6 ways personalization in financial markets stands apart from e-commerce

Personalization in financial services and in e-commerce might sound like the same function doing the same job in different sectors, but the truth is they’re worlds apart.

Personalization in financial services lives in an open and complicated world, where providers don’t have control over the messages that get seen by their end users. 

It exists for a different reason, not to sell products that users might want or need, but to provide them with the all the information and tools they need to make the best decisions possible. 

The stakes of those decisions are higher. E-commerce doesn’t have the same risks involved that investing and trading do, neither is it as time sensitive.

Here are six differences that prove personalization in financial services stands apart from its counterpart in e-commerce.

The user journey: Orchestration vs automation

The user journey in e-commerce is entirely orchestrated and controlled. From start to finish personalization providers decide the exact content of messages seen by the end user.

In financial services, there is nowhere near that level of control over the individual message. The journey is curated, but the AI that has to pull in the messages that the market provides. These are real world messages delivered by automation to the end user based on their preferences, equipping them with the information they need, when they need it.

Inputs and weightings: Fixed factors vs evolving evaluations

When a user enters the e-commerce ecosystem the only factor changing the context of their interactions is their own behavior. People who search for the same things will get the same results.

In financial services the context and conditions of a profile and actions in use will give the inputs and weightings applied to those actions completely different meaning, and therefore different results.

For example, if two people searching Apple stock in a market downturn. One has gone long and one has shorted the stock. They would get entirely different weightings and input data resulting in a different personalization output and experience because of the context in which those actions are taken.

Regulation and compliance: Prescribing journeys vs describing and data

The role of personalization in e-commerce is to deliver products to people that they will buy. It prescribes user journeys and content to drive people to the point of a sale.  

In financial services, as per regulations, our job is to help and guide users to make better informed decisions. We’re not pushing people to make a purchase or an investment. We’re providing all the relevant information so they can make the best decision based on all the different factors at play, specific to their profile, the market, and the relationships between the two. 

Creating a personalized experience in financial services means monitoring and curating all the information coming from the market. It means cutting through the noise to reveal the opportunity and mitigate risk for every user within the compliance and legal boundaries, rather than developing stories and journeys from the imagination of the marketing team. 

External factors of influence: Closed environment vs open to influence

External factors have a far greater influence on personalization in financial services. E-commerce personalization lives within a closed environment along a journey that won’t be affected by third party actions in the same way. 

In financial services the journey needs to be able to flex to the actions of third parties. Their actions constantly shift what is most important to the end user. 

E-commerce gets to control the entire narrative throughout the user journey, making it much easier to modify intent. They can focus solely on the messages they provide and the actions they drive within their own ecosystem. The open environment of financial services has so many more factors to consider. 

If Elon Musk tweets something about one of his businesses, then users invested in any relevant businesses need to be made aware of it so they can perhaps take action accordingly. Alongside this there could be hundreds or thousands of other smaller actions that will influence what’s important to the end user. They also need digesting, ranking, and to be displayed in a way that is easily understood. That doesn’t happen in e-commerce. 

There is also the impact of opportunity on personalization. If someone is interested in tech stocks there are thousands that might be recommended, so how are decisions made on what to show the user? The AI creates an opportunity score and tells the end user about the relevant stocks that score most highly. This score is made up by a myriad of factors that the personalization provider has no control over, be it price, trend data, community data, or trading trends to name a few. 

Content scoring: Managing reviews vs analyzing behaviors

Financial services must understand a more complex world of content. They must decide what matters in that landscape, understanding how people feel about individual products and investments. 

E-commerce providers can read reviews for sentiment and average out scores provided as feedback. 

Personalization providers in financial services must understand that news moves markets, and that reviews do too. In this case reviews are made up of complex behaviors that need to be analyzed.  

They need to look at and understand the meaning behind hundreds of thousands of people interacting with a product in real time, buying and selling, and researching and commenting, with added context hiding behind all those actions and more. This then has to be broken down and analyzed to provide understanding on what matters for which users. 

E-commerce experiences vs financial services experiences: Selling vs informing

The end goal of experiences in e-commerce and financial services is entirely different. E-commerce providers take what they know about a customer and use it to map to other customers and their actions before providing a product that’s relevant. 

For financial service personalization providers it’s more complex and has a different finishing point.  

They build a profile from everything they know about an investor, their behaviors, current investments and positions, understanding how they like to research and consume information. 

That profile is then used to provide the end user with the right data and content they need at the right time to make informed decisions that will benefit them not just today but in the long run too. 

It’s not about selling the customer things they want or need; it’s about providing them with an experience that lets them get the most out of their investing and offers them all the information they need to make the right choice at any given time. 

Written by
Mark Antoine

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