Bank Product Switching: What Happened to Personalization?

Bank Product Switching: What Happened to Personalization?
"At a time when it's critical to not only retain customers, but also grow wallet share, my bank lost me."

Last week, I received a large brown envelope in the mail, addressed to me from my primary bank. Curious, I opened it, and inside informational material and a shiny new credit card. As I hadn't applied for a new credit card with my bank, I was confused.

A second, smaller envelope holding the statement from my back-up credit card cleared things up. Apparently, my primary bank had purchased - and discontinued - my secondary card.

Needless to say, I was upset. Here's why:

Problem #1: The bank made an assumption

Because the financial institution failed to inform me about my secondary card's acquisition and cancellation, there's no way it could've known whether or not I'd want a replacement card. Instead, the bank simply assumed I'd be receptive to an entirely new product, and sent the card anyway.

Problem #2: The bank didn't know me

Despite the fact that the discontinued card was a MasterCard, its replacement was a Visa. Like many ex-bankers, I prefer to keep both networks in my wallet, and I already owned a Visa card through my primary bank (which also offers MasterCard). Had the bank done research into my personal spending habits and holdings, it would have seen that I prefer to carry both types of cards and would be dissatisfied with receiving a network I already owned. This total lack of recognition was especially disheartening as I'd been a customer of the bank for 17 years.

Problem #3: The customer service agent was poorly informed

Upset, I called the bank, hoping to receive insight into why I was sent a new product with no notice. Sadly - though, by this point, not unexpectedly – the agent I spoke with wasn't able to explain the questionable card replacement process. Instead, I was merely told that the new card was "the best choice" and still carried "no annual fee." This was another miss by my bank, as I had previously paid an annual fee on the discontinued card.

Problem #4: The bank failed to re-engage me

In response to my frustrations, I was told that my feedback would be captured and provided to the executive team, and I have since been invited to participate in the bank's customer advisory panel. While I cancelled the Visa card, I'm still upset. And while I appreciate the request for feedback and invitation to join the panel, I view these gestures as being too little, too late.

Banks have the right to discontinue products and sell books of businesses – those things happen every single day. I fully appreciate, support and respect these practices as necessary facets of the financial ecosystem. The real issue was with my bank taking a cookie cutter approach to moving every consumer in a purchased portfolio to the same product.

I'm certainly not alone in my experience, and the sentiments I expressed are being echoed by a growing number of consumers who feel increasingly underserved by their financial institutions. Take, for example, Pega's Moments of Truth survey, which found that 86 percent of customers feel their bank doesn't personalize offers and services to meet their needs.

At a time when it's critical to not only retain customers, but also grow wallet share, my bank lost me.  Today, banks should look to actionable analytics that can assist them in driving insight-based offers, determining next best actions, and steering clear of mass segment offers that may alienate their clientele.

I invite you to share your experiences and feedback, and to have a look at the accompanying infographic for Pega's Moments of Truth survey. Click here to listen to how Royal Bank of Scotland is using Pega Marketing to personalize customer interactions.

Monica Hovsepian is the Global Director, Financial Services Industry Marketing at Pegasystems.