The rise of digital tech and marketing has altered the way business is done around the globe — in almost every way possible. These advances, which are happening faster and faster, and will leave financial institutions behind if nothing changes. Banks and credit unions that are quick to adapt, and adopt proven effective digital marketing technologies will engage consumers in the ways they want to be engaged. Those institutions that find success will thrive, while others will quickly fade away.
According to a recent eBook published by Marketo entitled, Don’t Get Left Behind: The Rise of Digital Marketing in Financial Services, financial institutions have been slow to change, mostly due to “the existing perspectives of how things should be done and the long time-scales required for their operations. This makes them rather conservative and unwilling to experiment with new and possibly unsafe technologies.” In fact, fewer than 15% of banks have mature digital marketing policies. This is clearly much lower than other industries.
1. Big Data
Leila Lavaee, a data analyst focused on digital strategy and customer experience at TD Bank, says it’s time for financial institutions to get serious about big data.
“The next frontier of digital marketing for financial institutions is to truly take an organization’s big data and create multi-dimensional customer personas”
— Eric Barba,
The promise and potential of big data has enraptured marketers in nearly every industry, including banking. According to data from Gartner, 64% of companies are currently deploying or planning big data initiatives. But last year the focus was more on infrastructure and all costs associated with it. What seems to be missing in the bigger picture is the true value of big data which is if — and only if — it drives practical, actionable strategic insights. Many still don’t know what they are going to do with it.
Leila recently gave a thought-provoking talk on building a “big data mindset” and how it can enhance the customer experience. Leila explained how to develop the new analytical strategies and skills required to mine massive data sets. But most importantly, she suggests that instead of “big data,” financial marketers need to think about the right data. Storing vast amounts of information in a large-yet-efficient system does not — in itself — benefit the institution that data isn’t being used to generate insights that drive marketing and business decisions. People tend to have a narrow vision of big data, thinking of the term merely in the context of IT infrastructure, storage, cost, training, privacy, security, etc. Big data represents a fundamental shift in strategy, and not merely a new suite of technologies.
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2. The Fundamental Model of Retail Banking
Alex Sion, the CEO of Moven, says that he believes banking will be less about product innovation and more about innovation on the client experience. According to Alex, banking has to get back to the place where the banking experience is utility for the customer rather than a profit center designed to primarily benefit the bank.
The top three decisions he believes marketers need to consider are:
- Who is my customer?
- What is the value are we providing them?
- How do we best represent and talk about our value in the marketplace?
He says financial marketers need to look closely at those questions and believes many will reevaluate what their banking experience actually should be… at least for those institutions that reflect on the questions honestly.
According to Alex, banking has become a digital play. It surprises him that a service which is now almost entirely virtual is still so dependent on retail marketing and distribution — “a bad problem,” as he describes it. He says the retail banking industry is at a critical inflection point. The cost of managing relationships through massive branch networks outstrips many banks’ ability to generate profits. Meanwhile, jaded consumers increasingly interact with their banks through virtual channels. Ultimately, these two forces will lead to the creation of new distribution models, customer experience platforms, crowd-sourced business models and other game-changing innovations that will redefine the banking industry.
3. Digital Means Mobile
Melissa Musgrove, VP/Head of Social Media at Regions Bank, cautions financial marketers that consumers today are making purchasing decisions in an increasingly crowded market. In banking, disruptive technologies in alternative payment systems, virtual currencies and crowd-funding are requiring providers to innovate or they risk losing market share. Melissa believes mobile is the cornerstone of digital, as marketers learn to leverage it to develop relationships across the consumer lifecycle. Programmatic buying, native advertising and personalization continue to drive innovation. It’s driving engagement in ways and places where people are, not where marketers want or wish them to be.
4. Social Media Maturation
Prudential, which recently launched its “Bring Your Challenges Campaign” in social channels, has found great success connecting with customers and prospects online. Keith Gormley, Director of Social Media at Prudential, recommends that financial institutions shouldn’t be using social media as a channel to simply broadcast messages, bur rather need to leverage it in ways that engage the audience in genuine two-way conversation. Listen to your audience; if you give them the opportunity they’ll provide wonderful insight that can help you do business better.
Keith also recommends you expect the best but prepare for the worst. For younger and savvier audiences, social media will be the first place they look to find your brand… both in good times and bad. That can work to your advantage — in both situations — but it can really work against you if you’re not prepared. Set up a solid internal team to support your social media program, and include key stakeholders at the strategic level.
5. Business Banking Goes Digital
“I believe that the days of B2B marketing — in the traditional sense — are gone,” says Laura Barger, Managing Director, Head of Corporate Content Marketing at BNY Mellon, “particularly when it comes to digital strategy.” While the person shopping for business banking services may be using technology to perform their search today, but they are still a person. According to Laura, financial services marketers need to wake up to the opportunities afforded them through deep data analysis on digital channels, to yield greater levels of personalization and automation.
The most promising technologies in this space are also the most disruptive. They require internal behavioral changes, and organizations adopting these new ideas will need to manage through additional compliance and regulatory challenges. But Laura believes that the best technologies that will survive and have the most impact will be those that provide a truly open ecosystem, allowing financial brands to mix and match services — analytics, content management, social listening, automation, personalization — tailored to their needs and driving real-time data back to the business lines in ways that they can truly use.
Susan Marshall is the CEO and Co-Founder of Torchlite Digital Marketing, based in Indianapolis, Indiana. For 25 years, Susan Marshall has built and launched professional web and video editing applications including Flash, Dreamweaver and Final Cut Pro. She has also lead digital marketing efforts for large corporations such as Apple, ExactTarget and the Salesforce Marketing Cloud.