Forbes: 'Retail' Shows the Path of Personalization to Banking

December 28, 2022

All the innovations in terms of personalization in which 'retail' has plunged will necessarily draw, in parallel, a new horizon for the financial sector.

Imagine an app, let's call it MyLifeAssistant, that integrates the technologies you use daily on your mobile, and some others to discover, and offers them to you in a unified way. It allows you to manage contacts, calendar, location, purchases, fitness, health, life in the metaverse, investments... among many other possibilities.

It communicates with the environment, whether it's a clothing store, office or favorite coffee shop, and collects the data generated by those interactions to build a personalized profile and anticipate future decisions and needs using artificial intelligence (AI).

In many cases, you will have earned coupons or discounts for future purchases for your loyalty, or simply for spending time in front of a display or on a website. It is an essential requirement that MyLifeAssitant use all that information that it continuously captures for the benefit of the user and that it works in a way, one could say, invisibly.

This is the recreation of the new generation CMS (content management system) that could be on the horizon at some point. And, according to a report published by global consultancy McKinsey , banks had better go that route if they don't want to become marble fossils in the digital age.

The prize for entities that know how to convert themselves into 'Everyday Banking' is a potential business of 20 billion dollars, but they will have to undertake a deep restructuring. Because the financial sector must be really different from the current one. It will have to incorporate (don't let the 'old guard' hear us) imaginative formulas such as banking as a service (BaaS), yes, white label products for retailers to market. The key is, as in MyLifeAssistant, invisibility and transversality between sectors.

There are many innovations in the provision of services to the end user that indicate that this is indeed the path, although the result may end up being more subtle. Especially in retail. In the last mile, the North American giant Walmart has launched the InHome Delivery Service that provides an access code to the customer's home so that the delivery person can deposit the products directly in their refrigerator, all controlled by a video surveillance system.

His forecast is to have the key to 30 million homes by 2022, and he plans to put cameras or Internet of Things devices in the fridge, so you don't even have to worry about ordering.

Walmart applies subscription payment models that allow the user to regularly receive certain products, for example, medicines. His idyll with AI gains in intensity as the available data grows: it is already capable of detecting if a user buys the best quality meat in another establishment to re-fish it at a discount. Individualized prices, correct. And more data.

Personalization is knocking at the door, and innovators have jumped right in. After years of erratic predictions, the model is getting more sophisticated. Companies like Crossing Minds offer platforms based on users' own data so that companies can quickly recommend relevant articles to them.

The US National Retail Federation (NRF) will highlight at its upcoming Big Show in New York the case of Bigthinx, an AI company that performs a 3D body scan using just two photos. Create a custom virtual avatar , a photorealistic digital replica, that can try on virtually any clothing. Big fashion brands already work with them.

What better tool for personalization than the shape of our own body? Fit:Match 's algorithms also start from that 3D virtual modeling with just two mobile photos, and aspire to become the first product recommendation engine that eliminates size charts. Lyfsize promises, with a similar tool, to reduce returns. It is not just anything: only in 2022, clothing items worth 815,000 million dollars will be returned in the North American market between the physical channel and online, of which 85,000 million will be fraudulent returns.

The vice president of the Chinese giant Shein, Donald Tang, recently highlighted in Lisbon that his move from the just in time model to on demand had allowed him to reduce unsold inventory to 2%. And voilà , among the most innovative proposals of the NRF Big Show also stands out Max Retail , a platform with patented technology that helps sell excess inventory to a global network of online and physical stores at a slight discount.

Indeed, all these innovations in terms of personalization in which retail has plunged will necessarily draw, in parallel, a new horizon for the financial sector. An indication: In September 2022, there were 274 fintech unicorns , up from just 25 in 2017, with a combined market value of more than $1 trillion

.It's also no coincidence that Microsoft recently launched a Restaurant CIO Council. According to a Forrester Research study , retail is working to enable you to pay through your conversation with chatbots and to facilitate purchases through social ecommerce , and “buy now, pay later” (BNPL) formulas are flooding the market. That new bench, turned into MyLifeAssistant, is going to be unrecognizable.

This article was originally written in Spanish; translations may not be completely accurate. Please read the original story HERE.

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