Personalization is an innovative strategy which enables the bank to further differentiate from its competitors by drawing the client into increasingly deeper levels of mutually beneficial relationships. However for any personalization effort to succeed both the bank and its clients need to perceive it as being relevant and beneficial to their interests. The bank needs the clients implicit and explicit consent to use their personal data to enable them tailor the clients experience to suit s/he’s purposes as well as meet their goals. On the other hand the client needs to see its relevance and desirability as well as trust the bank to deliver what it promises. Since such decisions are based on previous experience, a major determinant of success of the personalization effort is thus a function of the client’s perception of the bank and their current relationship with it. 


Consequently in this research we have focused on understanding the underlying factors involved in the client’s relationship with the bank and how they influence the acceptance of five concrete personalization features, namely adaptive login feature, adaptable settings, emails, adaptive banners adverts and adaptive financial advice. We adopted this approach because we view personalization as a relationship marketing strategy and therefore propose that the basic underlying factors in relationship marketing would be major determinants of acceptance of personalization. We used the Commitment-Trust Theory (Morgan and Hunt, 1994) and the Theory of Planned Behaviour (Ajzen, 1985) as analytical tools to model the relationship between the basic relationship marketing constructs and the specific highlighted personalization features. We added the variable Control (data) to our models because it has been indicated in research as being important in acceptance of personalization.


We found that clients in general want more personalization. We also found that five variables namely, Control (self-efficacy), Control (data), Relationship terminations cost, Relationship benefit and Subjective norm were significant determinants of acceptance of personalization in online banking. At lower levels we found various issues which linked these variables to the acceptance of the personalized features. For instance we found that clients were more sensitive to control of content than they were to control of the interface. This clearly raises issue of data control in acceptance. Also their perception of self competence on the site determined how effectively they used it. While we found as stated earlier that clients desire more personalization, the observed level of acceptance was relatively low. This shows there is a gap between what is on offer or how it is being offered and what they really want. There is a lot of room for improvement, a lot of the clients are passively engaged because it is a necessary service which they need. The bank however needs to take them from there to a position where they are actively engaged and driving the process. 

Background to Personalization in Internet banking


Internet banking has been one of the most successful of all the traditional commercial ventures that have adopted the internet platform. The internet is taking over as a main access channel to complement branch and call centres in the banking industries’ efforts to enhance their services, improve integration with partners and interaction with their clients. The high level of internet penetration in Europe and particularly in the Netherlands has made it a very attractive channel. According to a recent report of, Ensor and van Tongeren  for Forrester Research (2005), the Netherlands has a 50% broadband penetration rate and 44% of all customers use online banking. This has created huge opportunities for the banking industry in terms of being able to reach their clients and offer new services.

The internet has proved to be a very cost effective delivery platform, because of its inherent built-in qualities. According to Centeno (2003, 6) “Banks offer Internet banking mainly to increase cost-effectiveness, increase customer reach, and retain market share.” Also according to Turban (2000) Internet banking is extremely beneficial to customers because of the savings that can accrue in the costs, time, and space it offers, its quick response to complaints, and its delivery of improved services. It is clear that the internet provides excellent new opportunities for the banking industry in terms of it being able to reduce long-term overhead costs and offer improved services.


“Estimates for banking transactions costs across delivery channels, e.g. physical branch, phone, ATM, PC-based dial-up, show that Internet transactions are the cheapest with a factor of 1-2:100 compared to physical branches, 1-2:30 compared to ATM’s and 1:2-10 compared to PC-based dial-up Internet“Centeno (2003, 6), (Hawkins & Dubravko, 2001). Banks have moved rapidly into the internet channel to exploit these advantages.

Challenges of Personalization


There are many challenges involved in implementing personalization. There are certain issues which need to be taking into consideration and resolved before personalization is implemented. In this regard Friedlein (2001) has proposed that the five following issues need to be addressed.


(1)               Legal issues such as resolving regulatory, security and privacy issues as well as maintaining data protection across multiple jurisdictions. 

(2)               Technical issues; Developing and implementing integrated real-time personalisation systems as well as keeping an accurate up to date database. (3)Personnel issues; you need skilled people who have experience in those specific areas. 

(4)               Channel issues: creating a single customer view on an enterprise-wide basis, by integrating channels.

(5)               Customer issues: few site users leap into personalization at once, they are usually cautious, trying to making up their minds as to whether they can trust the provider or not. They also need to be comfortable with the site, It also takes time to configure personalisation features and time is precious, so response is by no means swift or guaranteed. Many users can quite happily do without personalisation. Mistakes can also be made, with preferences being incorrectly inferred by the personalization engine etc. 


As has been highlighted above there are various challenges which organizations face when implementing Personalization. Each issue needs to be addressed thoroughly and in an integrated manner. We believe however that ‘Customer issues’ form the core with all the other components being built on it.