SIMPLE BANK: PERSONALIZATION IN THE DIGITAL WORLD IS NOT A MATTER OF FAITH

In ancient Rome, the word persona in Latin or prosopon in Greek, originally referred to the masks worn by actors on stage. The various masks represented the various "personae" in the stage play (Geddes, Leonard, 1911 “Person”, Catholic Encyclopedia). The concept of person was further developed during the christological debates of the 4th and 5th centuries in contrast to the word nature. During the theological debates, some philosophical tools, or concepts, were needed so that the debates could be held on common basis to all theological schools. The purpose was to establish the relation, similarities and differences between the Verbum and God. The philosophical concept of person arose, therefore, Christus, the Verbum, and God were defined as different "persons". This concept was applied later to the Holy Ghost, angels and to all human beings. Since then, a number of important changes to the word's meaning and use have taken place, and attempts have been made to redefine the word with varying degrees of adoption and influence.

In the case of personalization, also known as customization, consists of tailoring a service or a product to accommodate to a specific individual needs. A wide variety of organizations use personalization to improve customer service and satisfaction, increase digital sales conversion, improve marketing results, have more impact on branding, or have a better experience and advertising metrics. Personalization is a key element in social media and recommender systems.

But going a tittle further, there are many different meanings of the word personalization. To be a person implies someone as an individual, with a human-like character, an entity with a specific identity, with specific tones of expression and emotion, and with twists of character and taste. To personalize is to tailor for a specific person. If one were to personalize something, one might mark things with initials, with a name, or a logo, as in personalized stationery. Or one might “make something personal,” specializing a general state of affairs by adding flavor and nuance that reflect the individual’s traits. One might also design or tailor something to meet an individual’s specifications, needs, or preferences. Thus, personalization is about individuation and specialization. Personalization is central to the discipline of human-computer interaction. As Gordon Baxter puts it, “HCI is about particular people doing particular things in particular contexts.”

In the case of web personalization, it can be achieved by associating a visitor segment with a predefined action. Customizing the user experience based on behavioral, contextual and technical data is proven to have a positive impact on conversion rate optimization efforts. Associated actions can range from changing the content of a webpage, presenting a modal display, showing interstitials, triggering a personalized email or automating a phone call to the user. About 30% of e-commerce websites (eMarketer) have invested in the field of web personalization. However, many companies now offer services for web personalization as well as web and email recommendation systems that are based on personalization or anonymously-collected user behaviors. Expert said that e-commerce websites that use personalization can see an increase in revenue of as much as 29% (Compass).

In contrast, very complex data privacy issues such as the NSA leaks, social media privacy changes and data breaches, are alarming marketers and customers who percibe that some times personalization is reached at a high cost. To gain some clarity around this important topic, SAS –the analytics, business intelligence and data management giant– conducted a global study on how consumers balance their need for privacy with their wish for personalization. It was found that 69% of those surveyed said that certain bad news on privacy issues increased their concerns about the matter. Yet, consumers are still willing to trade privacy for personalization. The study showed that 59% still expect businesses to track their preferences and understand their needs. It seems there is a fine balance between the desire for privacy and the desire for personalization. How do we make customers feel “known” and welcomed while also preserving their privacy?

In exchange for consumers' trust, it must be offered relevance, value and control. In exchange, consumers will show trust by providing their information. If customers can be assured that their data is well managed, consumers will provide some personal information for more individualized experiences – as long as they make that choice themselves. Organizations that use and manage data in ways that customers understand and trust will gain significant advantage. The up-front work that organizations must do is to set clear expectations with the customer and then building trust through consistent internal and external activities.

Internally, companies must master data stewardship by making data policies transparent. For all data collected there should be a stated purpose. Ensuring and regularly verifying data quality. Customer records should be accurate and up to date and deleted when it is no longer needed.

Ensuring data security and protection by using the appropriate tools, including authentication, backup, replication, training, policies and procedures. Defining a reasonable data retention period, and the kind.

Externally, companies must engage customers by issuing clear communications on how customer data is going to be used and what types of data are being collected. Providing mechanisms for individuals to review their personal data, to ensure accuracy. This may include periodic reporting, refraining from asking consumers for too much data up front and focusing on building the customer experience by collecting data incrementally and using analytics to enhance experience.

As consumers continue to use technology that opens their lives to others, they have dual expectations of businesses at balance: understand me as an individual and protect my privacy. Therein lies the opportunity to achieve balance when crafting customer experiences.

BBVA SIMPLE BANK

BBVA Simple may technically be a banking service, but CEO and co-founder Josh Reich doesn't want to present SIMPLE that way. SIMPLE has avoided many of the features of traditional banking, including bank branches —in fact it does not have any— and fees —which it got rid of in late 2015—. The company functions online and through its mobile app, plus a network of more than 55,000 ATMs all over the US. Reich positions Simple as a technology start-up that's hyper-focused on customer service and user experience, more in line with the UBER and AirBnB than other giants on Wall Street. 

Reich says that SIMPLE is designed to build banking for how people think rather than how banks work. SIMPLE’s approach spells the future of banking, where ATMs and physical locations are unnecessary and companies are judged based on how enjoyable of an experience they create. Essentially, Simple is doing everything it can to differentiate itself from the reputation of traditional financial institutions, an industry not recognized for its customer service or consumer-friendly policies.

SIMPLE's rise comes at a time when consumers are underwhelmed by banks. Data from IBM show that banks and their customers are particularly disconnected when it comes to their views on customer service, mobile experiences and personalization. IBM found that 62% of banking executives around the world say they deliver excellent customer service, but only 35% of customers agree. Just 30% of customers believe their bank provides personalized service, compared with 45% of bankers who believe they do this.

Because it doesn't rely on fees for revenue —it profits off interest margin and interchange fees— SIMPLE doesn't necessarily care if a potential customer has a history of overdrafts or bounced checks, which means it can acquire customers that traditional banks may have declined. Its user experience replicates the same things people are used to doing on other apps, including taking photos and associating them with transactions, adding memos talking about who you were with or what you were doing and adding hashtags to expenses to automatically categorize them.

Simple tries to be user-friendly the old-fashioned way, too: Its employees send handwritten thank-you notes and original drawings to customers, stuffing the notes into envelopes along with colorful stickers and temporary tattoos. A recent one reads, "Hey Jonathan, I just wanted to send you a lil' 'Welcome to Simple' swag ... we're so excited to have you as a customer!”

Its business model has gained attention from larger financial institutions. In 2014, Simple, which has had 285 employees, was acquired by BBVA for $117 million. In a 2015 ranking of best online banks by MyBankTracker.com, Simple came in third, behind Discover and Ally.

The digital transformation of the finance industry is keeping momentum in its search for relevance using personalization, some times in the context of greeks and its original meaning of "person", in other as if employees at banks were acting in a theater play. There are some other opportunities where personalization is a matter of faith, as it was happening with the early Christians, it was written in the book but nobody really cares. The SIMPLE approach bring some new hope, to have banks that engage with people in its own terms, as part of their daily lives and ready to help them achieve their dreams. Who knows who else have something to say.