Micro-personalization, Hyper-business and the Red Queen for Financial Services

by Joe Mendel –

“Alice looked round her in great surprise. ’Why, I do believe we’ve been under this tree the whole time! Everything’s just as it was!’

 ’Of course it is,’ said the Queen, ’what would you have it?’

 ’Well, in our country,’ said Alice, still panting a little, ’you’d generally get to somewhere else—if you ran very fast for a long time, as we’ve been doing.’

 ’A slow sort of country!’ said the Queen, ’Now, here, you see, it takes all the running you can do, to keep in the same place. If you want to get somewhere else, you must run at least twice as fast as that!’”

Lewis Carroll, Through the Looking-Glass, and What Alice Found There

The Red Queen Hypothesis

Charles Lutwidge Dodgson penned those words as Lewis Carroll in England in 1871, only 6 short years after the final throes of America’s Civil War.  Today, 150 years later, the words could not be truer of the world in which we live and conduct business.  Simply said, today, financial services institutions and other industries have to “run faster” than they ever have just to stay current with regulatory requirements, let alone become more competitive and profitable, especially in the world of fintech disruptors, digital transformations and new operating and engagement models accelerated by a global pandemic.  As a result, todays financial institutions seem to be bound by the “Red Queen Hypothesis” which proposes that “organizations must constantly adapt, solve and proliferate not merely to gain competitive advantage but also simply to survive while pitted against ever-evolving opposing organizations in an ever changing environment”.  The way consumers demand and request services has changed as lines are blurred between industries and access to information is at their fingertips.  Everyone is running faster just to make progress.

The industry has spoken for some time about “data as an asset”, “monetization of data” and “data as the new currency”, but I think the past year has moved us beyond those terms and into a new realm where “velocity” becomes the new currency as speed-to-market and speed-to-customer are the result of having to run faster to capture the minds and hearts of customer market share.

We call this a step into the hyper-business age, where the goals at the macro company level are to get from strategy on paper, to execution to impact in the shortest amount of time possible with the potential for largest returns and increased competitive advantage.  We want strategy to become reality.

Industry Context

Banks have basically only a few methods available to them to grow and become more profitable:

• Acquire new customers and/or broaden customer base making revenue more disbursed (geo).
• Sell more product and services to existing clients
• Sell profitable products to profitable customers
• Simplify product and service offerings
• Increase interest rates, fees and service charges
• Reduce operating costs and cost to serve
• Install advanced technologies to optimize performance and reduce costs
• Acquire other bank(s) and integrate
• (New) Partner with fintechs with open banking API’s to leverage their technology and offerings

But in 2021 and beyond customer experience will overtake price and product as the key brand differentiator.  New consumers/bank clients demand services across all industries in an accelerated on-demand economy.  They engage differently today than they did in the past.  Retail customers use search engines and social media like Google and Facebook to find the best deals then they can order just about any good or service from online companies like an Amazon. They are used to on-demand self-help environments that allow them to, at the time and place of their choice and on the device at hand, conduct business in the manner with which they choose.  For the customers… banking services will ever be necessary, but they want it in context with their life moments and in a manner that mirrors their online life.  Banking products have become common and ubiquitous across financial institutions.  They remaining avenue for differentiation and competitive advantage is a pleasant, simple and stress-free customer interaction experience.

Stepping into the hyper-business, micro-personalized age

So how do we get there.  Here are some things to consider when creating a hyper-business factory.

Raw Materials

• First, make sure your core banking system can support your new needs
• Ensure you are capturing meaningful data points and incorporate newer alternate information sources (social media, etc.) into your model
• Incorporate a robust governance and quality foundation that produces single-source, trusted data points
• Create a warehouse for this information that will be an easy distribution point but is robust enough to accommodate the flood of available information soon to be generated by 5G and WiFi6.

Manufacture

• Utilize AI and machine learning to augment data preparation, profiling and quality, harmonization, modeling, manipulation, enrichment, meta-data development and cataloging in name of accuracy and velocity.
• Install advanced intelligent augmented analytics that automate insights using machine learning and natural-language generation. Use machine-learning automation to augment human intelligence and contextual awareness across the entire data and analytics workflow. Augmented analytics will be crucial for delivering unbiased decisions and impartial contextual awareness. It will transform how users interact with data, and how they consume and act on insights.

Distribute

• Utilize cloud and other methods with “big pipes’ to distribute the information into the hands of the marketing team and the front-line workers who can act upon it

Sell

• And finally transform your team into the “iForce” (impactful workforce). Start building the workforce of the future by designing the best combination of people and machines. Take advantage of working with bots, digital assistants, and knowledge workers to push digital data boundaries. Accelerate team performance through the development of new digital competencies and leadership styles, innovative team structures and approaches, and digital experiences that augment the new virtual/remote workforce.

What is the ultimate goal?

• High confidence, high value information accessible from a single version of the truth
• Predictive and prescriptive selling tools generated by advanced analytics accessible in a user-friendly manner for insightful analysis by an impactful workforce
• A unique customer experience that mirrors online life with contextual and relevant offerings

I will leave you with one more thought in the form of a riddle:

Five frogs are sitting on a log

Four decide to jump off.  How many are left?

Answer: Five

Why?

Because there is a difference between deciding and doing.

Don’t just decide to make customer experience a strategy.  Don’t just decide to utilize advanced analytics to drive micro-personalization and leap into business in the hyper-mode.  Make the choice to act – do.

At RCG Global Services we specialize in techniques that help you harness the speed of now that will drive your evolution to the hyper-business age.  Contact me and I will help you make your strategy a reality by getting from words on paper, to execution, onto impact.