Issuers have access to a treasure trove of helpful data about us, such as our payment habits, investment activities, purchases, and so on, writes Sanjay Bhakta, senior director of solutions for Ness Digital Engineering.

Personalization has become a customer expectation. No matter where they go, what device they are using, or how they choose to interact with brands, consumers are getting accustomed to seeing “intelligent offers” that relate directly to them and their circumstances.

The retail and hospitality industries are leaving no stone unturned in living up to these customer expectations. I personally experienced this recently while shopping online for a gift for my wife. I was receiving recommendations for similar products and updates on what others with similar preferences were viewing, though I had yet to perform a transaction on the retailer’s website. My wife and I also experienced personalization during a recent vacation. The hotel, café, restaurants, convenience store, and local boutiques collectively orchestrated our preferences – from keyless entry, TV programming content, and thermostat bliss to just the right amount of luminosity, and even the type of coffee we preferred.

USAA and BBVA have personalized landing pages on their mobile apps, enable consumers to customize the background image on their cards, and access a seamless omnichannel experience, according to Ness Digital Engineering's Sanjay Bhakta. IMAGE: USAA

When it comes to improving personalization for retail banking and issuers, potential is tremendous. Issuers have access to a treasure trove of helpful data about us, such as our payment habits, investment activities, purchases, and so on. The opportunity is clear to see, but personalization remains widely untapped. Why aren’t issuers routinely sending recommendations for how to avoid fees such as overdraft protection?

I believe it’s because personalization requires a wide spectrum of offerings that must be delivered via a frictionless, seamless, and pleasurable experience to customers. Orchestrating that “experience” and providing the content for the offerings and the operational frameworks to deliver it are distinctly “non-core” activities and present a real challenge outside the comfort of “Business as Usual.”

The industry also faces various data, process, technology, and compliance challenges when designing personalized services, including data quality, data islands, system integration, antiquated technologies, inconsistent omnichannel experience, and regulatory and compliance requirements; e.g. Payment Card Industry Data Security Standard

One place to start is a comprehensive assessment of the existing customer experience (CX) – a customer experience audit.

Firms need to define the business value of CX improvements and organizational strategic imperative(s), and link them straight to their customer analytical models. Leveraging customer segmentation data can lead to a better profile of customers using data management best practices, including sentiment analysis and "voice of the customer."

Card issuers can then also outline better analytical models using AI and machine learning, correlating data-driven insights across all customer touchpoints to simplify and improve the CX. By continuously monitoring and calibrating models, they can measure key performance indicators (KPIs) aligned to a line of business process. They can also develop APIs for their analytical models and package them as apps too, distributing them in a marketplace, which can open up new markets and audiences for them.

Issuers must internally agree on their future capabilities model, using categories such as channels, analytics, content management, advertising, and technology platforms. This model can act as the guide rail for necessary governance, principles, architectural criteria, and quality attributes to guide the selection of technologies used to host analytical engines and facilitate the attainment of personalization.

All of this might seem like a confusing process, but employing a technology partner that specializes in digital transformation will provide clarity.

While most of the industry has been incredibly slow to adopt solutions, there are a few organizations that are taking steps in the right direction. USAA and BBVA have personalized landing pages on their mobile apps, enable consumers to customize the background image on their credit cards, and provide a consistent, seamless omnichannel experience, including a contact handoff system in which customer service departments gain insight into customer issues before actually speaking with customers.