The report: Marketing Strategies for the Digital Age
Published: October 2023
Source: The nonprofit Bank Administration Institute, a well-known source of data, information, and training for the banking industry since 1924. BAI’s executive reports are issued monthly and offer insights on many industry topics, including analytics, customer service and bank branch design.
Why we picked it: Marketing departments at banks large and small are ravenous for actionable advice as they wage a three-front war: Growing their businesses and customer bases, fending off competitive threats that are multiplying every day, all while corralling martech stacks that are increasingly complex. Could the BAI report steer its marketing readers toward daylight?
Executive Summary of the Report
As changes in technology and consumer behaviors accelerate, it’s critical that bank marketers be nimble. Many financial marketers are struggling to “level up” their marketing strategies and tactics while juggling disparate marketing initiatives and outreach for various age groups with different priorities.
BAI’s report, “Marketing Strategies for the Digital Age,” offers a wide-ranging round-up of marketing hot buttons, while highlighting how banks are testing new technologies with customized messaging around generational needs and life events.
The report touches on a long list of tactics banks should consider, including “hyperlocal” marketing, personalization, dynamic creative optimization, the rise of TikTok and Instagram as viable marketing channels, artificial intelligence, the effective use of data science, and the need to break down organizational silos — as well as evergreen admonitions to be “digital first” and know your ROI.
Key Takeaways
• Rapidly changing consumer behaviors are leading bank marketers to adopt more agile strategies.
• Many banks now have distinct marketing initiatives and outreach for various demographics.
• Others are programmatically targeting their offerings and messaging to coincide with “life events,” such as marriage, family, college, downsizing, divorce, and death.
What we liked: This month’s report offers a timely look at emerging marketing strategies with insight from BAI staff, bank leaders and technology vendors.
What we didn’t: Like its intended audience, the report struggles at times to deliver a coherent strategic picture, often devolving into a laundry list of marketing tactics, technologies and tips.
Things that made us go “Hmm:” The most notable theme — that banks are significantly underinvesting in brand-building — is buried at the end and only briefly mentioned in the introduction.
See more coverage of bank marketing strategies.
Sorting Through Marketing’s Messy Toolkit
The report argues that, as a majority of banks now invest in marketing technologies for growth, those that don’t or hesitate to do so will fall behind the curve. The following are some of the tactics BAI recommends.
Be hyperlocal and personalized: Banks can engage in a digital version of hyperlocal marketing by using geofencing or Google Maps and ads. Financial services marketers should also consider exploring more sophisticated programmatic advertising with dynamic creative optimization which offers an opportunity for micro-level personalization on a massive scale.
Leverage emerging search platforms: Google may be the world’s default search engine, but a growing number of consumers, especially younger ones, now start their searches on social media. Marketers should rethink SEO and content for platforms like TikTok, where financial advice and educational content are surging.
Invest in data science and AI: AI tools offer great value, but marketers should use them as complementary enablers, not as a replacement for thoughtful and insightful content. Banks may also have to invest more in data modeling to help predict future outcomes, feed machine learning algorithms and better understand audience journeys.
Segment and customize: To capitalize on their sheer numbers and growing spending power, financial services marketers must obviously expand outreach to younger consumers. They can start with Gen Z by enhancing mobile experiences and financial education content. But marketers also need to acknowledge the skittishness of this cohort: While half of Gen Z customers say they are likely to increase the number of deposits at their primary financial institution, nearly half also plan on changing primary institutions in the next two years. And while these consumers prefer a mobile and digital experience, 45% also say they want access to a branch and 24/7 customer service.
Mixed Signals:
Half of Gen Zers think they'll they be increasing the dollar amount of their deposits at their primary bank, but half also said they are looking to switch their primary provider by 2025.
Watch your language: In the report, Citizens Bank’s Beth Johnson stresses the need to move away from “bank speak” and sales-y language and shift to a communication approach that centers on customer needs and aims to foster long-term relationships.
Expect and adapt to frequent change: The banking industry is changing so quickly that marketers need the ability to rapidly adjust their messaging. Five years ago, Citizens conducted messaging tests every six to eight weeks; it now tests messages eight to 10 times each week.
Read more:
- Digital Marketing Tactics, Trends and Tips to Know About for 2024
- What Does a Successful Influencer Marketing Strategy Look Like for Bank Brands?
But Where’s the Strategic Glue?
With its emphasis on emerging marketing tools and hyper specific tactics, the report may leave many marketers feeling their to-do list just got longer. And BAI does note that the race to adapt tactics across multiple channels, platforms and demographics can lead marketers into a highly fragmented marketing activity primarily focused on short-term wins.
The report acknowledges two worrisome outcomes:
Neglected brands — While 65% of marketers believe a brand is a critical driver of buying behavior, many banks’ advertising budgets are allocated almost exclusively to product promotion. CMOs acknowledge the long-term value of brand building, but their CFO counterparts often push the organization to focus on more immediate revenue.
Budget imbalances — Report sponsor Vericast found that between 2018 and 2022, more than 90% of customer marketing investments went to product promotion while less than 10% were for brand messaging.
“Marketers have become fixated on the benefits of short-term activation. Studies in retail banking show that short-term promotions and discount campaigns may have a positive, immediate effect on the numbers. However, these effects are often fleeting, leading to a decrease in brand trust.”
— Lisa Nicholas, vice president of financial strategy, Vericast
Finding the Right Mix
To retain loyalty and combat customer attrition, banks must balance short-term activation and long-term brand investment. Successful branding will lead to greater customer satisfaction, better returns from product promotion messaging, and long-term profitability. One Gartner study that found investing in brand-building can increase market share by up to 8%.
The report recommends two remedies:
Adopt an “always-on” brand strategy — Maintain a brand campaign that is omnipresent across touchpoints. Banks should strive to consistently build a strong brand identity that reflects their values and resonates with customers.
Seek opportunity in volatility — Economic uncertainty may tempt some financial institutions to adopt conservative strategies to stabilize operations, but BAI notes it’s also a big opportunity to double down on customer-centricity. Banks can use the current conditions to build long-term loyalty by making genuine connections and delivering meaningful and differentiated value to their customers.
About the author:
Craig Guillot is a longtime contributor to The Financial Brand who specializes in technology. He often writes about IoT, cybersecurity and SaaS, primarily in the verticals of retail, manufacturing, financial services and healthcare. His work has appeared in The Wall Street Journal, Entrepreneur and elsewhere.