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Essential resources for banking executives:Enter ‘Banking Reinvented’

Personalization in banking: how financial institutions can leverage data to enhance customer experiences

Find out how your bank or credit union can use a platform to better leverage data and provide personalized financial wellness for your customers or members.

by Backbase


It’s no secret that personalized services are the new norm in the financial services industry.

Personalization helps inspire confidence in banking customers. It also helps financial institutions become a critical support pillar during times of economic uncertainty — something financial institutions worldwide should be considering, given the cost-of-living crisis we are currently witnessing.

In fact, a recent Genesys banking study revealed that 72% of customer experience leaders report an increased demand for personalized services during periods of economic uncertainty.

That’s why understanding customers on a deeper level is crucial for any financial institution looking to thrive in today’s economic landscape. Personalized financial wellness is the future of banking, and to get there, banks and credit unions will need to harness the power of data aggregation.

How data aggregation enhances personalized financial wellness

Data and data aggregation are crucial components of modern financial wellness on both the business and client sides.

Financial wellness involves how well a person or entity can meet financial obligations. For a customer, financial wellness might be determined by comparing their expenses to their income. For example, a good marker of financial wellness is when someone spends less than they make.

However, as a person takes on more financial responsibilities — such as a car payment or mortgage — their financial wellness becomes more complex. Customers need the ability to easily view their accounts and assess their current needs to maintain a strong overview of their finances.

The main problem for banks and credit unions is learning how to provide customers with this overview of their accounts, especially when the institution only has a small share of that user’s wallet. In The Challenge of Customer-Centric Banking, Genesys reveals that 64% of banking professionals view internal data silos as an obstacle to providing customers with accurate and integrated overviews.

Here’s where data aggregation enters the picture.

Data aggregation takes disorganized customer data that’s spread out across multiple accounts and products and integrates it into a central dashboard. That way, customers can easily view each of their accounts and assets from a single location, while financial institutions can further leverage this data to better understand each customer’s behaviors, financial needs, and more.

As a result, these institutions can create personalized financial wellness services — such as personalized investment advice — that are tailored to the exact needs of their customers.

How technology helps financial institutions utilize data aggregation

Personalized financial services provide clients with the necessary support for their unique circumstances, while data aggregation provides banks and credit unions with the data and tech support needed to offer such services.

But how, exactly, can financial institutions harness the power of data aggregation? Let’s take a look at a few ways.

Open banking

With open banking, financial institutions can gain access to their user’s spending habits and financial data from a range of accounts, as long as the user grants them access. While open banking regulations vary from region to region, open banking APIs can be a promising way to help financial institutions aggregate data.


While only relevant to financial institutions that operate in the EU, PSD2 is an interesting directive that could give some indication of where banking is headed in the other regions of the world. Before PSD2, banking data belonged to banks, but now, it belongs to the user. This means smaller institutions can access that data, helping them upsell and cross-sell more relevant services and products.

Banking platforms

Banking platforms are designed to give financial institutions the tools, resources, and capabilities they need to digitize their services. For institutions striving to leverage data aggregation, it can help to look for a platform solution that offers open architecture that accommodates a strong range of integrations.

The key benefits of platforms that offer data-aggregation services include:

  • New value for customers: Data aggregation enables financial institutions to learn more about their clients with greater speed and accuracy. In turn, banks and credit unions can provide new products and services to clients, ones uniquely tailored to their exact needs. This personalization offers new value to both existing and potential customers, leading to greater overall customer loyalty and longevity, and ensuring that financial institutions can upsell the most useful and valuable products at the right time.
  • Optimized customer experiences: While consumers are quickly adopting an expectation for personalization, they remain interested in banking solutions that offer them a simplified, unified experience. The right platform will allow financial institutions to find and organize data from across client accounts to provide improved and cohesive insights into their financial wellness.
  • Improved business flexibility: Platform solutions that enable data aggregation give banks and credit unions the opportunity to adjust to the increasing demand for personalization in a way that is both scalable and cost-effective.

Are platform solutions the answer to data aggregation?

Data aggregation and platforms ultimately go hand-in-hand when enhancing personalized financial services.

However, unless an institution has a robust in-house IT department, building a platform capable of scalable data aggregation is incredibly difficult, especially without the proper assistance.

It’s becoming increasingly clear that banks and credit unions need reliable platform partners who provide the necessary data aggregation capabilities, if they want to adapt to the increasingly personalized market. With the right platform partner, a financial institution can not only enhance its personalized services but also gain vastly improved business insights.

Moreover, utilizing a platform solution enables financial institutions to unify data across multiple accounts and products.

On the back end, this offers greater clarity and support to an institution’s business team when managing and viewing client accounts. And on the client’s side of things, an optimized platform offers a centralized source of financial knowledge and consistent digital experiences that meet their expectations.

All things considered, platforms are a viable solution for providing customers with the tailored services needed to enhance their financial wellness. They allow banks and credit unions to leverage data to enhance the customer experience, making them a valuable tool for banks looking to future-proof their operations in 2023.

Want to offer personalized services to your customers and members? Get started with our top tips in this new ebook.