5 Ways Banks & Credit Unions Can Personalize Better Than Fintechs

A quarter of financial institutions still provide little or no data-based personalization in their marketing, providing data-savvy competitors with an easy way to siphon off customers. Traditional institutions face numerous hurdles to improving their use of data, but with the right efforts, they can overcome those obstacles.

Banks and credit unions begin collecting personal financial data from the time they first sign up consumers. From there the accumulation builds exponentially, creating a mountain of data that fintechs drool over. Yet, a survey by Total Expert shows a shocking number of financial brands still do not routinely use data-driven insights to improve customer experience.

Why? It’s not as if consumers adamantly oppose proper use of their data. The rapid growth of fintechs confirms that consumers will allow third-party service providers to access their personal and financial data — often welcoming it. Consumers do this because they hunger for someone to connect them to the products and services that will truly improve their lives, according to Lori Blix, Marketing Campaign Director, Financial Services, for Total Expert.

The right use of data, she said, provides a very lucrative roadmap for banks and credit unions to follow.

Total Expert, a marketing and customer experience platform provider, surveyed bank and credit union marketers in advance of a webinar presented in cooperation with The Financial Brand. The survey responses were drawn about evenly from banks and credit unions.

Here are three relevant findings:

  • 65% of respondents say they do not use their institution’s data as often as they should to educate and cross-sell customers.
  • 27% say they do minimal or no personalization in their marketing.
  • 19% say they don’t use data-driven insights at all.

In addition, of those that do use some level of personalization in marketing campaigns, the highest number indicated that first-name personalization was as far as they go.

Everyone talks about data integration, but clearly, leveraging customer data for marketing efforts is not yet an everyday part of how banks and credit unions operate today. Blix and Mike Manahan, SVP of Banking and Credit Unions at Total Expert, presented five ways financial institutions can up their game to be more competitive with the ever-growing cadre of fintechs reaching for pieces of their business.

Tip 1: Integrate Data to Elevate Customer Experience

Blix outlined three simple questions as a starting point for financial institutions to move beyond just talking about the need for data integration:

  1. What first- and third-party data does your institution currently have access to?
  2. What zero-party data (data the consumer intentionally and proactively shares) can you collect throughout the consumer journey?
  3. How can you leverage that data in your interactions with consumers to gain reliable, ongoing, real-time insights?

Leveraging data requires information to be centralized, accessible, accurate and usable, according to Blix. However, the Total Expert survey found that only 9% of financial institution marketers said their data is centralized and 29% indicated they do not have a customer relationship management system in place.

Blix also lobbied for “data democratization.” In other words, having data accessible to teams within your organization to improve decision making and quickly uncover marketing opportunities without involving IT.

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Tip 2: Create Experience-Based Strategies and Multichannel Brand Interactions

Financial institutions can no longer win customers through the sheer power of brand, Blix warned. Proliferating choices, fueled by technology, beckon consumers. This demands greater personalization strategies to move beyond simple name recognition and brand power.

Here are some related statistics from the Total Expert survey of bank and credit union marketers:

  • 51% are confident their target audience is getting a consistent message.
  • 36% use personas to segment, target or deepen their understanding of consumers.
  • 31% have defined customer-driven journeys with content that aligns with life events and personal aspirations.

“The beauty of zero-party data is you just have to ask consumers what they want and they’ll tell you, because they’re hungry for financial products that will make a difference in their lives.”
— Lori Blix, Total Expert

Those figures suggest that many institutions are still relying on “batch and blast” marketing, Blix maintained. They have not yet moved to multi-channel consumer journeys with engagement based on life events, aspirations and a shift from product-based to experience-based marketing. Marketing, she added, should integrate purpose-driven, emotion-based content and communication strategy.

Touching again on zero-party data, Blix noted that brands have an incredible opportunity to gain premium consumer insight across each interaction.

“The beauty of zero-party data is you just have to ask consumers what they want and they’ll tell you, because they’re hungry for financial products and services that will make a difference in their lives,” according to Blix.

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Tip 3: Deliver an Authentic Value Exchange at Every Touchpoint

Brand value is measured by the quality of the consumer experience, Blix stated. Backing this up, she shared several data points from third-party research:

  • 63% of consumers are highly annoyed with generic advertising.
  • 80% of consumers say they are more likely to do business with a company if it offers personalized experiences.
  • 91% of consumers would switch brands if a different brand with the same products and services was more authentic and purpose-driven.

In addition, although she didn’t cite a specific number, Blix stated that research shows that establishing an emotional connection drives the largest increase in customer loyalty as measured by revenue.

“Financial marketers are harnessing this trend in their creative strategies and connecting with life and human aspirations,” said Blix, “and it’s working.”

Tip 4: Connect Systems, People and Best Practices to Enable ‘Humanized’ Marketing

There are predicted to be a billion devices connected to the Internet at some point in 2020, pointed out Mike Manahan. “It’s easy to understand how consumers feel inundated and overwhelmed with so many offers, which many times are not relevant to them,” he stated.

To succeed , banks and credit unions need to adopt what Manahan referred to as the “humanization factor.”

Over the past couple of decades, financial institutions overall lost the personal touch with consumers through the use of technology, according to Manahan. “Much of our interaction with consumers has been received as cold. End users find themselves feeling like their relationship with the financial institution is very transactional.”

“There is one distinct advantage financial institutions have over high-tech newcomers — the existing relationship banks and credit unions have with customers.”
— Mike Manahan, Total Expert

To achieve that humanization, Manahan urged marketers to continue their efforts to break down institutional data silos to enable a complete view of the consumer; to use analytics and other technology to develop deeper insights into consumers and to develop personas that can be used to develop relevant messaging.

Local relationships are also a key to a humanized approach, according to Manahan. “Consumers will have a much higher propensity to engage with messaging that comes from a person rather than a brand,” he stated. So an approach that encompasses both data insights and a local relationship point will be the most effective.

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Tip 5: Refocus on Digital Innovation

Many fintechs identify a specific pain point and solve that pain point with a great consumer experience. As a result they slowly chip away at traditional institutions’ customer base, Manahan observed. However, “there is one distinct and valuable advantage that financial institutions have over these high-tech newcomers — the existing relationship banks and credit unions have with customers.”

To leverage that advantage, Manahan suggested that financial institutions audit their customer experience to identify product gaps and where any friction occurs.

“There is a great opportunity to take swift and definitive action to clear the blockages that keep valuable data siloed and allow marketers to marry pattern-based and behavioral needs with personalization,” Manahan stated.

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