Back to Basics: How Bank Marketers Can Use First-Party Data to Rev Up Campaigns

Marketers and credit unions are in a privileged position when it comes to understanding their target customers thanks to a treasure trove of first-party data. With the right strategy, banks can use this data to bring their marketing campaigns back to basics, built on the time-honored premise of high-quality creative. Here's how.

Marketers at banks and credit unions may be in a privileged position when it comes to understanding their target audience. After all, financial institutions sit on a treasure trove of first-party data, including demographics, income, credit details, and a constant stream of transaction receipts — all providing a clear picture of who their customers are and their consumption behaviors.

But it isn’t that simple. Banking and financial data are highly regulated, and data governance protocols are necessarily strict. Data protection legislation is increasing — albeit in a piecemeal way — across the U.S.; changing how businesses store, process, and utilize customer data. Given the squeeze on marketing department budgets in financial institutions, it has not been easy to unlock this valuable customer information, however plentiful it may be.

However, there are ways that banks can take advantage of the opportunities presented by access to such valuable insights. With the right strategy, banks can use first-party data to bring their marketing campaigns back to basics, built on the time-honored premise of high-quality creative. Here’s how.

Consent Matters

First things first: When it comes to building first-party data strategies, gaining consent from consumers is key. While some may be completely against having their personal data used for marketing purposes, and others might be very open to it, most will fall somewhere between these two extremes.

Banks, or any organizations for that matter, should be wary of how they ask for this consent. Collection at the wrong moment could lead to low levels of approval, so it’s worth experimenting with where and when these notices are shown to customers — as well as the phrasing of the questions — or even putting it to a focus group. Of course, data protection regulations will dictate these processes to an extent, so privacy and legal teams must be involved in this research.

It’s vital that the value exchange is clearly communicated to the customer. In addition to notices that cover what data is being collected, why, and what the individual’s opt-out options are, banks and credit unions must tell customers what they are being offered in return.

A Fair and Transparent Value Exchange

Research shows that nearly half of Americans are prepared to share personal data on their own terms, and it’s only through a fair and transparent value exchange that financial institutions will reach optimum consent levels. Customers prepared to answer some well-chosen questions could earn rewards while providing everything the marketing department needs to create tailored experiences.

Incentives on offer could include more personalized ads and services — 61% of banking customers say that personalization is important to them — or access to higher product tiers, free gifts, prize draws, and so on. Through this value exchange, banks can build customer trust, build loyalty, and gather first-party data about their customers that they can use to cross-sell and upsell.

Marketers will also be able to gather insights about their audience that can be used to target people who aren’t yet customers but share similar characteristics as their current customers. Securely connecting first-party datasets with the audience graphs offered by identity providers such as Experian or TransUnion will enable banks to create lookalike audience segments that don’t expose any personally identifiable information (PII) but do allow them to accurately target their marketing campaigns at people who are likely to be interested.

Connecting Campaigns With the Right Customers

When it comes to marketing products to existing customers, financial institutions need to think not only about who they target but also who they aren’t. Not every customer holding a checking account would be eligible for a credit card, for example, and even fewer of them are likely to be considering a product such as a mortgage.

Through consented first-party data collection, banks can work out which customers should be targeted for upselling and cross-selling and when — and which ones shouldn’t be targeted at all. These insights will greatly reduce wastage; welcome news when marketing budgets are tight. As a result, marketers can spend more time and money ensuring they are creating impactful campaigns with a high chance of driving their desired outcomes.

“In addition to notices that cover what data is being collected, why, and what the individual’s opt-out options are, banks and credit unions must tell customers what they are being offered in return.”

As well as targeting, first-party data strategies unlock the possibility for banks to accurately measure the impact of their marketing campaigns. Producing high-quality creative is all very well, but it is essential that marketers can verify the success of these campaigns and show they are having a positive impact on the overall goals of the business.

By creating two audience groups — one of which is shown a specific campaign and one which isn’t — a bank can see if the campaign drove the desired outcomes and by how much. The results give a fast and accurate picture of campaign performance in terms of cost per outcome and return on investment. Marketers working with restricted budgets can use this data to persuade senior decision-makers within the institution to boost investment in marketing.

Bringing Merchants Into the Picture

There are so many possibilities of extracting value from first-party data for banks. Like how large retailers have created their own media networks, financial institutions could use their existing relationships with merchants to open an advertising channel for customers. Based on spending data, merchants could target personalized ads to customers through a bank’s media network.

Of course, connecting first-party customer data with merchants, identity providers, and other entities must be done in a way that doesn’t involve any data sharing, commingling, or exposure of PII. By utilizing privacy-enhancing technologies (PETs) such as data clean rooms, organizations working in the financial services sector can realize the potential of their data without risking data privacy, security, or regulatory strife.

A fair and transparent value exchange built on clear consent helps marketers deliver personalized campaigns that are only seen by relevant existing customers, reducing wastage. Further efficiencies can be introduced by using customer insights to create lookalike audiences for targeting new customers.

By implementing robust measurement frameworks to prove ROI, financial institutions can see immediately how these first-party data strategies are boosting their bottom line. With first-party data providing the platform, banks can get back to the basics of marketing: quality creative that is carefully aimed at relevant consumers to achieve the most impactful results.

Marc Cestaro is the Vice President of Sales at InfoSum. Since joining the team in 2020, Marc has helped educate and drive clean room adoption across the marketing and advertising landscape, including brands, media owners, data and identity partners, and agencies.

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