A report from L2, a digital think tank at NYU Stern, attempts to quantify the digital competence of 17 retail banks and 10 credit card issuers, ranking each on an IQ scale.
The Financial Services Digital IQ Index scored each financial institution along four key factors: website, digital marketing, mobile and social media. Those with a combined IQ score above 140 were classified as “genius,” followed by “gifted,” “average,” and “challenged.” Those with a score below 70 were labeled “feeble.” More than two-thirds of the financial services brands were ranked as “average” or above, with 48% achieving “genius” or “gifted” status.
According to a separate study conducted by the ABA, 44% of consumers ages 18 to 54 choose online banking as their preferred channel. And yet despite financial consumers’ vote for browser-based banking, the L2 report points out that the industry allocates only 12% of its marketing budgets to online channels.
“Some brands get it, and are allocating substantial resources to digital,” says Scott Galloway, Professor of Brand Strategy at NYU Stern and author of the report.
|Bank Brand||IQ||Level of Online
The Main Website: Low-Hanging Fruit
“An analysis of brand sites across the Index suggests that many are still stuck in a 1.0 mentality,” the report says. “Most fail to provide touch points associated with a more traditional retail environment. Nearly half of sites do not incorporate live chat or offer cross- sell opportunities, both of which could garner additional share of wallet.”
While 66% of consumers say email is their preferred channel for receiving financial information, only 27% of bank brands allow email opt-in through their customer acquisition site. While the majority followed up with marketing emails, none offered emails that linked to social media or were viewable on a mobile device. There is clearly an opportunity to shift marketing dollars from mailbox to inbox.
Spending by the financial services industry for online “paid search” advertising was up 78% year over year in the first quarter of 2011, while click-through rates declined 35% and traffic to brand sites in the study remained virtually flat. 41% of banks were purchasing competitor brand terms. For popular brand names, as many as four banks bid against each other.
Social Media Wallflowers
“For an industry built on relationships and community, few bank brands have been able to translate their offline tactics to the new social ecosystem,” Galloway wrote in his report. “Many are still trying to determine how to incorporate Facebook, YouTube, and Twitter into their marketing mix.
Only 28% of financial institutions have a Facebook page for their overall brand. Instead, they like to create separate pages around episodic marketing programs and sponsorships. Because their Facebook strategy has not been anchored around brand pages, the number of “likes” in retail banking trail behind those of other industries.
The Twitter Teller
Of the 68% of banks using Twitter, two-thirds provide real-time customer service through the micro-blogging platform. Of those, 80% have an account on Twitter dedicated solely to customer service, and 70% use faces of the representatives to humanize their online profiles.
The financial sector is one of the most sophisticated when it comes to providing mobile capabilities for consumers. Most brands are taking a multi-pronged approached to their mobile strategies, providing a buffet of options including apps, dedicated mobile sites and SMS alerts. More than two-thirds of the brands host a mobile site or app.