Turning Consumer Data Into Dollars

The availability of vast amounts of data and affordable technology allows financial marketers to drive more impactful messaging, eliminate wasteful spending, improve the development of new products and enhance the overall customer experience.

With the wealth of insights that data provides on a daily basis to help drive crucial decisions and mitigate risk, it’s difficult to imagine that 40% of the organizations surveyed by Informatica and Capgemini do not currently have plans to implement big data initiatives. Further, only 24% of the companies surveyed responded that they were using data profitably and only 33% plan to modify or expand their big data strategies.

Unfortunately, the use of data also lags in the banking industry. When considering a financial institution’s assets, data should have earned a seat among the traditional categories of reserves, loan portfolio and securities.

A well-executed data analytics strategy holds the key to identifying opportunities for quantifiable improvement enterprise-wide, particularly when it comes to marketing. With business intelligence, developing effective marketing programs and measuring their true ROI no longer has to be a guessing game for banks. Yet, many still treat it as such. In today’s business environment of multiple channels, if banks harness the valuable data that is currently underused, they can find countless ways to turn that data into cost savings, new business and increased revenues.

Eliminate Data Silos

In a survey of over 3,000 banking institutions done by Wipro detailed in The Digital Banking Report: 2016 State of Financial Marketing, fewer than 15% of financial institutions reported having a mature digital marketing policy. Many continue to measure marketing outcomes based on data from back office accounting systems, which only tell a fraction of the story.

All too often, the data captured from these and other systems across the bank is housed in separate repositories and spreadsheets, making it nearly impossible for anyone – marketers, CEOs and CFOs included – to locate and analyze accurate, up-to-date insights.

The dilemma in banking becomes how to collect and consolidate data, and then make that data useful. The solution begins with the elimination of silos.

By centralizing and automating data analytics, banks and credit unions can systematically integrate data across all business lines and departments, housing it in one central location. By doing so, banking leaders start to gain the visibility they need to identify actionable insights. With this holistic, 360-degree view of the organization’s critical data measures as a foundation, banks can begin to address marketing initiatives with a true strategy.

Replace Brand Awareness with Personalized Marketing

The 2016 State of Financial Marketing report also found that increasing share of wallet, or deepening customer relationships, is the banking industry’s most important marketing priority. However, this objective will be hard to achieve without a strong understanding of target audiences.

According to the Capgemini study, Big Data Alchemy: How Can Banks Maximize the Value of Their Consumer Data, only 37% of consumers feel that their banks understand their specific needs.  With the amount of customer and transactional data that bankers now have at their fingertips, this simply should not be the case.

It is no longer acceptable for the banking industry to develop marketing messages for several customer segments simultaneously that have different financial statuses and needs. Relying on purchased direct mail lists and hoping for a two to three percent response rate will not suffice either, and should no longer be a marketing team’s benchmark for success.

Demonstrating to customers that their needs are understood is about marketing to the right person, at the right time, with the right message, via the right channel. Successful bank marketing is becoming less associated with a bank’s brand awareness and more tied to the ability to personalize communication, products and offers.

The 2016 State of Financial Marketing report found that brand awareness dropped in priority for banks significantly from 2013 to 2016, identifying that consumers gravitate more toward marketing messaging tailored to their personal financial needs. This is especially important when considering millennials who are highly tech and marketing savvy, and thus will not respond to poorly targeted and delivered marketing messages.

Millennials are even harder to predict and to engage for bank marketers, as their digital footprint is fundamentally different from previous generations. They expect to be rewarded for their time investment, and broadly see their banks’ value as purely transactional.

Sending an email blast about financial planning to your entire list of millennial customers will most likely be snagged by sophisticated filtering at their end or deleted from the intended audience’s inbox. Alternatively, planning a strategic social media campaign can help a bank tell a story through millennials’ preferred channel, and more importantly, in the context of their lifestyle.

While the demand for personalization and the advent of online and mobile channels continues to create complexities for bank marketers, sophisticated scheduling tools that leverage data analytics make highly targeted marketing possible – and even simple – to properly execute. With an established strategy supported by the right technology, banks and credit unions of all sizes can begin to shift their expectations and achieve significantly higher response rates than just two or three percent.

Read More: Personalization in Banking: From Novelty to Necessity

Leverage Marketing Technology

Automated marketing platforms and integrated business intelligence tools are no longer reserved for just the big banks. In fact, the technology designed to infuse marketing with data analytics is often created with smaller, regional financial institutions in mind. Banks with smaller marketing teams might not employ someone with data expertise, so these institutions often benefit the most from solutions capable of spotting trends within a data set.

Beyond scheduling and tracking the day-to-day marketing activities, banks of any size should lean on marketing technology to receive up-to-date snapshots, visualizations and graphics that make evaluating and reporting on marketing efforts simpler and more meaningful. Financial institutions that seek technology and partnerships for marketing are quick to realize how these investments directly impact profitability as well as reduce risk.

Strained budgets continue to hinder banks from investing in new data technology, but the utility of data in making decisions to increase profitability can no longer be ignored. Analytics enable banks to tie marketing efforts and investments back to revenue dollars and to accurately attribute specific outcomes to the appropriate marketing channel or activity.

This attribution gives banks the knowledge of which marketing tactics aren’t successful and which activities are. According to IDC’s report, Implementing an Analytics Strategy to Accelerate Insight, 83% of institutions using advanced business intelligence realize a significant return on their investments within 12 months; nearly half see a return in just six months. When banks count on the data to tell them where to place attention, they in turn can maximize marketing ROI while reducing the resources spent to get there.

Read More: Ten Marketing Trends the Banking Industry Can’t Ignore

Turn Data into Action (and Dollars)

It is a complex world for bank marketers, with more disparate audiences and channels to manage than ever before. There is more data to collect and evaluate and more customers and prospects to attract and retain. Yet, what this really signifies for banks is an opportunity to finally, truly engage their customers, to reach them in a way that will resonate and cultivate lasting relationships, and to know with certainty whether these efforts are successful.

As banks and credit unions look at their overall growth goals, modernizing their marketing strategies has to become a central component of their approach, and it should be data-driven. Bank marketers should no longer settle for mediocre response rates. Data should lead the charge in developing marketing programs that a bank can count on to generate strong conversion rates and even uncover hidden revenue opportunities – all of which have a direct, positive impact on the banking industry’s bottom line.

This article was originally published on . All content © 2024 by The Financial Brand and may not be reproduced by any means without permission.