Fintech Disruptors + the Banking Revolution: How Retail Banks are Meeting the Challenge
The rise of financial technology (also known as fintech) companies has lead to what some are calling a “Banking Revolution.” Unlike other industries, the banking world has yet to completely embrace digital efforts to improve the overall customer experience, due to legacy systems transformation, lack of agility, and the overall risk-averse culture of financial institutions.
With an increase of fintech companies disrupting the industry, retail bankers need to focus on creating an omnichannel customer experience (CX) if they hope\ to remain relevant.
According to Singularity University, nearly half of consumers use digital channels exclusively for their personal banking. A recent Accenture report cites a correlation between digital maturity and high market valuations / a better return on capital. That said, only 40% of banking institutions are digitally active.
This begs the question: how is digital marketing transforming banking and how can financial institutions stay relevant amidst the banking revolution? What is the cost of inaction?
To answer these questions, Setup spoke to fintech experts from brands and agencies about how retail bankers can stay on the cutting edge of digital transformation.
1. Put yourself in the shoes of your target audience.
Allison MacLeod, EVP of Flywire stated, “Understanding your market, clients, prospects, employees and audiences is critical for determining where to invest and where to market. For example, social channels are often great and necessary channels to promote your brand and reach your customers, but how do you know which channel is right for your company?”
Ask yourself...What does the customer want? What messaging speaks to them?
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Monique Crapper, Director of Marketing at eVestment, imagines herself in the customer’s shoes.
“Like any industry segmentation, understanding the different buyer personas and buying groups is very important,” she said. “We have to talk to our clients and prospects at the right time and with the right message – and that’s not easy! We’ve spent 2019 going back to basics with our messaging to ensure we are simple, clear and concise across all solutions. When we put ourselves in our client’s shoes, there is a lot of noise. So bombarding them with a hundred messages doesn’t work.”
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“We want to hit [the consumer] with one clear message and then, once they buy, we move them into the next bucket and bring them along that journey (and then the next and the next).”
81% of consumers use mobile banking apps on their devices to make digital payments due to its convenience. Banks need to constantly observe user behavior on banking apps and optimize the user experience.
2. Explore digital marketing opportunities to understand customer profiles and personas.
“As an expanding global and increasingly connected world, we are becoming more digital-first so it is critical that fintech’s, financial firms (and other organizations) invest in the right places and master digital marketing,” shared Allison.
She continued, “You may spend time and money ‘mastering’ LinkedIn to reach an audience in say, China, only to find out, they don’t use it! Spend time understanding your customers - how they use your website, how they find information, and what they are looking for and start to build your digital strategies and presence to meet them where they are.”
Use tools like Lucky Orange, FullStory, and Google Analytics to track online behavior and understand user paths. Then, leverage that information to improve the user experience (UX) and to fine tune your overall digital marketing strategy.
3. Establish goals for each marketing strategy and tactic.
It is important to fully understand the benefit of a tool or “why” behind a campaign strategy - otherwise time, money, and resources are wasted.
“So often, marketers jump into things to check a box and say they are using a new tool or hopping on a hot trend, but have no idea what they are trying to achieve through it,” said Allison.
“Let’s take your website for example,” continued Allison, “what is the mission you are putting forth with your site? Is it to drive awareness? Draw in new customers to engage with your product? Drive leads for your sales team? Know where you want to start and which key indicators you are monitoring to know what is working.”
4. Leverage marketing automation to personalize the customer experience.
In order to stay relevant amidst the increasingly saturated market full of fintech startups, traditional banking retailers need to embrace automation so that they can deliver a more personalized user experience that delights their customers.
Personalization is everything, according to Tom Ellis, the CEO of Swarm Agency.
“The more we can tailor not just content and offers, but the entire experience to the individual, the more they trust and ultimately will convert and come back.”
Hector Pages, Vice President of Client Solutions at Response Media, told us that banks are behind from a personalization standpoint: “Relative to other industries, banks have been slower to adopt the mass personalization afforded by customer data activation platforms and artificial intelligence (AI) tools. But now, given the cross-sell and up-sell benefits that an integrated martech strategy provides, they are catching up.”
In fact, 46% of the largest fintech companies consider AI to be one of the most relevant emerging technologies for investment, according to the PwC Global FinTech Report 2017.
Hector continued, “Financial service firms, in general, and retail banks, in particular, are rapidly embracing marketing automation technology to prospect and convert new and existing customers with personalized, relevant content based on behavioral or life stage triggers.”
Allison emphasized the importance of a cohesive omnichannel experience saying, “In my role as head of marketing at a high growth vertically-focused payments company, we work with education, healthcare, and travel providers across the globe to solve and provide services for high-stakes payments such as paying your tuition, life-saving medical care, or that bucket-list vacation of a lifetime. If we can’t offer the consumer a choice and a great payment experience from our channels both online and offline, then we ultimately fail our customers and their customers.”
“If we can’t offer the consumer a choice and a great payment experience from our channels both online and offline, then we ultimately fail our customers and their customers.”
5. Use data + analytics to influence strategy and to empower customers.
On this point, Monique said, “Data is everything. We treat everything we do like a science experiment – it has to have a clear purpose/hypothesis, a defined owner and key metrics. At the end of each sprint, we review and make changes to enhance or improve (or kill if it wasn’t deemed successful). The part we have struggled with in the past is taking the time to reflect on whether a campaign or tactic has worked. We are very intentional about making sure our time is spent making the most impact.”
“We are seeing a real shift with our clients to using big data and insights to help tell their unique story and to help them better differentiate,” claimed Monique.
She then recommended reading Greg McKeown’s Essentialism: The Disciplined Pursuit of Less, to get a better picture of the impact that innovation has on companies.
However, data doesn’t just have to be leveraged by your marketing team…it can also be used to empower consumers.
“The asset management industry has long been built on relationships with investors and consultants where millions of dollars are invested based on a handshake,” Monique explained, “but that is all changing. Our clients rely on eVestment data and insights to help market their funds but also to prospect new business.”
6. Be transparent with customers.
Tom emphasized the importance of transparency toward customers, saying, “Understanding what questions the customer will have and answering those questions proactively shows the customer that you care about their point of view and helps build trust in an industry that stereotypically has a reputation for lack of transparency.”
“The easiest way to create frustration in a customer is not being proactively transparent across the board (intentionally or unintentionally). ”
Tom added, “Make things easy and understandable - which is one of the biggest challenges with complex financial products and services. Create an experience that explains fees and processes, enhance that experience with personalization, and make sure that the customer never has to search for information.”
“Be as transparent as possible with your customers and prospects in every digital channel you use to remain authentic and keep that trust in your brand.”
7. Invest in digital experiences… but don’t forget about the human element.
“Based on a recent study we did with a large lender, customers are continuing to want more self-service options,” Tom stated, “To be able to easily get answers online without having to pick up the phone is crucial to lowering frustrations, improving transparency, and improving the customer's overall experience.”
Allison also understands that self-service options are at the forefront of user experience evolution. “Think about how digitally connected we are today as buyers and consumers,” she said. “We want instant gratification and we demand that things be real time - whether that is payments, a response to an inquiry, making a purchase, and more.”
That said, consumers don’t want to be caught up in automated customer service loops indefinitely. They’re expecting more from companies - not only from a self-service standpoint - but also from a human standpoint.
“They want to know there is a human on the receiving end of whatever data, files, etc. they are sharing, and that the human is still handling the process,” said Tom.
Allison also emphasized the importance of the human element, even if it’s through a traditionally digital channel. “I personally love online chat as both a marketer and a consumer. I do almost everything over chat if I can.
As an organization, if you offer chat, then you have to commit to making that an authentic channel. For example, it is okay if you use a chat bot. In many instances, it is expected. Just be up-front about it with your audience.
As a word of caution, if you can’t provide real time chat, then why offer it? Nothing is more frustrating if I go to a website, navigate to “choose a chat” option, only to get a response that someone will get back to me in 8 hours. That is not real-time and it doesn’t meet the customer experience I had expected.”
Digital marketing may be transforming how traditional banking operates to its consumers, but one thing remains the same: the customer is always right.
Adapting processes based on observations of consumer behavior is absolutely essential for retail banks fighting to maintain relevance in an increasingly competitive landscape.
While adoption of marketing automation or investment in consumer research can seem like a high cost endeavor, it’s worth asking: What is the cost of inaction?
Thank you to Monique Crapper, Tom Ellis, Hector Pages, and Allison MacLeod for providing their perspectives on the transformation of digital and advice to marketing financial leaders. If you enjoyed this blog post, subscribe to the Setup newsletter to keep up with everything marketing and read more industry-related blogs.
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