July 7, 2021
Personalization and Data Privacy: the new trends of fintech to enhance customer experience
The key is not just about the needs, but it is also about trust!
Rapid developments in digital transformation put pressure on businesses to constantly update and adapt to new technology. While shifting towards online platforms is already a huge effort, further steps must be taken as service providers are facing immense disruptions, driven by their customers, in every aspect of their business.
Personalizing customers’ need should be more efficient
A variety of advertising tools are available to help businesses reach their potential customers, and for users to experience quick and easy access in purchasing what they need. As good as it seems on paper, in practice things do not go so well. Although the filters and algorithms of these tools provide some assistance in personalizing marketing, they could only filter basic information such as demographics, but could not classify more advanced categories. Thus, it brings inconvenience to both parties.
On the one hand, customers are being disturbed with absurd ads popping up on their screen when swiping their feed, or excessive deals being offered as they are trying to participate in a transaction. They are being exposed to too many options, while not all of those options can meet their needs, interests, or capability precisely. This abundance backfires in two possible ways: ignorance or the paradox of choice. Customers might pursue the tendency to disregard all kinds of ads and recommendations so that they could avoid any disturbance on online platforms. The other potential outcome is “The paradox of choice”, a well-known psychological theory by Barry Schawrtz (2007), that indicates the unpleasant experience in decision making when having too many options to choose from. Both ways of behavior lead to disincentives for customers to onboard any services suggested on the site.
While businesses can reach a larger pool of audiences by switching to online transactions, they are still facing the problem of personalizing needs efficiently. Applying technology to precise target the customer segment could escalate their rate of conversions and enhance their customer experience.
Time is also a crucial key
Does this customer have this demand and capability to participate in such a transaction at this particular point in time?
While most businesses are mainly focusing on the former challenge, approaching customers on time is also a vital complementary in enhancing customer experience. While online offers are created to increase customer experience, bombarding advertising that appears at any time defeats this main purpose. Customers may receive ads that relate to their interests and yet, it is not what they want at the moment. By repetitively seeing information that they do not need right away, customers tend to neglect these disturbances, which is why using ad-blockers is one common example of how they negatively react towards advertising.
To support businesses in tackling such issues, the concept of embedded finance arises from robust digital transformation. Since embedded finance is a branch of fintech that financial services are integrated into other online platforms, appropriate offers with content tailored to match with customer’s demand and capability as well as appear only when customer need. This optimizes the personalization of customer experience and supports businesses to efficiently convert new clients while working remotely.
Furthermore, integrated services provide customers opportunities to participate in cross-sectoral transactions without going through different intermediates to make their purchases like the traditional ways. Hence, this experience not only serves customers at the right time but also shortens the customer journey.
A step towards the future of data security and data privacy
Although Vietnam is still new to the ideas of “data privacy” and “data security,” both of these terms are predicted to become more widespread in the next couple of years as the pace of digitalization is getting faster than ever. Hence, businesses should be aware and get ready before the rising trend as a part of improving customer experiences.
The benefits of digitizing our daily activities are undeniable. Nonetheless, potential threats underneath these benefits could make customers become victims in many fraudulent transactions. Such risks arise from the great possibility of private information leakage while users participate in online activities. While some people might think the results of data leakage would only appear in rare serious cases, the consequences are experienced by the majority in many different forms, namely, telemarketing calls from a company or services that one might have never heard before. An increase of data leaking incidents in the past few years does also raise doubts amongst users when trying new products and services. Therefore, ensuring data security could also help improve customer experience by gaining their trust.
The need of users in governing and using their own data is interconnected with data security. Customers would want to ensure that their data is used for a precise purpose and benefits them the most. If businesses could provide customers with a more active engagement and a sense of ownership, customer experience can be significantly improved. In order to both meet the rising demand for both data privacy and data security as well as earn the trust from customers, businesses will need to keep up by advancing their technology.
Even though many companies have taken a major step in transitioning their services to online platforms, the robust digital world requires them to make more efforts to stay ahead of the game. While personalizing experiences might be a great gateway for businesses to reach customers remotely, both customer’s needs and the right timing should be acquired in order to optimize its efficiency. Furthermore, businesses may also want to be aware of the rising trends of technology, in which data privacy is one of the distinguished movements.
 https://www.ted.com/talks/barry_schwartz_the_paradox_of_choice/up-next?language=en https://www.mckinsey.com/business-functions/mckinsey-digital/our-insights/ecosystem-2-point-0-climbing-to-the-next-level