Bank customers to expect Netflix-level personalisation

Banking customers will come to expect the same level of personalisation that they are provided by the likes of Netflix and Spotify, Standard & Poor’s has predicted.

According to Standard & Poor’s Future of Banking: Fintech Flags Turning Point in Australian Banking report, banking customers will expect more than just a home loan or savings account in the future; rather they will expect their providers to offer customised products based on their full financial profile, similar to the way Netflix and Spotify tailor their offerings.

“If today’s banks can rise to this challenge, they have an opportunity to offer value beyond a competitive price for a mortgage loan,” Nico DeLange, credit analyst at S&P, wrote in the report.

Acknowledging that the banking industry is poised for “substantial upheaval” on the back of fintech advancements, the S&P report notes that providing a high level of product personalisation will be easier as the open banking regime in Australia takes off. This is because the regime – a precursor to an economy-wide open data model – is expected to increase the availability of, and access to, more meaningful data on customers.

“We believe access to comprehensive financial data will allow banks to more accurately price for risk and create tailored product offerings. Broader applicability of open banking may also bring other industries and sectors into play and create opportunities for cross industry partnerships and investments,” Mr DeLange wrote.

“In this regard, we believe that open banking is more ambitious in Australia than the rest of [the] world, with the introduction not only in banking but also other sectors, including telecommunications and energy.”

The ratings agency said it expects neobanks to be one of the bigger beneficiaries of open banking as they are not anchored down by legacy systems or extensive branch networks.

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Source: Bank customers to expect Netflix-level personalisation – Mortgage Business