‘After about 15 minutes, bank customers would say to me, what personalization?’: Amdocs’ Katie Pagenkopf

There’s a lot of talk about personalization being the Holy Grail of banking. Some firms even use the terminology hyper-personalization. But to be honest, few banks actually provide deeply personalized products. With all the tech advancements of the past decade, it’s still mostly one-size-fits-all banking.

It’s not necessarily their fault, either. Given the history of banking and data siloed by products, banks can struggle piecing it all together. That’s changing though as creative technology solutions are able to help banks take a more customer centric approach and in doing so, get much better at providing personalized offers and pricing. 

For this episode, I spoke with Amdocs’ Katie Pagenkopf about research she conducted that went deeper into what type of personalization bank customers really want, prioritizing the ones who are most open to targeted offers. Katie goes further, with some ideas about how banks can begin to deliver on the opportunities afforded by better personalization, leveraging their existing investments in their core technology.

This podcast was produced by Tearsheet Studios. We worked closely with Amdocs, a global technology company with 40 years of experience providing personalized pricing and products to the telecommunications industry. The firm is increasingly active in the financial services industry, too. This is part one of a 2-part podcast series.

There’s also a guide available with the best of this interview: Unlock the power of personalized product offerings: 3 approaches for banks to provide the experiences their customers want. Download here.

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The following excerpts were edited for clarity.

Katie Pagenkopf, Amdocs: I’m the Director of Strategy for our financial services practice at Projekt202, an Amdocs company. And we sit in the category of global digital experience service providers. I am part of the delivery team of about 50 consultants. We are the strategists, designers, technologists and program managers who are working on some of the toughest problems at the intersection of banking and technology.

Banking customer archetypes

I learned that there are two big camps of customers. There’s one group that understands personalization and has some sort of awareness that their bank can tailor experiences or offers to them. And they’re excited because they either see that as a reward for their loyalty or genuine assistance from the bank. 

There’s another camp that understandably approaches personalization with a kind of fear posture. They are very concerned about data privacy and making sure that what the bank knows about them is not super intrusive.

The Method Man and The Commander in Chief

The folks that I spoke to who were in the bucket of the Method Man, they had some sort of very negative experience with a credit card or a checking account in their late teens and early 20s. They all reported that experience in detail, even ones who were like in their 40s. These negative experiences seemed to follow them throughout their life.

The Commander in Chief

The Commander in Chief personality would say things to me, like, the amount of information that my bank has about me is unsettling. They really wanted help having a single view of their financial ecosystem, so that they could reduce the complexity. And if banks approach them with any kind of offer or promotion that doesn’t help them simplify their finances, they are not interested.

Need to build trust

Banks in the US are suffering a massive trust gap, as we see more and more fintechs enter the market. Fintechs are becoming the primary financial relationship for many customers and by primary financial relationship, I mean that’s the FSI that the customer has their salary deposited into. That’s kind of the origin point for all of their financial activities.

What I heard from this group is that there are things like fraud alerts or sort of organizational dashboards that would signal to them that their bank cares about who they are and cares about their financial health.

There’s a lot of work to be done beforehand. But for this group, my sense is they will reward brands with their loyalty if they are able to step back and say, aha, this or that bank is finally trying to help me.

Enter Value Seekers and Shoppers

I characterized people who were more curious about personalization and more leaned in to the possibilities of the experience as Value Seekers, with slightly less complex transaction volume and a financial perspective. And then Shoppers on the other side, who have higher transaction volume. The Value Seekers often were slightly lower income or just had more dependents to care for. They were very interested in any way to save money, so coupons or discounts delivered to them for products and services that they use regularly were extremely appreciated.

And then the Shoppers, they saw personalization almost as a type of entertainment. And there was another kind of gender perspective that emerged here: this was largely a female group. To highlight the entertainment aspect, there was one person in this group who told me she was part of a Facebook Group in her community and they would share with each other different deals that they were getting through their credit cards or other rewards programs. If she did not receive a promotion or an offer that someone in this Facebook group had, she would actually call the brand and inquire specifically about eligibility.

3 different formats of personalization

Actual offers are one type of personalization. I think of delivering information or advisory to customers as a second one. And then a third approach to personalization would be what I call ‘in process personalization,’  actually helping the customer through a series of steps to realize the benefit of personalization. 

So with Shoppers. I had one customer talk to me about his grocery store app and how he always bought the exact same almond creamer. He loved it and he’d been using it for years. He was elated when he would get a 50 cent off coupon through his app towards this particular type of creamer. And that would prompt his trip to the grocery store. 

In terms of information and advisory, I think particularly for the Value Seekers, they are usually dealing with more constricted budgets. They can really use advice and information on what is happening across their spending landscape where they might be able to save money. Let’s say their current reward credit card is for airlines, but they would love to have someone tell them like, hey, actually, it would be a better value for you to get that gas credit card and save money on your gas because you do so much more transactions at the pump versus with an airline.

Robo-advice, for example

One of the things that came up was digital advisors for wealth management. Customers want some sort of way to let a personalization engine create scenarios for them on how much to invest in broad categories of where to invest. Customers then want their financial institution to prompt them on when they need to come in and reevaluate their portfolio and some general guidelines for how to do that.

The barrier to entry is going to be a little bit lower just from a kind of experience perspective. You’re going to get a little bit more forgiveness from these sets of customers as you test and learn and roll out these different programs. So I see it as less of a reputational risk for our clients.

Customers say they miss out on personalization from their banks

So when I was doing the research, I would start out by asking customers in general to describe personalization to me. And then I would move into asking them about banking. And then about 15 minutes or so into the interview, I would say, okay, so tell me about your experiences receiving personalization from your bank. And, and they would tell me, they would look at me and they would say, what personalization? 

There was one woman I spoke to: She and her husband just shipped off their two sons to college and were going to do the RV lifestyle. They had sold their home. They were extremely alarmed when they received offers from their bank to refinance their mortgage.

Low hanging fruit for banks to deliver better personalized offers

It seems like the awareness is there. But it’s a massive technology investment. So it would require banks to connect the data across all of their portfolios. So by all of their portfolio, I mean, if they have mortgages as an offering, checking accounts, savings accounts, certificate of deposits, auto loans.

The bank needs to have this holistic view of the customer and not just be blasting offers, based on these individual silos of their business.

I think one of the first things every bank should be doing is setting up a low balance alert. So there is a prominent bank in Canada, who has already cracked this problem. They are able to calculate for each one of their customers what the amount is that once the customer’s checking account gets to that amount, they are at risk for overdraft. So like you might have a threshold of let’s say, $512. I might have a threshold of $630. We would get messaging when our account reaches those distinct amounts, alerting us like hey, you’re at risk for overdraft.

Some of the big banks, at least in the US, are waking as they’re reevaluating their fee structure. Charging $20 or whatever for an overdraft isn’t worth it when the cost of acquisition for the customer is many times that.

Who’s stepping in?

What we see happening in the marketplace right now is more sort of marketing agencies, or the really big consultancies, who come in to clients. And there’s a lot of fluff and a lot of jargon. And unfortunately, they’re pretty light on the technology piece. So we pride ourselves in having best in class technologists.

And then with Projekt202, we kind of layer on top of that. We have strategists, designers, and front end developers who can work with clients to get that first overdraft alert scenario out to market or bill pay, like letting customers know proactively that they have bills coming up.

We have a tool, or a product, called Catalog, which allows business users, like, say a marketing manager at a bank, to be able to set up different promotions or educational content to be directed at specific customers. So in essence, it is a personalization engine.

Build, buy, or partner on personalization?

I think what I have seen so far is because of the complexity, and the siloed nature of many banks, they kind of need a third party, someone who could be that trusted adviser, look at things objectively, and help all stakeholders move forward in a productive fashion.

Personalized offers and pricing is here. Though we haven’t seen its true power unlocked yet, there are tools, technologies, and companies making it happen.

Stay tuned for the second part of this series, where we drill down into the Amdocs product suite to see how the pricing and personalization engine works and what financial institutions are doing with it to better serve their customers.

Tearsheet Studios worked with Amdocs to create a guide all about how top financial institutions are making big strides in personalization leveraging their existing technology investments. Download here.