Asia's financial sector has never been more competitive. In just a few years, well-funded fintech firms, mobile wallets, trading apps and digital-only banks have revolutionised the centuries-old banking industry, growing on a tremendous scale compared to their bricks-and-mortar rivals.

Consumer demand for online and mobile banking options is soaring and encompasses everything from payment services to corporate lending. With competition only set to heighten as regulators increase licence allocations, banks will need to step up their own differentiated position.

Differentiation through personalisation 

Today, Asia's financial sector is saturated with choices, as small, nimble players regularly emerge with innovative new offerings. Yet, while legacy banks lack the agility to introduce new products at the rate of their fintech rivals, they can still capture customer loyalty through hyper-personalised services.

This effectively means leveraging real-time customer data from multiple touchpoints to create a detailed, bespoke customer marketing journey. Using this data alongside predictive machine learning can help banks map out an entire roadmap of services for customers, anticipating needs such as cash flow, loan refinancing and even fraud detection.

Demand for this level of personalised digital banking services remains high in ASEAN, and research has shown the positive effects of personalised customer interaction on a bank's revenue. Given their wealth of customer data, banks are well-positioned to offer personal, targeted recommendations to customers on a massive scale through marketing optimization tools.

Customers today expect personalised services both around the clock and at their convenience. That means easy – albeit protected – access to essential banking information, self-service tools and even data-driven financial advice.

To execute this, banks must provide a seamless, omnichannel customer experience that understands and leverages a customer's typical banking journey regardless of the platform or financial background.

However, a truly differentiated and successful value proposition will extend into seamless digital onboarding, fast loan approval and disbursement and 24/7 customer support through virtual assistants. Richer data will also enable banks to offer more attractive pricing and a lower marginal cost of loan disbursement.

The effect of personalisation is apparent in numbers. Research shows that personalised triggered push campaigns achieved higher average click-through rates (CTR) of 17.83% on Android and 13.79% on iOS. In contrast, the CTR dropped to 8.75% on Android and 7.84% on iOS without personalisation. This demonstrates how personalisation is both critical for acquiring a customer base and for differentiating banking brands from competitors.

The privacy paradox

Unfortunately, personalisation comes at a price: privacy. Given the data required to make personalised services possible, banking organisations are facing heavy barriers in the form of data regulations.

Although data-sharing regulations were intended to provide customers with more control over their data, they limit what businesses once hoped was an endless supply of insightful data.

When data is anonymized, for example, it is harder to analyse and create customer profiles. The imminent demise of the browser cookie will also create more barriers to mapping customer journeys. As a result, businesses will need to invest more in valuable first-party data that allows customers' consent.

Nevertheless, in 2022, appreciating the security of sensitive data will ultimately steer banks towards a more customer-centric strategy. Brands can still create personalised experiences by setting parameters for collecting and analysing individual-level data. Ensuring that the relationship between personalisation and privacy is synergistic will build long-term trust and loyalty among customers.

Banks should therefore avoid sharing data with third parties, keep abreast with data protection laws and only collect data that is meaningful and specific to a campaign.

As consumers gain more awareness of their data privacy, banks should work in tandem with the private sector towards utilising their data in a way that benefits them. In doing so, banks will in fact incentivise customers to share their data willingly.

With this happy medium, banks can proactively embrace their role as trusted financial advisors. This will give customers the confidence in their institution to accept personalisation and enjoy the benefits it generates.

Personalised customer experiences are essential for today's bankers if they are to remain competitive in this hyper-competitive world. Banks that add value throughout the entirety of a customer's lifecycle by meeting their needs and recommending relevant offerings will be the ones to see the long-term pay-offs.