Banking for the myPod Generation

This is the third post to discuss the transformation in online banking. In the previous posts, we discussed how the transformation in online banking can be mapped to Maslow's hierarchy of needs model and what banks can do to meet the customer's psychological needs.

Here, I offer some thoughts on what banks can do to offer personalized service and custom products. The online retailer Amazon is best known for one-on-one marketing. Amazon makes recommendations based on my profile, past purchases, what I view on the site and what others like me have bought.

• Stop Spamming Me: First, banks need to stop asking me to open accounts I already have or am not interested in. Bank of America needs to know that if I have clicked "No Thanks" a 100 times to the credit card offer that gets displayed once I log off my account, then I am not interested in their offer.
  
  
• Personalized Products: In the last post, we had discussed the idea of launching consumer communities based on interest areas. Banks can offer customized products to community members.
  Say one of the goals that I have listed in the financial planning community is to save for a month long vacation in Hawaii. The bank can offer me a co-branded credit card with American Airlines with 25000 upfront miles for my Hawaii air-ticket.
  Or based on the analysis of my spend the bank figures that I like to dine out a lot at the NYC restaurants, the bank can offer me a Zagat loyalty card offering me 5% cashback for every dollar spent on dining.
  

• Analysis and Planning: In a Gartner study, consumers listed the the ability to analyze spending and cash flow as one of the top features they are looking for in online banking. ING Direct allows you to create different based sub accounts. To take that a step further, banks should allow consumers to set up goal based accounts with contributions directly debited from salary. There should also be a tracker available that I can put on my bank home page.
  From a spend analysis standpoint, banks should allow me to tag the transactions and then search the transaction based on tagged info or merchant name or purchase date or item name.
  
  
• Consolidated Reporting: Banks need to offer me the ability to link and view all my financial accounts & transactions across different institutions. I want to be able to look at my different savings and checking accounts, auto loan accounts, mortgage accounts, brokerage accounts, 401k and insurance accounts all from bank's portal.
  From the bank's perspective, having access to all this information is huge. This will give them a complete picture of my financial situation allowing them to offer me customized products and services. Also, banks can better assess their risk exposure on me and price their products accordingly.
  For the consumer, I don't have to sift through piles of paperwork and collect all the junk or go through the multitude of websites.
  
  
• Customized Design & Layout: Banks can offer layout and site customization based on demographics, interests, user sophistication and age group. For instance, the younger audience may be interested in adding widgets related to student loan or getting specific feeds from the online communities they subscribe to or other financial planning tools added to their home page.
  However, people in the 50 plus age group may look for a simpler interface and easier communication, bigger font sizes, widgets for retirement and insurance and live online chat for any help needed.
  There may be another set of people who may want to set the background page to their favorite NFL team logo.
  

Finally, for new customers, make switching accounts easy. Banks need to assign a personal representative who will set up direct deposit with my employer, and transfer all the payee information and transactions where I have set up online bill pay and direct debits.

In the next post, we will discuss how banks can help consumers achieve their financial goals.

Previous Posts in this series

Part 1. Online Banking and Maslow's Hierarchy of Needs

Part 2. Online Banking: Communities Help Meet Psychological Needs