Ghulam Haidar Rasooli, Chief Financial Officer at Afghanistan based Ghazanfar Bank, reveals the impact of personalization and future roadmap:
Smriti Pandey: In today’s scenario, how does the return on investment (ROI) on personalization compare with the cost of personalization at Ghazanfar Bank: 1. ROI rising faster than cost 2. ROI rising slower than cost 3. ROI and cost rising equally.
Ghulam Haidar Rasooli: At Ghazanfar Bank, the return on investment (ROI) on personalization is rising faster than the cost. As we continue to invest in personalized banking services and products, we are observing a stronger connection with our customers, leading to higher retention rates, increased cross-selling opportunities, and enhanced customer satisfaction. These outcomes have contributed significantly to our ROI, outpacing the incremental costs associated with developing and implementing personalization strategies. Our commitment to leveraging data analytics, customer feedback, and market insights has enabled us to fine-tune our offerings and deliver tailored experiences that resonate with our diverse customer base, particularly in the dynamic Afghan market. This focus on personalization is proving to be a key driver of our financial performance, justifying the investment as ROI continues to outstrip costs.
Give one or two examples of intelligent personalization that your organization has done recently.
At Ghazanfar Bank, we have recently implemented several intelligent personalization initiatives aimed at enhancing customer experience and engagement.
1. Personalized Financial Products: We have introduced tailored loan packages and investment products based on customers’ financial profiles, transaction histories, and behavioral data. For instance, by analyzing customer spending patterns and financial goals, we have been able to offer personalized loan terms and investment options that align with their specific needs. This approach has not only improved customer satisfaction but also increased our product uptake and cross-selling efficiency.
2. Customized Digital Banking Experience: Our digital banking platform now features personalized dashboards and alerts. Customers can receive real-time notifications about account activity, tailored financial advice, and customized offers based on their transaction history and preferences. This level of personalization has made our digital banking services more user-centric and has significantly boosted user engagement.
These intelligent personalization efforts are part of our broader strategy to provide value-added services that resonate with our customers’ unique needs, thereby fostering loyalty and driving growth.
Which customer segments, products, and geographies are seeing the highest ROI on personalization in your organization?
At Ghazanfar Bank, we have identified specific customer segments, products, and geographic areas where personalization efforts yield the highest return on investment (ROI):
Customer Segments: Personalized banking services and wealth management solutions tailored for HNWIs have generated substantial ROI. By offering bespoke investment advice, exclusive products, and personalized relationship management, we have deepened our relationships with this segment, leading to higher deposit volumes and increased cross-selling of premium financial products. Young professionals (YP) segment has responded positively to personalized digital banking experiences, including tailored savings plans, automated financial advice, and customized loan products. The ROI from this group is particularly strong in terms of long-term customer loyalty and engagement with our digital channels.
Products: Personalized loan offerings, such as home loans and personal loans with terms and conditions tailored to individual customer profiles, have seen a high ROI. These products not only meet the specific needs of our customers but also increase loan approval rates and customer satisfaction. Investment products tailored to individual risk profiles and financial goals have also shown strong ROI, particularly among affluent and high-net-worth customers who seek personalized financial advice and portfolio management.
Geographies: Our personalization efforts have yielded the highest ROI in major urban centers such as Kabul and Herat, where the customer base is more diverse and digitally engaged. The demand for personalized financial services is particularly strong in these regions, driven by a growing middle class and an increasing number of businesses and professionals seeking tailored banking solutions. For our international clients, particularly those in the Middle East and Central Asia, personalized banking services such as foreign exchange solutions, cross-border transactions, and tailored investment products have delivered significant ROI. These clients appreciate the customized approach that aligns with their specific financial needs and cultural preferences.
Which cost elements are growing the fastest, and which ones are growing the slowest at your organization?
At Ghazanfar Bank, the growth of cost elements varies significantly depending on the area of investment and operational focus.
Fastest Growing Cost Elements are technology and regulatory compliance while slowest are branch operations and general administration. Investments in technology, particularly in digital banking platforms, cybersecurity, and data analytics, are experiencing the fastest growth. As we continue to enhance our digital offerings and implement advanced analytics for personalized services, these costs are increasing significantly. This growth is driven by the need to stay competitive in an increasingly digital marketplace and to meet customer demand for seamless online and mobile banking experiences.
Costs associated with regulatory compliance are also rising rapidly. This includes expenses related to AML, KYC and other regulatory mandates that require continuous updates to our systems and processes. The dynamic regulatory environment in Afghanistan and the global financial landscape necessitates ongoing investment in compliance.
While there is still some growth in costs related to branch operations, these are among the slowest-growing expenses. This is partly due to the shift towards digital banking, which has reduced the need for extensive physical branch networks and associated operational costs. The strategic focus on digital transformation is helping to contain growth in these traditional cost areas.
Routine administrative costs, including office supplies, utilities, and routine maintenance, are growing at a slower rate compared to other cost elements. These expenses are more predictable and are being managed carefully to optimize operational efficiency and reduce overheads.
By closely monitoring these cost elements, Ghazanfar Bank ensures that investments are aligned with strategic priorities while maintaining operational efficiency and profitability.
How does Generative AI-based personalization compare with traditional personalization?
There are 3 features of generative AI-based personalization:
1. Dynamic & Scalable: Generative AI enables more dynamic and scalable personalization by creating content, offers, and recommendations in real-time based on user behavior, preferences, and historical data. It can analyze vast amounts of data and generate personalized content that is highly specific to each individual customer. This approach is particularly effective in rapidly changing environments where customer preferences evolve quickly.
2. Predictive & Proactive: Generative AI can anticipate customer needs by analyzing patterns and predicting future behaviors. This allows organizations to proactively offer personalized experiences before the customer even expresses a need, creating a more seamless and intuitive interaction.
3. Automated & Efficient: With generative AI, much of the personalization process can be automated, reducing the need for manual intervention. This increases efficiency and allows businesses to deliver personalized experiences at scale, reaching a larger audience without significantly increasing costs.
There are 3 features of traditional personalization:
1. Rule-based & Segmented: Traditional personalization relies on predefined rules and segments to tailor experiences. While effective, it is generally less flexible and dynamic compared to AI-based methods. Personalization is often based on broader customer segments rather than individual behaviors, which can result in less precise targeting.
2. Reactive & Manual: Traditional approaches often react to customer actions or preferences that have already been expressed, rather than anticipating future needs. The process is also more manual, requiring significant effort from marketing and analytics teams to define segments and create personalized content.
3. Limited Scale: While traditional personalization can be effective within certain customer segments, it is less scalable. The ability to offer deeply personalized experiences to each individual customer is often limited by the manual effort required.
What do you expect in the future for both these approaches to personalization?
Generative AI: As generative AI technologies continue to advance, we can expect them to play an increasingly central role in personalization. The ability to create highly tailored, real-time experiences at scale will become a competitive advantage for organizations. In the future, generative AI is likely to dominate personalization strategies, with further enhancements in predictive analytics, natural language processing, and customer interaction models.
Traditional Personalization: While traditional personalization methods will continue to be used, especially in environments where data privacy and manual control are paramount, they will likely be augmented by AI capabilities. Traditional methods may evolve to focus on areas where human intuition and expertise are required, while generative AI handles the bulk of personalization tasks.
Overall, the future of personalization will likely involve a hybrid approach, where AI-driven techniques are combined with traditional methods to provide a more comprehensive and effective customer experience.
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