The Two Biggest Ways Customer Communications Will Change in 2025

As more organizations embrace digital transformation, customers expect the convenience of modern, personalized technology that delivers seamless and efficient experiences. Whether shopping for groceries, renting a car or applying for a new credit card, consumers are quick to abandon businesses when those expectations aren’t met.

As we enter the new year, financial institutions must be aware of the impact of these changing expectations, particularly concerning customer communications. These institutions must act quickly and prioritize innovation to anticipate these new expectations or risk losing customers to more agile competitors who are meeting the demand for faster, more intuitive digital solutions.

Here, we will explore two of the ways customer communications are changing, and what organizations must do to stay ahead of the curve and keep customers happy.

Personalization Starts with Data: How Streamlined Collection Drives Better Customer Experiences

Our annual survey of customer communications preferences found that two-thirds of financial services customers are likely to abandon interacting with an institution if the way they collect information is too difficult. Streamlining this process will be critical to customer retention in the years ahead. As such, we predict a deeper focus on improving how financial institutions collect data from customers in 2025.

By gathering and analyzing relevant information, financial services institutions can provide consistent, personalized experiences across online, mobile, and in-person channels, meeting the demands of today’s consumers. However, collecting and analyzing this information can take much work in the finance sector – from integrating data from different sources to ensuring compliance with strict regulations. As a result, traditional methods such as paper or digital forms have remained the standard, which can be time-consuming, difficult to understand, and prone to errors.

Organizations can better collect consumer data and automate processes using generative AI and machine learning. While AI-powered chatbots gather information from a customer through conversations, machine learning can begin to identify patterns and customer preferences. AI can also help organizations analyze that data and provide personalized advice and quick support to reduce the stress and complexity of managing finances.

Data collection is a complex process, especially as cyber threats evolve and become more sophisticated. Financially-motivated external actors continue to target credentials and personal information, and stolen credentials have appeared in almost one-third (31%) of breaches over the past decade. For financial services institutions aiming to leverage data to improve customer experiences, upgrading from traditional forms-based processes can help significantly improve the security of data collection, providing crucial safeguards against attacks.

By improving data collection processes with AI and keeping a tight grip on that data from outside threats, organizations can individualize interactions and predict future needs creating deeper trust among customers and a more consistent, personalized service.

Tailoring Communication to Generational Preferences: Meeting Diverse Expectations

In 2025, digital communication and personalization expectations will continue to grow in financial services. However, as the customer base changes in its generational makeup, organizations mustn’t take a one-size-fits-all approach to their interactions.

As financial institutions look to meet the growing demands for personalization, they must recognize that different generations have distinct communication preferences. In fact, 74% of Gen Zers said they would likely switch services due to poor communications, compared to just over half (53%) of Boomers who said the same. Understanding these differences will be key to ensuring all customers feel valued and well-served as their needs change.

One way these generational needs differ is in preferred communication methods. While baby boomers prefer verbal or in-person interaction, almost half (47%) of Gen Z customers prefer mobile and web services, compared to only 23% who prefer verbal. Investing in online services, mobile-friendly solutions, and AI for a more personalized experience can streamline conversations and align with Gen Zers’ preference for online-based interactions.

However, institutions can’t simply abandon the older generation’s preferences for their younger customers. When it comes to clear and easy to understand communications, for example, an overwhelming majority of the Silent Generation (88%) and Baby Boomers (79%) rated this as a priority, compared to fewer than two-thirds (63%) of Gen Zers. That insight means institutions may need to modify language used for older customers to ensure they meet that need.

Balancing the diverse preferences of a multi-generational customer base will require nuance and deep understanding of those customers. Institutions need to understand the distinct communication preferences of each generation and meet those expectations to reinforce trust and strengthen relationships. That not only means investing in technological services that satisfy Gen Z’s appetite for digital engagement, but also ensuring simplicity, accuracy and maintaining traditional channels to take care of older customers.

Looking Ahead

Financial institutions need to catch up to other industries in digital transformation, having been held back by regulatory concerns and restrictions. Today’s technology has caught up with those requirements, however, and the tools are now available for financial institutions to anticipate shifts in customer behavior and adapt their strategies to foster more substantial, personalized connections with their clients.

As the generational makeup of their customer base evolves, preferences for digital communication and seamless, tech-driven experiences are reshaping the landscape. Financial institutions risk losing trust and business if they fail to adapt to these preferences and meet these high expectations.

Reference source: The Financial Brand 

Compiled by the DTSVN author group - Digital transformation solutions for the Finance and Banking industry.

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