Banking
How Banks can Build Trust with Customers: Privacy-Centric Strategies
Global Banking & Finance Review®
Company
Caleb Benningfield
By Caleb Benningfield, principal solution architect, Amperity
Customers want personalization. It used to be that as customers browsed websites and made purchases from brand to brand, third-party cookies would collect data on their movements. With all their online behavior tracked, marketers could follow customers across the web and deliver customized ads.
But the old ways are changing. Third-party cookies are being phased out by major browsers and regulations like General Data Protection Regulation (GDPR) and the California Consumer Privacy Act (CCPA). On top of that, customers are demanding greater privacy and control of their data.
But one thing hasn’t changed: Customers still demand personalization. Financial institutions must find new ways to balance personalization with privacy. This means shifting their focus towards privacy-centric strategies that respect customers’ data and preferences.
Forrester released five privacy personas in its2022 U.S. Consumer Privacy Segmentation report. These personas are based on attitudes and behaviors toward companies’ collection and use of personal data.
The largest segment, Reckless Rebels (31%), are willing to share their data for better personalization and are the least concerned about privacy. The second-largest group, however, the Skeptical Protectionists (23%), are highly concerned about the security risks of digital life and avoid all types of advertising. Between these two extremes, three other profiles emerge—Conditional Consumerists, Data-Savvy Digitals and Nervous Unawares, who vary in their privacy preferences and behaviors.
Customers are increasingly concerned about online privacy and security. Forrester showed that all five customer segments use at least one tool to protect personal data.
If financial institutions want to build trust with all their customers, they not only need to be transparent about data collection and usage but also provide customers with meaningful choices. Investing in a preference-management experience can build both consumer trust and your first-party data. This includes implementing tools or systems that allow customers to opt out of specific communications or data sharing.
Data collected across multiple digital and offline touchpoints—purchase history, email history, support tickets, loyalty programs, POS—becomes challenging to manage and activate when it’s siloed.
This siloed data can also cause marketers to treat customers as multiple people. This is particularly true for engaged customers who give you the most data. And the more data that’s collected, the higher the risk of dirty data, like misspelled names or duplicate records. This can lead to high-value customers receiving multiple irrelevant campaigns, resulting in a poor experience for them which creates a risk of unintentional customer churn and wasteful excess marketing costs.
A unified data strategy allows for more efficient and accurate data management. This includes suppressing customers who have opted out of communications and then being able to maintain the integrity of that information across all channels. By understanding the types of data, where it’s stored, and how it’s collected and used, marketers can make informed decisions and tailor their strategies to meet the unique needs of their customers.
Investing in customer data platforms (CDPs) enables financial institutions to track, manage, and integrate customer data across all touchpoints, resulting in a more cohesive and personalized experience for customers. This not only improves the customer experience but also saves time and resources while keeping companies compliant with privacy laws
With a unified data strategy in place, financial institutions can build trust with their customers by providing personalized experiences based on accurate and relevant data.
Amperity delivers the data confidence brands need to unlock growth by truly knowing their customers. With Amperity, brands can build a first-party data foundation to fuel customer acquisition and retention, personalise experiences that build loyalty, and manage privacy compliance. Using patented AI and ML methods, Amperity stitches together all customer interactions to build a unified view that seamlessly connects to marketing and technology tools. More than 400 brands worldwide rely on Amperity to turn data into business value, including Alaska Airlines, DICK’S Sporting Goods, Endeavour Drinks, Planet Fitness, Seattle Sounders FC, Under Armour and Wyndham Hotels & Resorts. For more information, visitamperity.com or follow us onLinkedin,Twitter,Facebook andInstagram.
Data privacy refers to the proper handling, processing, storage, and usage of personal information, ensuring that individuals have control over their data and that it is protected from unauthorized access.
Customer data management is the process of collecting, storing, and analyzing customer information to improve business relationships, enhance customer experiences, and ensure compliance with data protection regulations.
The General Data Protection Regulation (GDPR) is a comprehensive data protection law in the European Union that governs how personal data of individuals is collected, processed, and stored, ensuring privacy rights.
The California Consumer Privacy Act (CCPA) is a state statute that enhances privacy rights and consumer protection for residents of California, allowing them to know what personal data is collected and how it is used.
A Customer Data Platform (CDP) is a software system that consolidates customer data from multiple sources, creating a unified customer profile to improve marketing and customer engagement strategies.
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