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By Suman Bhattacharyya
Financial institutions have spent years looking for ways to build stronger, longer-lasting customer relationships. Personalization has become a central part of that strategy, inspired in part by the tailored experiences created by online retailers.
Customers appear willing to engage with personalized banking services. According to Accenture’s 2025 global banking study, 72% of consumers said personalization affects their choice of bank. However, only 3% said they had used the personalized tools offered by their primary financial institution.
The gap highlights a major opportunity for banks and credit unions. Personalization must go beyond inserting a customer’s name into an email or presenting a targeted product. The most advanced financial institutions are using data to anticipate what customers may need next and guide them toward useful actions.
Key insight: Amy Krasikov, vice president of digital experience at Raiz Federal Credit Union, said personalization has shifted from broad customer segments to a deeper understanding of an individual’s goals, circumstances and likely needs.
Today, personalization is becoming an enterprise-wide strategy that touches the entire customer journey. It requires financial institutions to connect information from multiple systems, understand customer behavior and tailor products, services and interactions accordingly. At the same time, banks must carefully balance relevance with privacy and avoid creating an intrusive experience.
Personalization Must Extend Beyond Marketing
Personalization is often associated with delivering the right product to the right customer. However, Neil Stanley, CEO and founder of deposit strategy consulting firm The CorePoint, argues that the product itself should also be customized.
Reaching a customer with a timely message is not enough if the underlying offering is identical to what every other customer receives. In that case, the institution may simply be practicing targeted marketing rather than true personalization.
Certificates of deposit provide one example. Instead of offering only standardized maturity periods, a financial institution could ask when a customer expects to need the funds and create a certificate that matures around that date.
This approach could benefit both parties. The customer receives a product designed around a personal financial timeline, while the institution gains a way to retain deposits without necessarily paying a higher interest rate.
Personalization also involves the way customers interact with a bank or credit union. Stephen Bohanon, founder and chief strategy officer at digital banking technology provider Alkami, says institutions can tailor digital experiences based on a customer’s account activity, financial position and recent behavior.
Using Customer Data to Create More Relevant Experiences
Personalized banking can influence what customers see when they log in, how they navigate a digital platform and which features receive priority. A business customer, for example, might see cash flow information, payroll details and upcoming payment obligations prominently displayed on the home screen.
Other customers may benefit from a different digital experience. Someone focused on reducing debt could receive a clearer view of loan balances, upcoming payments and repayment progress, while a customer building savings could see automated transfer options and progress toward a financial goal.
Personalization can also improve the relevance of product offers. Commonwealth Credit Union in Frankfort, Kentucky, uses technology from Movemint to match members with services that may fit their existing relationships.
A member with a first mortgage but no home equity loan could receive information about home equity borrowing. A member with an older auto loan might be shown a refinancing opportunity. The credit union uses account information, relationship data and credit details to determine which offers may be appropriate, according to Jaynel Christensen, executive vice president at Commonwealth Credit Union.
The process can continue beyond the initial recommendation. If a member accepts an offer, the platform can provide the documents and next steps needed to complete the transaction.
Timing is critical. A relevant recommendation that arrives too late may have little value. Christensen noted that if a financial institution does not present an appropriate offer when a customer needs it, another provider may do so first.
Closing the Data Activation Gap
Banks and credit unions hold extensive information about customer accounts, transactions, income patterns and financial activity. Yet this data is frequently spread across core systems, loan platforms, marketing tools and third-party applications.
That fragmentation makes it difficult for institutions to create timely and useful recommendations. Gabrielle Champine, who leads growth and client success at Movemint, describes the challenge as the “activation gap”: financial institutions have valuable data but struggle to turn it into practical customer experiences.
David Benavides, head of digital user experience design and member experience at Alliant Credit Union, recommends that institutions avoid trying to fix every data issue at once.
Instead, a bank or credit union can begin with a specific customer problem. Leaders can then identify the data required to solve that problem, map the customer journey and determine which internal systems or vendors contain the necessary information.
Recommended approach:
- Choose one clear customer pain point.
- Define the desired outcome for the customer.
- Identify the data needed to support that outcome.
- Map where the information currently resides.
- Connect only the systems required for the initial use case.
- Measure whether the experience improves customer engagement or financial results.
This focused method can help financial institutions demonstrate value more quickly while building the foundation for broader data integration.
Moving from Product Recommendations to the Next Best Action
The next stage of personalization involves recommending actions rather than simply displaying products. A customer exploring mortgage information may not be ready to apply for a loan. Based on the customer’s financial profile, the more useful recommendation could involve building savings, reducing debt or improving credit readiness.
Benavides said a bank should not stop at showing mortgage content when it knows the customer may need to save more for a down payment. A better experience would explain how the customer can prepare financially for homeownership and provide practical steps to reach that goal.
This shift turns personalization into financial guidance. Rather than asking only, “What product might this customer buy?” the institution can ask, “What should this customer do next to improve their financial position?”
Artificial intelligence can support this process by identifying patterns in account activity and predicting likely needs. Huntington Bank’s Money Scout tool, which operates within its digital banking platform, reviews historical cash flow and spending behavior to forecast future activity and recommend possible actions.
For example, the tool may detect excess cash in a checking account and suggest transferring some of it into savings. Vijay Konduru, head of business innovation and AI products at Huntington, said the system currently combines rules-based models with traditional artificial intelligence.
Generative AI has not yet been added to the tool, but it could eventually help customers understand their options through more natural, conversational interactions. As digital banking develops, financial guidance may become less dependent on fixed products and static menus.
Instead, customers may engage with banking platforms through conversations that adapt to their goals, questions and changing financial circumstances.
Using AI and Customer Data Responsibly
Greater access to customer information does not automatically justify using every available data source. Publicly visible information, particularly social media activity, can create discomfort when financial institutions use it to personalize offers.
Krasikov said Raiz Federal Credit Union has chosen not to incorporate publicly posted social media information into its personalization efforts because doing so could create a sense of intrusion.
Trust remains essential. Customers want relevant experiences, but they also expect financial institutions to respect boundaries, explain how information is used and provide meaningful control over data sharing and communications.
Privacy considerations will become even more important as artificial intelligence becomes more deeply embedded in banking. Institutions should establish clear governance policies covering data quality, consent, security, model oversight and the fair treatment of customers.
The Future of Banking Personalization
Personalization is evolving from targeted advertising into a broader operating model that can shape products, service delivery, digital design and financial advice.
The most effective banks and credit unions will not simply identify customers who may be interested in a particular product. They will use data and intelligence to understand the customer’s situation, identify the next helpful step and deliver that guidance at the right moment.
At the same time, customers are becoming more informed. Many now use artificial intelligence tools, comparison websites and online research to evaluate financial products before contacting a bank.
Neil Stanley said financial institutions need enough flexibility and frontline insight to respond to knowledgeable customers rather than merely targeting them with greater precision.
The winning strategy will combine accurate data, thoughtful technology, human judgment and strong privacy practices. When personalization helps customers make better financial decisions without crossing into intrusion, it can become a powerful foundation for trust and long-term loyalty.
Source: thefinancialbrand.com