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The era of personalisation

We have seen gamification, we have seen digitisation. It is not very often that we see the emergence of a phenomenon that permeates all industry verticals. It is in this light that we must see the emergence of another common phenomenon, popularly referred to as personalisation. Traces of personalisation have been existent in some areas of business, but not in as big a way as it is today.

The phenomenon of personalisation can be explained by studying it across four perspectives: Technology, consumer, business and human psychology. On the technology side, we are witnessing how new tools are facilitating digital imagination of businesses, and also a corresponding decrease in the cost of technologies. On the consumer side, we are seeing the rise of an ecosystem that is putting empowerment in the hands of the consumers. From a business perspective, personalisation is being driven by the need to increase customer stickiness, which can lead to customer loyalty and a greater wallet share. There is also a fourth angle: human psychology. Personalisation appeals to the intrinsic human need to feel engaged which is achieved when they are involved in the creation of products and services.

If I were to ask you to recollect the times when you had to take medicines, you might, in all probability, also recall instances when the same medicine had very different results on different people. The reason is that each of us is biologically different. This is where personalisation fits in in life sciences and we see a new field of medicine emerging called personalised medication. Life sciences companies are trying to formulate molecules by studying the genetic make-up of individuals. Today a healthy individual can take genetic tests that can help them identify the diseases they are susceptible to, and take preventative action accordingly.

With the proliferation of digital, social and mobile, there is a growing trend among consumers to look for personalised wellness information. This is not limited to only fitness pros, but also to people who are suffering from long-term diseases like diabetes.

In the same vein, personalised recommendations today are part of e-commerce, and stand-out e-tailers such as Amazon, Flipkart and Snapdeal are at it relentlessly. With the increasing amount of data at the digital retailers’ fingertips, e-commerce is about to get even more personalised. Research shows people are more invested in a platform that knows their preferences. This is also creating a new kind of marketplace that can be explained by the long tail theory, which means that products in low demand or with low sales volume can collectively rival or exceed the market share of the best sellers (but only if the store or distribution channel is large enough).

Coming to finance, a simple example of personalisation in financial services is ICICI Bank’s i-wish service. The first step in personalisation starts with the customer creating a goal. For example, a youngster might want to purchase a bike, so he creates and names the goal as My First Bike. Next the tool gives the ability to customise the tenure and amount of the EMI based on the customer’s need. ICICI has also built the mechanism for sharing this goal on Facebook, which may help the youngster get some contribution from his family and immediate friends.

Now come to another big shift: telematics-based auto insurance, which is enabling insurance personalisation. Here, a driver’s behaviour is monitored directly while she is driving and this information is transmitted to an insurance company. By using this information the insurance company assesses the risk profile of that driver based on her handling of the car, like the force with which she applies the brakes, how smoothly she drives etc. Based on the driver’s risk profile, the premiums can be personalised. A driver who drives less responsibly will be charged a higher premium while one who drives cautiously pays a lower premium.

Finally, personalisation will change the rules of every game. Businesses will have to come together in a cohesive manner to address the many needs of a single customer. Since the same customer will consume different products/services from different industries at different times, industries need to look at one customer through a single lens. The same customer who opens a banking account, will also most probably take an insurance service someday. She will also be using a mobile phone service, and she will also be taking medication when she falls ill. So businesses should look at the unique needs of a single customer through a unified approach to understand her peculiar needs. Next, businesses will be looking to learn from her past behaviour and intelligently predict future behaviour.

To address the customer’s intrinsic human psychology, businesses will also be engaging the customer in product and services creation because people generally feel more involved and see more value in products/services that they themselves have helped create. The individual needs of the same customer also changes from time to time. To address the issue of change, industries need to be contextual, where the whole approach is adaptive to the customer’s context. The proliferation of digital and connected devices means that customers will be entering and exiting multiple channels at different points in time. So business have to orchestrate an omni-channel user experience. Last, but definitely not the least, even marketing will have to change from mass-value messaging to personalised-value messaging.

The role of IT in such a business environment will also become more profound. Businesses will look to IT to address the unique needs of consumers and help them stay relevant.


Anup Chakraborty
Systems Analyst, Tata Consultancy Services

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