Five Winning Ways Banks Can Approach Digital Marketing
‘Being digital’ takes on different meanings for different banks. However your organization defines it – and whatever your starting point – here is how to more effectively reach, retain and serve new and existing customers in the digital age.
For banks that started as brick-and-mortar centers, the world has changed. Older generations of banking customers, including the highly active baby boomer demographic, are increasingly turning to digital technologies to handle their banking needs, from bill paying and investing, to depositing and borrowing.
Meanwhile, younger generations are less apt than their predecessors to take out home or auto loans or make investments, partially due to slow economic growth in the U.S. and elsewhere in the world. At the same time, upstart secondary or nontraditional financial services organizations (aka, fintechs) are increasingly eating into the loan, credit, payments and investment pie that banks once exclusively claimed.
Globally, digital consumption and purchasing behaviors have also undergone rapid acceleration. While customers young and old still gravitate toward bank branches when they reach financial milestones, transactions are increasingly moving online. Here are five ways bankers can follow the money.
Define what “being digital” means to you.
While many banks are still trying to grasp what it means to “be digital,” we see clear examples of success emerging from our client portfolio. Capital One, for example, has used predictive analytics and customer journey mapping to fine-tune its approach to digital delivery by examining the causes of digital leakage. Similarly, Chase Bank has had significant success in using customer journey mapping to remediate digital channel conflicts. Further, U.S. Bank’s analysis of Web-based customer interactions has significantly increased uptake in product sales. Whatever your definition of digital is, be sure to also consider programmatic advertising, native advertising and personalization methods, all of which have proved successful as vehicles for customer acquisition.
Plan your response to digital disruption.
As Figure 1 depicts, we believe there are four ways that banks can respond to digital banking and the threat of disruption. Banks can move from one state to another at any point rather than moving through the four states sequentially.
of Banking Services
The first state is simply to implement an effective digital interface between legacy systems and digital customers. This involves little innovation and is a fairly simple and quick action to take.
The second state involves implementing a natively digital platform and integrating all customer touchpoints across all channels. Leading digital banks employ this strategy.
The third state is a common defensive play in which banks work with third-party partners to provide digital services under the bank’s brand.
The fourth state involves the development of an open banking architecture in which customers dictate how they interact and transact with the bank, in exchange for providing more personal information.
Whether you use a partnering or in-house approach, the basis of a successful digital marketing campaign is knowing where you stand and where you want to be.
Know how to market “in the moment.”
When attempting to reach hyperconnected, easily distracted digital customers, it is critical to interact with them in the most relevant way and at the most relevant time, or “in the moment.” Banks must effectively map their customer’s lifestyle journey and revisit engagement opportunities from the customer’s point of view, such as buying a first home, graduating a son or daughter, refinancing and nearing retirement. In that way, the bank can be ready to serve at the right time and place.
For example, when a customer pays off a car loan and has access to additional funds, a bank might anticipate and develop a one-to-one personalized offer based on the customer’s spending patterns and financial goals. Our work with KeyBank is a great example of this, as the organization now has the capability to formulate personalized and timely offers.
Become an online marketplace of free advice.
May the best advice win. That’s the essence behind the recent increase in free financial guidance to help consumers consider, use and make the most of their finances. American Express’s OPEN Forum, for example, offers insights and online resources to small business owners. “If they grow, we grow,” said Mary Ann Reilly, senior vice-president of American Express OPEN, after launching the forum in 2007. In addition to financial advice, banking websites could soon include more non-banking services to attract more customer interaction. In other words, banks are increasingly becoming intermediary marketplaces in the digital era, and each prospective event in the customer journey presents a new opportunity.
Measure your reach as much as your balance sheet.
Thanks to Code Halo™ thinking, banks are better able than ever to apply insights generated by customer data. To respond to customer habits and preferences, organizations need to develop the ability to measure and track their digital footprints and predict their needs.
While anticipating behavior and re-allocating marketing spend can be a daunting task, banks can use data-rich customer personas and micro-segmenting to develop more tailored products and services, lower attrition, boost acquisition and elevate customer satisfaction rates.