Made for You: Personalization in Digital Banking      

*This article was published in Bank Director magazine’s first quarter 2025 issue.

Today’s account holders expect more than just convenience: They want meaningful, unique interactions that align with their financial goals. For community banks, the challenge lies in offering this level of personalization while preserving the local, relationship-driven service that sets them apart. By utilizing digital banking platforms, artificial intelligence and seamless integrations, technology providers can help their bank customers meet and exceed expectations, creating tailored experiences that strengthen relationships and foster long-term loyalty.

For banks, understanding what drives account holders on a deeper level is essential for sustainable growth. Local financial institutions can tap into data-driven insights to shape products and services to drive deposit growth, grow relationships and offer custom-built solutions. Whether it’s recommending loan options or creating savings plans based on unique spending behaviors, the ability to identify and engage account holders throughout their financial journeys and anticipate their future behaviors gives these institutions a competitive edge.

Personalizing the Relationship
Personalization remains key for financial institutions to engage, retain and expand their account holder base. McKinsey & Co. reports that 71% of consumers expect individualized interactions, and 76% become frustrated when businesses fail to deliver. Many account holders, especially younger generations like Generation Z and millennials, would consider changing financial providers if they believed a better experience was available elsewhere. This growing demand is driving financial institutions to adjust in order to stay competitive. 

As the expectation for personalization persists, how can community banks harness their customer insights to stay ahead? More importantly, what steps should they take today to remain competitive tomorrow?

The Answer Lies With AI
AI could reshape how financial institutions interact with account holders by providing instant, specialized assistance and real-time insights. Banks should think about how they can incorporate AI technologies and tools to prepare for the future. Digital banking platforms utilizing AI-powered tools, like chatbots, can now offer individualized financial advice by analyzing user behavior, creating more relevant and meaningful engagement.

AI can now recommend specific products and services to an account holder who frequently checks their savings or offer financial strategies to help meet that individual’s goals. Customized, tailored alerts and financial health reports keep individuals connected with timely touchpoints. AI offers institutions a powerful opportunity to embrace digital transformation, enabling them to deliver more memorable user experiences. Banks can use AI-driven tools to tap into their data and generate hyper-personalized experiences that address each customer’s needs and preferences. Seamless and intuitive experiences enhance customer engagement and loyalty, allowing institutions to keep up with evolving digital expectations.

Predictive analytics, powered by advanced AI modeling, can help financial institutions analyze data patterns and forecast customers’ future behaviors so banks can anticipate needs with greater precision. Institutions can deliver targeted product recommendations, automate onboarding processes and grow relationships more efficiently. Leveraging these AI-driven insights empowers financial institutions to provide proactive solutions that elevate the user experience and lead to sustainable, long-term growth.

Despite these advancements, a 2024 report from the ABA Banking Journal found that only 17% of institutions currently use AI marketing tools. However, greater adoption of AI-driven tools and technology means more banks will unlock these untapped opportunities, potentially attracting customers at institutions that are slower to adjust.

Data-driven personalization is more than a powerful growth engine; it’s a transformative approach to deepening customer relationships and increasing loyalty in this new era of digitization. Institutions can create seamless, customized experiences by leveraging digital channels and platforms to tailor interactions with individual users, driving growth and engagement while differentiating themselves in a crowded marketplace.

The focus for financial providers remains on delivering customized digital experiences that are intuitive, innovative and refined. AI-powered insights, targeted marketing and engagement tools allow community institutions to offer the community-focused service they’re known for while meeting the digital needs of modern consumers.

With the right tools and by embracing new technologies, community banks can deliver tailored experiences that distinguish them from their competition while deepening relationships with their customers and communities.