RBS’s Personology: Bridging the Gap Between Data and Personalization in Banking

Lets dwell on how RBS’s Personology Merges Big Data with the Human Touch in Banking

Introduction

In the dynamic and ever-evolving landscape of the banking sector, The Royal Bank of Scotland (RBS) is taking a significant leap. With its innovative ‘Personology’ strategy, RBS is not just embracing advanced data analytics but is also reverting to a customer-centric approach reminiscent of the 1970s. This strategy emerges as part of the bank’s transformative journey, especially notable as it undergoes re-privatization seven years post a substantial £45 billion bailout during the financial crisis.

The Genesis of Personology

RBS’s Personology is rooted in the need to reforge the lost connection between banks and customers, a disconnect that gradually emerged post the 1970s. Earlier marketing efforts by banks primarily focused on sales, often sidelining customer needs and preferences. This approach led to a transactional relationship (focusing on what the bank wants vs what the customer wants), lacking in personal touch and trust.

Recognizing this gap, RBS has invested £100 million in enhancing its analytic skills and technology. A dedicated 800-person-strong analytics department is at the forefront of this initiative, symbolizing the bank’s commitment to integrating big data with a personalized customer experience.

The Strategy in Practice

Personology is not just a theoretical construct; it’s a practical approach transforming RBS’s interaction with customers. A quintessential example of this is how RBS analysts utilized financial transaction data to identify customers who were inadvertently paying for redundant services. This proactive approach, initially perceived as risky, turned out to be a success, with customers appreciating the bank’s initiative to safeguard their interests.

The Royal Bank of Scotland’s (RBS) ‘Personology’ initiative is a comprehensive strategy aimed at enhancing customer relationships through a combination of data analytics and personalized service. Some of the key initiatives taken by RBS as part of its Personology strategy include:

1. Data-Driven Personalization: By analyzing customer transaction data, RBS identifies specific needs or issues that individual customers might face. This approach allows the bank to provide tailored advice and solutions, enhancing the customer experience.
2. Proactive Problem-Solving: An example of this is RBS’s initiative to identify customers who were inadvertently paying for redundant services, such as duplicate insurance coverages. This proactive identification not only saved customers money but also built trust.
3. Personal Touch in Customer Interaction: Incorporating gestures like wishing customers on their birthdays when they visit a branch adds a personal touch to their banking experience, making customers feel valued and recognized.
4. Automated Alerts for Customer Convenience: Sending automated text messages to customers, like informing them about the safety of their cash if left behind at an ATM, is a practical use of technology to provide peace of mind and convenience.
5. Investment in Analytics Technology and Skills: The establishment of an 800-person-strong analytics department, backed by a £100 million investment, highlights RBS’s commitment to integrating cutting-edge technology and skilled personnel to drive the Personology strategy.
6. Enhanced Customer Service Approach: Reviving the ‘back to the ’70s’ approach to customer service, where bank staff knew customers by name and understood their personal financial needs, is a cornerstone of the Personology philosophy.
7. Educating Customers on Financial Products: Through personalized data analysis, RBS can better educate customers about the most suitable financial products and services, aligning with their individual financial goals and situations.
8. Building Long-term Customer Relationships: The overall goal of Personology is to transform the bank-customer relationship from a purely transactional one to a more engaged, long-term partnership.

Restoring Trust and Support

The core objective of Personology is to restore the trust and sense of support that customers historically associate with their banks. In the 1970s, banking was not just about transactions; it was about relationships. Bank staff knew customers by name and understood their financial needs on a personal level. Personology seeks to bring back this era of personalized banking, but with a modern twist — using data analytics as a tool to understand and cater to customer needs more effectively.

Challenges and Opportunities

The implementation of Personology is not without challenges. Balancing data analytics with personalization requires a delicate handling of customer data, ensuring privacy and security. Moreover, changing the ingrained corporate culture to adopt a more customer-centric approach demands time and patience.

However, the opportunities outweigh the challenges. By personalizing services, RBS is poised to increase customer loyalty and trust. This approach can also lead to better customer retention and acquisition, as satisfied customers are more likely to recommend the bank to others.

Future Outlook

The Personology strategy is a forward-looking approach, signaling a new era in banking where data analytics and personal touch coexist harmoniously. This strategy could set a precedent in the banking industry, encouraging other institutions to follow suit. As technology continues to advance, the potential for even more personalized and predictive banking services is immense.

Conclusion

RBS’s Personology strategy marks a significant shift in the banking sector, blending sophisticated data analytics with a return to personal, trust-based customer service. This hybrid approach, while challenging, has the potential to redefine the customer-bank relationship, making it more meaningful and mutually beneficial. In a world where digital transformation often leads to impersonal interactions, RBS’s Personology strategy stands out as a beacon of balanced human-centric innovation in banking.