Get to know your customer: Segmentation based on behavior rather than buyer personas

Ever experienced Greek hotels popping up in your social feeds after discussing that long-dreamed holiday with your friends while too close to your phone?

It’s been a few years since we realized our phones listen to us. Yet, banks come across as being in the dark. 78% of respondents would continue using their bank if they received personalized support, but just 44% of banks are actually delivering it. Customers expect a personalized mix of financial advice, one-on-one support, and guidance on building their savings. But for many right now, the best place they are getting this advice is TikTok.

WHAT THE TOK? What the next generation is looking for

Since 2017, nearly 40% of millennials don’t use brick-and-mortar banks for anything. Today, more Gen Z’s are searching for financial advice on popular social channels rather than visiting their bank. Why? Here are our top three reasons:

  1.  Apps like TikTok and Instagram use their data to share content based on customers' behaviors—and the more people engage, the better the personalization, and the cycle continues.

  2.  These channels allow real people to express their real issues and how they solved them — the content is relatable.

  3.  When users find a profile that interests them—whether that’s a hotel’s Instagram page or a financial influencer—they can reach out directly to ask for more information 24/7.

So, what can banks do to increase engagement, generate relatable content, and provide a direct channel that gives information instantly? Let’s dive in.

DATA CRUNCHING : Millions of data points, several behaviors, one customer

To provide customers with appropriate advice, banks must know who their customers are—and not just the top-level buyer personas that marketers traditionally bundle their customers into. Artificial intelligence (AI) and machine learning (ML) are increasingly supporting banks with pattern analysis, detecting problems such as fraud, and identifying business opportunities.

AI in the banking industry is expected to keep growing and is projected to reach $64 billion by 2030. Behavioral profiling is having the most significant impact. Bank of America has 50 million data points—and AI helps them manage it. At the same time, Socure’s identity verification system uses ML to analyze an applicant’s online, offline and social data.

“Know your customer” is pretty sound business advice across the board in banking—it’s also a federal law. Rather than looking at one customer journey that fits all, banks must understand how each customer interacts with and needs the bank to recognize them against hackers, protect them, and provide better products. Figuring out their needs is simple: It starts with usage data and ends with feedback.

CONTEXTUAL DATA COLLECTION : AI helps banks and customers get to know each other better

As we saw with Walmart and Target earlier this year, all the predictive analysis tools in the world mean nothing without customer validation. Banks need a more consistent way to communicate with customers, and AI-powered conversational chatbots are shedding some light.

Let's say a customer starts making regular purchases at the same Starbucks every weekday. One morning he receives a notification from his bank: Hey Sam, we noticed you like a morning coffee! Did you know you could save X amount a year with a coffee subscription? With each response or click on a link, the bank increases its ability to provide personalized products while building trust with the consumer.

46% of respondents said they want banks to help them avoid fees, and 37% expressed interest in receiving account notifications. Brands like TikTok and Instagram build trust for their user-generated content (UGC). Banks need to keep up and adopt human, people-to-people connections digitally too.

At BOND.AI, we understand an individual’s financial strengths more than they know. Intuitively analyzing their transactional data with our AI-powered Empathy Engine® allows us to feed financial support directly to customers via their BOND mobile app. The users can gain holistic awareness of their purchasing habits and daily reminders to support them in reaching their savings goals.

Are you looking to increase engagement with your customers? Get in touch — We’re here to help.