Personalization is increasingly recognized as a pivotal strategy in marketing, essential for enhancing customer experiences. Yet, there's significant room for improvement.

Only 15% of senior marketing leaders say their companies are effectively implementing personalization tactics, according to a McKinsey study. At the same time, Gartner reports a decline in marketing budgets as a percentage of total revenue—from 9.1% in 2023 to 7.7% in 2024—signaling a shift to an "era of less."

That juxtaposition highlights a clear need for thoughtful, strategic personalization in digital marketing.

Some 74% of digital marketing leaders are ramping up their investment in personalization, according to Glassbox's survey of 600 US-based digital professionals and leaders in marketing, product development, customer experience (CX), and user experience (UX).

As the CMO of Glassbox, working with major players in the highly regulated financial services sector, I understand the critical balance required between personalization and data security. In this piece, I'll share actionable tips for CMOs to apply AI-driven insights effectively, ensuring compliance and maintaining customer trust in today's dynamic digital landscape.

Understanding the Data Landscape

Strong data governance is crucial for ensuring data integrity, security, and compliance with stringent regulations, such as GDPR and CCPA.

As regulations tighten, the selection of platforms that are built and follow governance, risk, and compliance (GRC) principles becomes paramount. Those laws mandate rigorous handling of personal data, prioritizing security, user consent, and transparency. Opting for products designed with these considerations can simplify compliance efforts.

For instance, certain platforms offer functionalities to block session recordings from specific IP addresses, such as those in the EU or California, preventing data collection from areas where it's not allowed. Such a proactive approach not only safeguards against unauthorized data use but also fortifies compliance with privacy laws.

Because of the evolving regulatory landscape, it's advisable for CMOs to periodically audit their data management practices, pinpointing both strengths and areas for improvement.

Glassbox's research indicates that 57% of AI users making use of customer data are worried about adhering to data privacy laws, underscoring the importance of audits. Understanding how to use AI to derive data insights is invaluable, especially for financial services firms aiming to deepen their understanding of customer preferences while managing data responsibly. Notably, our study found, 49% of AI users depend on customer data for AI-driven insights, which significantly enhances personalization.

AI technologies, particularly advanced machine-learning and generative AI, can expedite the extraction of valuable insights from extensive datasets. By using these tools, businesses can concentrate on the most impactful insights and actions, elevating personalization strategies while ensuring compliance and fostering customer trust.

Implementing Personalization Tactics

In the competitive realm of financial services, personalized marketing is not just beneficial—it's transformative. McKinsey's study highlights that firms adept at personalization can boost revenue 5-15%.

Through data analytics, financial institutions can segment customers based on nuanced financial behaviors and needs, enabling precisely targeted messaging. Imagine delivering personalized offers on savings accounts or investment products tailored to individual transaction histories.

Customers having more options than ever, so the pressure is on to meet (and exceed) their evolving expectations. Failing to deliver tailored messaging might push customers to seek alternatives for their banking, investment, or insurance needs, PwC highlights: Its research also indicates that 83% of CMOs are planning to revamp their brand messaging post-election to better reflect shifting societal values, emphasizing the critical need for adaptability in our communications to maintain customer loyalty.

Envision a scenario in which tech-savvy customers use chatbots or help pages, reducing reliance on call centers, allowing banks to reallocate live support to those preferring human interaction or requiring assistance with more intricate issues. Such strategic deployment of resources, underpinned by using customer personas and journey mapping, not only respects privacy and consent but also maximizes value delivery.

Our research found that 39% of digital professionals cite low engagement due to subpar personalization, emphasizing the urgency for enhanced strategies.

• Consider Citizens Bank, which increased customer satisfaction by focusing on first-call resolution (FCR). By diligently mapping customer journeys, businesses can identify key touchpoints and preferences, crafting tailored experiences that deeply resonate with individual customer personas.
• Consider also Wells Fargo, which developed an app to help customers better manage recurring payments by providing a personalized financial management tool.
• Similarly, An Post Insurance increased conversions 6% by simply clarifying a confusing question in its online form.

Those cases exemplify how effective customer journey mapping can illuminate and address key pain points, driving significant improvements in customer experience.

Building Customer Trust Through Transparency

Transparency in data practices is foundational to building trust in financial services. How we collect, use, and protect customer data is integral to fostering that trust.

One-third of customers trust brands that clearly articulate their data practices in simple, straightforward language, Deloitte research indicates; moreover, 48% of customers remain loyal to brands that consistently deliver on their promises.

As someone who has seen both effective and suboptimal communication firsthand, I strongly advise fellow CMOs to be unequivocally clear about how customer data is used, how privacy is safeguarded, and how personalization is designed to enhance the customer experience.

Our studies found that 77% of AI users believe more needs to be done to address AI-related data privacy concerns, especially in sensitive sectors. As financial services deepen their understanding of client behaviors and needs—ranging from account types to transaction patterns—they can deliver relevant communication at the right time, whether it's for a home loan, a budgeting tool, or other financial products.

Engaging customers in discussions about data privacy and soliciting their feedback is also crucial. For instance, inviting customer input on privacy policies and personalization practices can foster collaboration and trust. Establishing channels for such feedback helps refine policies and strengthens loyalty, as customers appreciate having a voice in decisions that impact their data.

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As the digital landscape continues to evolve, adaptability is key to meeting changing customer expectations and ensuring regulatory compliance.

Our research finds that 35% of digital professionals view compliance issues as barriers to adopting AI-driven insights, underscoring the vitality of addressing these challenges to intelligently leverage personalization while protecting privacy.

By proactively auditing data practices, implementing responsible personalization strategies, and fostering transparency, financial services can cultivate robust customer trust. Such measures are vital for building enduring customer relationships and maintaining a competitive edge in the digital marketplace.

For CMOs in financial services, striking the right balance between personalization and data security is essential.

More Resources on Personalization and Data

Why Now Is the Time to Improve How Marketers Use Data for Personalization

Hard Truths About B2B Personalization, Its Effectiveness, and Its Future

Personalization: The Secret Weapon B2B Companies Are Not Using

The Customer Data Conundrum: How CX Leaders Can Optimize Both Privacy and Personalization