selling opportunities — a digital experience platform is the first step. Explore Liferay’s Financial Services Client Portal to see how personalized service changes the landscape.