In today’s tech-savvy world, Indian consumers are demanding more from their financial institutions. They’re looking for insightful advice, smooth experiences and stellar service across all channels. This is where hyper-personalisation in BFSI comes into play, using advanced data analytics, AI, and machine learning to meet these high expectations.
Transforming customer engagement
Personalisation is about tailoring every interaction to fit each individual’s needs. A recent CRIF whitepaper, “Data-Driven Personalisation in Banking,” shows why people are drawn to these personalised services.
They make customers feel genuinely understood and valued. Hyper-personalisation takes this a step further by treating customers as unique individuals, not just part of a larger group. Even though automation and big data drive a lot of this, it helps create a more meaningful connection between BFSI institutions and their customers.
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Real-time data processing and behavioural analysis
The BFSI sector today thrives on real-time data and behavioural analysis. This approach allows institutions to deliver personalised financial recommendations almost instantly. For example, if your spending habits indicate a growing interest in new investments, institutions can promptly suggest suitable products. This capability has greatly improved how financial services address customer needs, leading to a more engaging user experience.
Mobikwik uses personalised messages and reminders for utility bill payments, making it easier for users to manage their payments. Their automated welcome campaigns also help new users get familiar with key features, resulting in doubled engagement and a 20% increase in retention.
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Advanced analytics and AI in financial services
Advanced analytics and AI have revolutionised the Indian banking sector, enabling banks to process large volumes of data to identify patterns and predict future behaviours. A PwC report indicates that 82% of banking customers are willing to share personal data for better service, with 73% prioritising experience in their decisions.
ICICI Prudential Life Insurance is a prime example of this transformation. According to Ashish Rao, Chief Customer Experience and Operations, the company uses AI to significantly enhance customer service. They have implemented an AI-powered humanoid bot that reminds customers about renewal premiums, which has led to higher engagement and renewal rates. Additionally, their mobile app employs AI to provide personalised services and insights, improving the overall customer experience.
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Privacy and data security concerns
With the benefits of hyper-personalisation come significant privacy and data security concerns. As Ramesh Lakshminarayanan, CIO, Group Head IT of HDFC, notes, the landscape of cybersecurity is always shifting. BFSI institutions must enhance their security measures to protect sensitive data and maintain customer trust.
HDFC Bank is a prime example of addressing these challenges. Their collaboration with Microsoft marks a major step in their digital transformation. By harnessing Microsoft’s Cloud Platform, HDFC Bank is improving both customer and employee experiences while ensuring that new products and services adhere to stringent security and compliance standards.
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Regulatory compliance in the financial sector
Regulatory compliance is a critical aspect of implementing hyper-personalisation in BFSI. It’s crucial to navigate rigorous data protection laws, including the Information Technology Act, 2000, and guidelines from the Reserve Bank of India (RBI). Institutions need to balance personalisation with robust data security, clear customer consent, and transparency in data usage.
To stay compliant, financial institutions must integrate strong data protection practices into their personalisation strategies. This approach allows them to deliver customised services while upholding high standards of privacy and security.
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Conclusion
Hyper-personalisation is setting a new standard for the Indian BFSI sector, enabling institutions to offer exceptional customer experiences. By embracing advanced technologies and maintaining ethical practices, BFSI institutions can build stronger customer relationships and drive growth. As the industry evolves, finding the right balance between personalisation and privacy will be essential.
At Melt, we spoke with Ravi Sanathanam from HDFC Bank about their approach to hyper-personalisation. From revenue marketing to customer expectations, we covered it all. Be sure to catch the full episode for a comprehensive look at these trends!