Invest in innovative solutions to capture customers for tailored products to specific personas

Businesses across industries – especially banks – are racing to increase the personalization of products, promotions, and digital experiences. Largely because e-commerce and tech innovators have given people a taste of more customized services. People prefer the "just-for-me" feel of tailored offerings and recommendations and expect that level of attention from all the businesses they bolster. As such, to thrive, banks need to deliver the types of personalization that customers expect ahead of their competition. What form will that take in the world of financial services?

In our study Personalization and Multigenerational Banking, commissioned by Amdocs and conducted by Dynata, surveyed 1,000 consumers in the United States. We wanted to learn more about how household composition impacts personalization preferences for banking. For instance, would multigenerational households – with their complex financial needs – be more, or less interested in personalization than households without dependents?

The survey revealed that people want more tailored banking experiences and offers to help them manage family finances. Innovative and family-focused personalization options interested people more than traditional promos. That was true across segments, with households with children expressing the greatest appetite for personalization. Explore the results of the survey for yourself.

Generational banking: A ripe opportunity for banks

According to the US Census Bureau, six million households in the United States (7.2% of all households) contain three or more generations, with 30% of households including children. Pew Research found that 15% of older adults live with an adult child. Amdocs’ survey revealed that these multigenerational households have distinctive financial service and banking personalization needs.

Many respondents in our survey living in multigenerational households need more help. Overall, just 38% feel like they have the resources needed to plan for their future - households with seniors being the least prepared at 31%. This is an area where banks are missing an opportunity to fuel customer growth and retention, with 68% of respondents noting that they are interested in banking offerings that help them manage their multigenerational households, now or in the future.

Multigenerational households have unique needs. Transparency and insight emerged as a critical pain point, with 55% of respondents reporting to have no insight into their elderly family members’ banking habits and accounts. Additionally, parents (those in households with children under 21) presented as a key demographic that wants more products and services, with respondents indicating interest in relevant rewards (40%), financial consultation (31%), and credit score-related tips (37%).

Customers intrigued by AI, gamification, greater personalization, and more

Deeper probing revealed that people are especially drawn to next-generation personalization options. Most respondents were interested in custom, real-time financial recommendations generated by AI, with 53% indicating they were somewhat or highly interested. A significant majority of children-having households want AI-based personalization, with 66% saying they were interested and 28% of those indicating they were very interested. Respondents showed openness to AI-based financial recommendations, even if they required giving banks additional access to personal information.

An even larger percentage of respondents – 66% – indicated they were interested in tools that gamify personal finances. The survey defined gamification as making a banking activity more like a game. In particular, this approach to banking appealed to households with children under 21, with 75% interested in gamification and rewards that encourage saving and better money habits.

We asked: How interested would you be in banking offerings that are tailored to help you build on your financial future? This option sparked the most enthusiasm in the survey, with 78% of respondents saying they were interested. Again, children-having households led the way, with 84% interested. Households without children or seniors followed closely at 78%, and households with seniors lagged slightly at 72%.

Precision targeting required for offers

Many in the banking industry view personalization as the right offer to the right customer at the right time. A majority of customers are open to that interpretation – to a point. Just 12% said they were not interested in personalized offers if receiving them meant sharing more information with their banks. And, which offers do the other 88% want? The answers varied to a surprising degree.

Presented with a list of options tied to traditional banking products – such as overdraft protection, high-yield CDs, APRs, and interest rates – no single option attracted more than 50% of respondents. Each of the eight options (see the options) attracted about one-third of the respondents. For banks looking to blend personalization with traditional banking products, success calls for the ability to individualize offers based on data and customer preferences.

Aim to win with personalization

On the whole, these findings indicate that people want personalized banking options – as long as they seem relevant. Family and future-focused banking tools present opportunities for banks, especially when combined with AI. As banks look for ways to expand personalization, they should explore tools, products, and promotions tailored to meet the needs of families and multigenerational households. Review the survey results.