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With several competitive players in the background, banks need to make a move towards enhanced customer experience with the help of recommendation engines.
FREMONT, CA: Today's banking environment is extremely volatile, with several non-financial entities coming up with payment services. Hence is time for banks to get involved in a more personalized relationship with customers. Banking and financial services organizations are looking seriously at machine learning and information retrieval solutions to leverage the data at their disposal and provide tailored services and customized experiences to their customers. One of the technologies, which can support this attempt, is the recommendation engine. Recommendation systems are now an integral part of many of today's business applications, proving its effectiveness in improving the user experience and sales increase.
Recommendation systems have the potential to change the way banks communicate with customers and derive maximum value based on the information they can gather on each customer's preferences and purchases. A recommendation engine will continuously calibrate to the preferences of the user, and this makes financial services and products become more familiar as time fleets. These platforms depend on the self-learning ability of machine learning algorithms. With sufficient customer data, the process of deriving insights is made easier.
A forecast model of the customers' profitability made with the help of the recommendation engine allows the segmentation of customers into different classes. Based on these, banks can offer loyalty programs and products which help in better customer retention. Segmentation also allows banks to segregate their customers accordingly and recommend low-risk products for each customer. From real-time alerts for one-time activities to analyzing spend patterns to offering financial guidance and providing timely reminders for late payments, recommendation engines enhance the level of personalization in banking. Personalization in banking can significantly improve customer engagement, satisfaction, and retention.
An effective recommendation will enable banks to develop deeper relationships with their customers. Customers, meanwhile, can get the financial products and services they want. In a nutshell, the recommendation engine holds the key to enhanced customer engagement and maximizing revenues for the banking industry in an intensely competitive and disruptive environment.