"You can have any color as long as it is black". This quote is commonly attributed to Henry Ford, the founder of Ford Motor Company and refers to the Model T car. Although it may simplify Ford's stance on color options, it highlights the limited choices available during that time.
The car introduced in 1908 was a highly successful product and played a significant role in revolutionizing the automotive industry. Ford's efficient production methods and aggressive pricing strategies led to the Model T dominating the market. However, it's important to note that the Model T's success eventually waned as consumer demands evolved and competitors introduced more advanced and customizable cars.
Personalization is notoriously on the rise, as some product trends show:
Many fashion brands now offer personalized clothing and accessories. For instance, Nike allows customers to design their own sneakers. Beauty and skincare brands are catering to individual needs based on consumers' skin type, concerns, and goals. The food and beverage industry is embracing customization to meet consumers' preferences and dietary requirements.
Personalization in Financial Services? It is increasingly about providing tailored financial outcomes, based on consumers' risk tolerance, financial goals, time horizon and even individual values.
Why is customization a key priority for financial service providers?
Customization can provide a competitive edge by offering clients personalized solutions that differentiate them from their competitors.
By tailoring products or services to their target audience, they can deliver a more personalized and engaging experience, leading to higher satisfaction and loyalty.
Customization enables them to respond to evolving trends and preferences, delivering personalized experiences that align with changing customer expectations.
Undoubtedly, customization introduces complexities, has cost implications, and creates longer product development cycles. In the past, it was about striking the right balance between customization and standardization in a way that was acceptable for clients and providers.
Recall that individualism in general is on the rise. Consumers want to express their personality, values, and beliefs through the products they buy. Therefore, the trade-off in financial services is also likely to shift to the specificity of customer needs. Providers will still have to ensure viability of the outcomes (aka performance), adhere to regulations (aka compliance), while seeking cost efficiency.
What would an assembly line designed for hyper-personalized products look like?
One would certainly consider modular assembly, standardization of sub-elements, flexible tooling, and highly data-driven production planning. In the absence of a physical product (and a proper assembly line), many of the answers for financial firms lie in digitalization and generative AI. Digipal AG specializes in using automation and AI to solve a specific challenge in finance, namely providing clear portfolio communication to end customers.
Once again, we find validation in Ford's wisdom:
“If you think you can do a thing or think you can’t do a thing, you’re right.”
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