Are CMOs Getting Left Out of Banking’s Digital Transformation?

Financial marketing leaders who want a say in digital transformation must make a case for it. The first step is to establish themselves as the internal 'voice of the customer.' Then they must demonstrate that they too are adapting, and that marketing will also evolve to keep pace with new digital realities.

Groundbreaking research from Forrester has confirmed a long-held suspicion: Marketing leaders are under-represented in digital transformation efforts, if not left out of the loop altogether.

According to the analysts at Forrester, this is a big mistake.

“Digital is a way to create a direct relationship with your customers,” says Thomas Husson, Vice President and Principal Analyst at the research firm. This is ultimately the biggest lesson that financial brands can learn from Amazon and company, he says.

Yet Husson’s report, “CMOs: Define Your Role in Digital Transformation,” finds that marketing leaders often have little to say about the strategy or execution of digital transformation.

“Digital transformation is by nature a very transverse theme that requires attention from the whole C-suite and that should be led by the CEO,” says Husson in an email interview with The Financial Brand. “It is not about digital transformation, but about business transformation.”

Husson says this concept can get lost in all the buzzphrases and talk about this channel, that experience.

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Why CMOs Should Play a Central Role in Transformation

“Many CMOs aren’t members of their companies’ executive committees.”
— Thomas Husson, Forrester

Husson says CMOs should be seen as an essential part of making the transformation happen.

“The CMO plays a key role in orchestrating and coordinating experiences across channels and departments,” says Husson. “Instilling brand values and customer experience vision throughout the organization is a game-changer.”

Bringing CMOs into the planning and execution helps a brand avoid too great a focus on technology, scale and cost reduction, which is what can happen when the bean counters and nerds run the transformation process.

Husson points to artificial intelligence and big data to show how this plays out practically.

“The CMO should be the one asking key questions,” he says, “For instance, ‘How can I create trust so that customers want to share data with my company? What data do I truly need to differentiate and personalize the consumer’s experience?'” That focus, pinpointing critical data, is the very opposite, according to Husson, of the urge to sweep every bit of data into a complex, difficult-to-access data-lake infrastructure.

“This is really about being the ambassador and the voice of the customer inside the institution,” says Husson. “During this research, I was surprised by the fact that many CMOs aren’t members of their companies’ executive committees.”

Read More: Great CX in Banking is Rare, Financial Marketers Struggle to Stand Out

What Keeps CMOs from Key Roles in Transformation

Every industry has leaders that embrace change and others firms that drag their heels. Husson says financial services companies have been more impacted by digital transformation than many others.

“Overall, I’d say that U.S. financial institution CMOs are ahead of the average CMO,” says Husson. “More than others, they have identified the risk of distintermediation and are acting faster to improve consumer experience.”

It’s a big industry, and in many institutions, that is not always the case, however. In the report, Husson and his team make the point that often CMOs become focused on the present, working to make progress on short-term, return-on-investment-driven goals, and in the process not being part of the forward-looking transformation process — by default or by someone’s design.

In part, this focus on results in the present is a chicken-egg thing. Husson points out that CMOs overall have the highest turnover and the shortest tenure of all positions in the C-suite. CMOs face immediate pressure to move the needle and they may hold back from inserting themselves into the transformation process because of that pressure, which keeps them out of longer-term discussions where their view could benefit the institution.

A fundamental misalignment of the CMO’s job and institutional priorities may lie behind this problem.

“One reason may be the unclear expectations between the CEO and the CMO,” says Husson. He suggests that the precise job description and priorities don’t get spelled out: “Is the CMO to be more focused on strategy and vision? Is the CMO to be solely focused on distribution? Or is the job a mix of the two?”

“The role of the CMO varies quite a lot depending on the organization,” says Husson. “Some of them are in charge of sales, communication, and customer experience, while others focus more on branding and support sales on lead generation.”

One factor that has confused things in many organizations is the explosion of C-suite chairs, according to Husson.

“Beyond the CIO, several other roles have emerged to take leadership on digital transformation,” he explains. “The introduction of more titles into the C-suite alphabet soup — think Chief Experience Officer, Chief Growth Officer, Chief Digital Officer, Chief Customer Officer — has prevented the CMO from playing the key role of orchestrating the delivery of brand experiences.”

Another barrier, from the report: “Even when CMOs are officially in charge of brand experience, they do not necessarily own the teams and resources that deliver the brand promise across all touchpoints.”

A point that sometimes gets lost in the sweeping wave of digital transformation is that sometimes somebody has to stand up and say “Stop,” when transformation is going too far, too fast, or in the wrong direction.

“It is all about infusing the right mindset and changing the culture of the organization,” says Husson.

How CMOs Can Get Hold of the Transformation Tiller

Marketers have long clamored for more respect and more voice in the decisionmaking and execution processes.

Many would envy the European bank CMO who told Forrester surveyors that “I now have a seat at the table and almost a veto power; I managed to convince my peers and the CEO that we must pivot to consider trust as a competitive advantage to build customer lifetime value.”

For those top marketers who don’t have that seat at the table when it comes to digital evolution, Forrester recommends first doing everything possible under the marketing function’s own tent to become as digital as possible. A key element of this is developing digital talent.

“Make sure your own team is fully up to date on the latest digital tactics, data techniques, innovative technologies, and ideation methodologies while preparing for the future with more CX specialists, social science experts, and tech-savvy marketers.”

Often it’s not as simple as doubling down on the work inside marketing’s own silo — usually there comes a point where collaboration with the CIO and CFO must play a part, according to the report.

A third priority for CMOs is stepping up to drive positive “employee experience,” which in turn can help improve customer experience.

Employee experience can be a challenge in even a definitional sense, according to Husson. “It’s a gray area in many companies,” he says. “Is employee experience an IT thing — empowering employees with the right tools and technologies? A marketing thing — what are the company’s values and do they translate into the brand vision? Or is it a pure human resources thing?”

Husson thinks it’s a blend of all three elements. “The brand purpose is key not just for prospects but also for the employees serving them,” Husson maintains.

Shaking up the marketing staff — and relationships with outside partners like marketing agencies — to realign for priority digital tasks will not only help inside the marketing silo, but demonstrate the ability to rethink approaches, which can help the CMO become part of the institution’s digital transformation team. The key there, according to the report, is for the CMO to be running the show, not just signing off on outsiders’ initiatives.

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