Behavioural Profiling: an emotional intelligence tool for modern advisors

In the previous article1 we introduced the concept of Behavioural Profiling, i.e. a profiling technique that puts mental, emotional and socio-cultural aspects of people at the centre of a company’s business strategy.

We explained how this type of profiling helps traditional financial world to become data-driven and to really know its customers, substantially transforming the relationship company-advisor-customer.

It is precisely the company-customer relationship that has been undergoing the greatest transformation within the wealth management world in the last ten years: today’s costumers require transparency, flexibility and personalization of the offer. This is why, both financial institutions and consultants are facing a great challenge, that is overcoming the pre-established point of view of traditional finance, which is firmly based on rationality and on the dichotomy “specialist = knowledge, client = error”, instead of putting people and their emotions at the centre of their sales strategy.

But what can help advisors during the product placement’s phase? Easy: Behavioural Profiling.


Neuroscience: the new frontier in finance

Do you like Pepsi or Coca-Cola best? That’s the question a famous neuroscientist of the Virginia Tech Carilion Research Institute, named Read Montague, asked to 67 volunteers for a neuromarketing experiment.

Do you know what they answered? Montague gave to blindfolded volunteers a taste of both drinks and noticed that when they drank, they activated brain’s areas related to taste. The majority chose Pepsi.

But when he showed them before tasting the two brands, the majority of people chose Coca-Cola. Why?

Because when they saw the two brands, volunteers automatically activated another area of their brain, the one related to feelings and sensations. The experiment then showed that those emotions and sensations, generating memories, induced people to buy, not the taste.
What about finance? The study of emotions can also provide the financial world with the right tools to analyse why people make financial choices -even irrational ones- not only “how”.

In this way, it is possible to win the trust of your customers, providing them the right solutions at the right time, through the right communication channel.


Understanding behavioural biases through the study of emotions

Behavioural finance has shown that individuals make “errors” systematically (i.e. they show “biases”) of reasoning and preferences, compared to the rationality assumption which is typical of traditional economic and financial theories, that anyway are more of a polar star, visible but unattainable for the client, than a real guide.

Today, however, neuroscience has shown that the study of human emotional aspects represents an added value both for managers and, above all, for advisors and can lead banks and insurance companies to become the guide that people need so much to manage their finances.

Emotions, in fact, are the key element on which we all base our decisions and neuroscience is the tool that can help advisors to perform in the interest of their client, that particular client with his unique biases, attitudes, cultural and social aspects.


The right solution, at the right time

Let’s make an example: Pietro, the advisor, visits Carlo, a 35-year-old architect, with his wife and three-year-old daughter. The analysis of Carlo’s data, to which Pietro has access, shows two obvious needs: a retirement plan and a health insurance. Pietro has already explained this to Carlo, but Carlo is sure that his daughter and the public pension will be enough for him in the future.

This time, however, Pietro, the advisor, has also access to other behavioural information about Carlo: these info reveal a profile with a strong tribal tendency, which in life leads him to believe that his family will always look after him. He then has a pragmatic but not too far-sighted attitude which, together with his poor financial education, makes him believe that a complementary retirement pension plan would be superfluous.

Fortunately, he shows a strong tendency to trust people on a personal basis, so that the insurance advisor, using the right levers and showing him some data on the risks his family could face in the future, convinces him to buy an insurance.

How did Pietro convince Carlo? Using factual arguments, he managed to reduce the gap between perception and reality, reshaping the selling strategy on Carlo’s peculiarities aiming at reducing his over-confidence bias. All of this thanks to the data that Pietro could easily access from his mobile device.


Behavioural Profiling at the service of distributors

Beware that Behavioural Profiling is not a mere communication trick. It has very concrete business repercussions, in all business processes and / or customization of the service, because it can significantly improve both the acquisition of data and the placement process at the end.

The most empathetic and performing consultants already understand these aspects, because they are equipped with the right soft skills.

But these aspects are not to be left exclusively to individual’s discretion. They should be managed in an organized way. It is therefore a matter of strengthening the capacities of every advisor.


An app to get to know your customer all-round

How do you get a 360° behavioural profile about your customers? Thanks to the answers to MiFID questionnaire, together with few personal data and a simple process of data enrichment, you can get to know your customer all-round and define his personal needs.

Using the Behavioural App developed by Virtual B, advisors can easily obtain clear and intuitive information directly on their mobile devices, information that offer:

  • A data-based customer segmentation;
  • a communication strategy that considers behavioural aspects of each one;
  • digital marketing campaigns with better acquisition costs and conversion rates;
  • a strengthening of the company-consultant-customer relationship;
  • a customer-care service tailored to the preferred relational habits of each client.

All in a simple and fast way, along with graphic-visual elements capable of attracting the attention of customers. Try our app now by clicking on the image below!

To find out in detail how this solution can add value to your business, request our White Paper about Behavioural Profiling by clicking on the link below.

Find out more

1 – Behavioural Profiling: going beyond traditional approaches