The need for personalized customer experiences in financial services

June 18, 2022

By Dan Slate - Senior Director of Product at Wealthfront 

Personalization is a buzzword that’s been around for a while in relation to customer experience. However, it’s only been in recent years that companies have been able to implement personalization technology in a way that actually delights customers with a meaningfully better experience. Thanks to online pioneers like Amazon, Netflix, Spotify, and others, customers have grown to expect and desire personalization. In fact, a survey conducted by Epsilon and GBH Insights found that the vast majority of respondents (80 percent) want personalization from retailers.

However, some industries have not adapted as quickly as others. Financial service providers, in particular, lag when it comes to offering personalized experiences. Many organizations are still playing catch up just to make their products and services available through digital channels. According to the Boston Consulting Group, a majority of people who are open to or actively looking to change their bank would consider banking with a tech company such as Amazon, Facebook, or Google, if the option was available. So, it goes to say that there is plenty of opportunity for banks to enhance their offerings.

As the financial industry adapts to customer demand for more personalized customer experiences, the flood gates open for fraudsters to find new ways to infiltrate the system. That’s where identity verification comes into play as a crucial component in ensuring safety to both customers and companies. By adopting modern identity verification technologies that integrate with existing systems, financial service providers can quickly gain ground and position themselves as hefty competitors within the personalized experiences space. 

Learn more about IDV industry trends from other Identity Innovators 

What Does a Personalized Experience Look Like in Banking?

Banks have been targeting customer segments and tailoring their marketing campaigns to them through traditional channels like direct mail for decades. Personalization in banking goes a step further, using data gathered from account profiles, transaction touchpoints, and any other form of customer engagement to create more customized, relevant end-to-end experiences for customers. 

The key to creating personalized banking experiences for the financial institution customer is to figure out the best balance between safeguarding your organization against security risks and providing seamless digital banking interactions for the customer so they can accomplish what they came to do. 

That’s where identity verification and biometrics come into play. Used the right way, they can be an organization’s biggest assets to creating the optimal customer experience. With these types of technologies, customers have the power to be in control of their online experiences and tailor their financial services and products according to their own preferences. 

Leveraging Identity Verification and Biometrics in Personalized Experiences

Identity verification and biometrics provide organizations with a flexible and multi-functional toolkit that personalizes the identity check experience based on the type of transaction and level of associated risk. 

For example, if a transaction involves the transfer of a large sum of funds, higher levels of identity verification are applied versus if a customer is conducting a low risk transaction, such as updating their contact information in their account profile. Identity checks are done in a targeted way that aligns with the level of risk. 

At Wealthfront, we integrate banking and investing services to make it delightfully easy to grow long term wealth. Through the power of automation, Wealthfront delivers personalized products to help both sophisticated and new investors learn, lower costs, and grow wealth.

We incorporated Mitek’s identity verification and biometric solutions to better manage fraud and risk associated with our banking features. This has enabled better detection and prevention of synthetic identity fraud, the automation of previously manual identity verification workflows, and a better customer experience through targeted, effective, and seamless identity verification based on the risk posed by the client or the transaction they’re trying to complete. Identity verification shifts the efficient frontier when it comes to the trade-offs between user experience and the cost of fraud, allowing us to invest more in growth.

Creating Personalized Experiences Benefits Everyone

This new type of digital experience not only benefits consumers, but also connects financial service providers to a treasure trove of anonymized customer data that can be used to improve operational efficiencies, provide insight into future product and service development opportunities, and help teams make more data-driven business decisions. 

Consumers have a large variety of choice regarding the financial service products they use. The onboarding experience has become more seamless over the years, especially with digital-first competitors disrupting the market. Incorporating identity verification and biometric solutions into the digital experience will help organizations remain competitive, and enhance customer acquisition and customer retention.

Check out what other Identity Innovators have to say about how to deliver great IDV customer experiences. 

Disclosure: This communication is for informational purposes only. Opinions expressed by Dan are his own and do not reflect the opinions or views of Wealthfront or its affiliates. Any links provided by Mitek are not intended to imply that Wealthfront or its affiliates endorses, sponsors, promotes and/or is affiliated with the owners of or participants in those sites, or endorses any information contained on those sites, unless expressly stated otherwise. This communication is not intended to establish a professional relationship with Dan, e.g., as your financial adviser, or substitute professional financial advice, and it should not be relied on as such. Please consult your personal financial and tax adviser regarding your unique personal circumstances before investing. Investing involves risk, including possible monetary loss, and past performance doesn't guarantee future performance. Wealthfront hereby disclaims any and all liability to any party for any direct, indirect, punitive, implied, special, incidental, or other damages arising directly or indirectly from this communication, which is provided as is, without warranties. Wealthfront Advisers LLC, an SEC registered investment adviser, Wealthfront Brokerage LLC, member FINRA/SIPC.