Personalisation the old thinking or new

Late last week, I went to an industry dinner at which the topic was Web 2.0 and financial services.

One of the interesting things about this dinner was meeting Dave Nicholson, who is a founder of Zopa (but now doing other things). Zopa is an interesting play in lots of ways, but the big question that we all have to answer yet is whether or not the underlying market for lending is going to be radically altered by this new model or not. Ebay did it for classifieds, so I suppose it is at least possible that it could happen in lending.  In any event, my question to Dave was whether or not banks and P2P should be friends. His response was that from a Zopa perspective, it didn’t matter who was on either end of the transaction – the platform is about connecting those with money to lend to those that want to borrow. Apparently, institutional sources of money aren’t out of bounds. An interesting take on things, I thought.

But, anyway, the part of the dinner that interested me just as much was the way that everyone focused on personalisation. What struck me about this was not that personalisation was seen as important, but that it was seen as the most important thing for driving online sales. The oft quoted reports of Well Fargo and their data driven personalisation was used as evidence.

In thinking about the online channel in the light of work we’re doing in this space at Lloyds TSB, I’ve begun to wonder whether if, in fact, we have the personalisation thing backwards. You see, personalisation (in the form that most bank people think about it), is about setting up a unique and individual experience that we as banks think a customer wants. We use our data to make models that may or may not approximate actual customer intention, and then change the experience as a result.

In other words, we decide what personal means for the customer.

That’s not the way the rest of the web is going. Personalisation, everywhere else, means that the customer tells the service what they want. Probably they will consult with other people in their social network before they decide what they want, and probably, those people in the social network will have far, far more influence over the experience than the service provider.

Taking that one step further, it is users themselves, everywhere else, that are deciding not only how things are personalised, but also what content should be shown in the personalised context. We can see where social finance is going when examining Mint, Wesabe and others of their ilk.

So, sitting around the table listening about “personalisation”,  I couldn’t help but wonder if we’re somehow stuck in a financial services time warp. Or at least, why the institutional part of the market is.

5 Responses to“Personalisation the old thinking or new”

  1. T2
    July 4, 2007 at 12:29 am #

    Good stuff Doctor James.
    I reckon that personalisation & the perception of great service *should* be of major importance & concern to the financial world. These days, financial consumers are driven & given incentives to conduct business away from the bank’s physical site & its people and directed to the web and (to a lesser extent) to ATMs. Not that doing so is a bad thing… but by doing so (connecting via ATMs & the internet) it does take away the face to face relationship & personalisation factors that attracts people to do business with that financial services organisation. I agree with the idea that the financial institutions should not be forcing their idea of ‘personal’ to the consumer but vice-versa. As it is the consumer that drives the face to face conversations in a financial setting (walk in, over the phone, financial adviser, etc), so should it be with the other financial services channels to market.

  2. July 4, 2007 at 2:41 pm #

    Hi James, pleasure to meet you again however briefly at our dinner that night. I think it’s a mix of the two — that personalisation done right draws from both
    – software-initiated (implicit personalisation), and
    – user-initiated (explicit personalisation).
    Amazon is the poster child of software-initiated customisation, aka ‘collaborative filtering’ aka ‘recommendation-engine driven personalisation’. All the features and items are derived entirely implicitly from the user’s actions. is another great example — working secretly in the background as you listen to music to figure out what you might like. They’re both screaming successes so I’d not want to deemphasise this aspect.
    Netvibes could, correspondingly be seen as the poster child of user-initiated customisation. Netvibes has spawned well, an entire class of web sites now called ‘start pages’. This concept is Also a great success, particularly in the intranet space.
    Both work well, for solving certain things, and I think they’re mutually supporting.
    What’s particularly fascinating in the social computing space is how it spans both too — recommendations can be based on your own past behaviour (‘the page you made’ in Amazon) while also based similar patterns with other users. User-initiated customisation at the social level is a bit more tenuous but is starting to take shape shape in the form of a kind of ‘group evolution’ — Yahoo Pipes! for instance allows cloning of pipes so you can make a better pipe. You’ve customised your experience, but it’s based on what someone else did.
    So why isn’t implicit personalisation more popular then? When the rubber hits the road, it involves some pretty tricky problems that require some great business intelligence, which is often hard in an enterprise. First base being single view of customer (SVC) of course, or least what I coin ‘incrementally better view of customer’ (‘IBVC’).
    As an aside into what’s involved for recommendation engines, check out a precis of Google New’s recommendation engine at on my personal blog at

  3. July 4, 2007 at 3:10 pm #

    Personalisation in Financial Services: should it be user-initiated or not?

    Head of Innovation at Lloyds TSB, James Gardner was one of Conchangos guests at a Financial Services

  4. July 4, 2007 at 11:22 pm #

    I think you hit the nail on the issue of personalisation. It all boils down to user freedom and choice.
    I am not entirely sure if this is a purely technological issue as the problem with institutional organisations have been more process related.
    However, given a good technological base which allows people to get information that they want, it could certainly enhance the process.

  5. July 9, 2007 at 11:21 am #

    I have to say I don’t know much about personalisation in banking IT but it has been the holy grail of the communications business for some years. What neither secor has yet experimented with to my knowledge is an ‘open source’ model based on the principles of corporate open innvoation. Why innovate/personalise “on behalf of” when you can harness the inventive power of customers and others to drive change? Looking at innovation as a kind of extreme personalisation coule be interesting?

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