Before big data, social media and advanced analytics, relationships were formed on a one-to-one basis … in person. In financial services, this usually involved an in-depth conversation with a branch manager at a bank or credit union after the consumer had visited multiple offices to compare products. The process was relatively slow, with a great deal of paperwork, but the result was often the beginning of a loyal relationship. Over time, and multiple visits, a high level of intimacy with the customer’s needs was usually achieved.
Over time, the amount of data, array of products, delivery channel options, methods of communication and number of competitors increased dramatically. At the same time, the number of visits to the branch dropped precipitously. This transformation has challenged financial marketers, who need to find ways to communicate with intimacy, at scale.
In the Digital Banking Report sponsored by BAI entitled, “Humanizing the Digital Banking Experience,” it was found that many organizations are ill prepared to deliver a basic level of personalization during the consumer’s digital journey, let alone replicate the level of humanization and intimacy that big tech firms are delivering.
Biggest Challenges For Retail Bankers
Financial marketers recognize that survival in the digital age will require many of the components of challenger banks and large tech companies, including the ability to build a digital organization from the inside out, process data that will provide real-time solutions for consumers and create relevant, personalized engagement that can create loyalty through intimacy. Those marketers that accept the digital marketing challenge will be winners in the future.
In the Digital Banking Report research, it was found that the biggest challenges for banking organizations included new customer acquisition (41%), personalizing the consumer digital experience (40%) and deposit growth (35%). All of these objectives require a better capture and use of data to provide the best level of engagement and solutions. This is where humanizing the digital experience can pay the greatest dividends.
Unfortunately, this chart also illustrates a potential problem. With many marketers seeing “digital” as a way to reach more consumers faster there has been a disproportionate amount of budget allocated to acquisition efforts, without paying enough attention to onboarding, engagement and sustainable growth.
Digital Marketing Builds Consumer Intimacy
Marketing automation tools not only automate marketing messages, these tools also enable banks and credit unions to understand consumers better and develop personalized 1:1 campaigns. In other words, retail banking organizations can use digital marketing tools to create a unique persona household, converting cold leads into warm leads, warm leads into customers and customers into fans. But you need to have a strategy.
1. Understand data and analytics. Without understanding the profile of your target audience, your marketing becomes just another muffled voice in a sea of digital noise. The good news is that banks and credit unions have the data and tools needed to replicate the intimacy reminiscent of yesteryear. Rich behavioral data, combined with preferences, demographics, lifecycle stage and more can be a powerful relationship differentiator.
More than ever, marketers must understand and use the appropriate technologies. This may require looking outside your organization for the talent and capabilities needed to effectively connect with each person as a valued individual.
2. Connect on the best channels. The movement from mass to direct marketing started more than a decade ago. Over time, the power of digital channels has only continued to increase, with mobile marketing reflecting the use of this channel in new ways every day.
Mobile offers the unique advantage of being accessible to consumers 24/7. It’s the greatest example of real-time communication. In the scope of data collection, mobile can provide a user’s real-time location and other contextual information. No other channel is as powerful … at least not yet.
Including mobile communication in your marketing mix provides you with a competitive advantage of ultimate relevance and intimacy. It can enable you to provide advice and solutions immediately when your data and analytics say the consumer will be responsive. Done correctly, trust and loyalty will increase exponentially. So will the power of word-of-mouth marketing (WOMM).
3. Integrate messaging across channels. A multichannel marketing campaign communicates with households across multiple channels, including direct mail, email, text messaging, mobile messaging and web marketing. Without exception, an analytics-driven multichannel marketing effort will outperform single-touch marketing communication.
There are dozens of effective digital marketing platforms available that can automate relatively complex multichannel communications. Using data and analytics, personalized messages can move from next-most-likely product messages to next-most-likely actions. This moves from transactional communication to advisory engagement that is most valued by consumers.
Personalization Benefits Seen, But Use Lags
Over the past 18 months, customer service discussions have been overwhelmed by the potential of chatbots, automated savings tools, digital assistants and the power of AI. While many banks and credit unions pursued these technologies to benefit from efficiency at scale, industry use and success stories are still limited.
Most financial institutions have established customer service divisions that devote at least some resources to helping customers through digital channels. As with many advancing technologies, the importance of digital tools exceeds the actual marketplace implementation. Basic digital customer support solutions were found to be the most important by financial organizations responding to the Humanizing the Digital Banking Experience report, followed by real-time product recommendations and security biometrics.
It was interesting that the most talked-about technologies were considered the least important. It is important to note, however, that larger financial institutions found these technologies to be much more important than did smaller organizations.
Personalizing marketing messages by financial institutions allows organizations to tailor communication to customers and members by identifying unique traits. This allows financial marketers to reach customers on an individual level instead of pushing one message out to the masses.
Personalization can be introduced in website copy, eBooks, webinars, emails, social media posts, interactive content and beyond. With few exceptions, banks and credit unions recognize the potential of personalization to drive greater intimacy. Again, the Digital Banking Report found that importance did not equate to effective use of these tools in most organizations.
Many Hurdles to Building Personalized Solutions
Personalization is powerful when it’s authentically human. But personalization and humanized communications are hard to scale, especially when the target market is consumers worldwide.
Financial marketers still struggle with the execution of personalized messages, with challenges ranging from data and a lack of time, budget and personnel resources. In banking, unique challenges include compliance and silos. As with many challenges in the banking industry today, the technology to make progress is available, but the execution is still lacking.
In the long term, the biggest challenges in delivering a humanized solution could be expertise. This challenge is exacerbated by the lack of educational options to improve skill sets. Many educators have moved to private industry, reducing the size of the talent pool funnel.
Digital Intimacy is Not Impossible
Financial institutions that build digital intimacy will have a deep understanding of consumer needs and values, delivering a more loyal customer base that has higher lifetime value. Word-of-mouth growth will also increase. All this will lead to improved marketing metrics and revenue.
The key to success is to start small by implementing one strategy and adding more over time. Any incremental increase in customer intimacy is better than none. It is also imperative to build digital intimacy strategies from the foundation. Avoiding digitalization of the back office does not support humanizing the digital experience.
Not all personalization strategies are realistic for everyone, yet there are strategies and tactics that can be implemented regardless of budget or team size. Not to be forgotten, banks and credit unions can’t implement a customer intimacy strategy without a culture that supports personalization of communications.
Purchase The Report
The Humanizing the Digital Banking Experience report, sponsored by BAI, provides insight into the importance of humanizing the digital banking process and how well banks and credit unions are doing in this endeavor globally. Providing a benchmark for future strategic planning, the report includes the results of a survey of more than 200 financial services organizations worldwide. The report includes 69 pages of analysis, 27 charts and 6 international case studies.
Subscribers to The Digital Banking Report and those wishing to purchase the complete report can access it immediately by clicking here.