Marketing automation is no longer just an industry buzzword. In fact, 91% of marketing automation users agree it is very important to the overall success of their online marketing activities.
Historically, the fastest industry adopters of marketing automation include software, internet, telecommunications, and business services. However, dramatic strides in digital advancement have shifted the world of retail banking like never before. With this, a change in consumer behavior and expectations have triggered banks to respond by redefining their traditional mindset of marketing.
In this blog, I will share the three main challenges the banking industry faces when engaging today’s modern consumer and how marketing automation is the key to overcome these challenges.
Seek Out Opportunities in Data
Most industries are far ahead of financial services with insight-driven marketing. This is surprising since banks and credit unions have access to significantly more transactional, behavioral, and demographic consumer data that would make other industries drool with envy. In fact, a 2017 Accenture study found that 73% of US consumers are willing to provide their banks access to personal and financial data in return for added benefits in the form of offers, reduced interest rates, recognition and custom financial advice.
However, despite ever-increasing volumes of rich data, most financial institutions struggle to ever profit from it. In fact, banks and credit unions only use a fraction of their collected data to generate consumer insights and enhance the customer journey. Research reveals that less than 50% of banks analyze customers’ external data, such as social media activities and online behavior and only 29% analyze consumers’ share of wallet—the key measure of a bank’s relationship with its consumer!
What does this mean for the banking industry?
According to research by Narrative Science, the single biggest barrier to big data success among financial services firms is the existence of data silos followed by the lack of time and recourses needed to analyze and derive insights from data. With marketing automation, banks can now realize the promise of big data by obtaining a 360-view of their customer in real time. This allows them to capture and manage data from a vast array of sources and marry consumer insight with marketing strategy in order to enhance customer engagements and identify new upsell and cross-sell opportunities.
Use of Data to Define the Customer Journey
As the importance of leveraging big data in the banking industry rises and it becomes collectively agreed that consumer insight is an important differentiator against competition—there still seems to be a long way to go.
Unless consumer data can be used to understand the customer, look out for the customer, or reward the customer, the data insight is of limited value. Fortunately, with marketing automation, it now possible for banks and credit unions to use data to develop actionable insights and provide engagements that are relevant to the customer’s stage of life and immediate financial needs.
So, what does the intersection of consumer data and marketing strategy look like?
Scenario #1: Tyler Clark is a college student looking for student financial assistance and lives in Texas. He googles “student loans Austin Texas”, visits United Heritage Bank and is presented with a banner ad for college financing.
Scenario #2: After graduation, Tyler gets his first job and is in the market for a house. He visits his credit union’s website to read about their home loan offers but decided to hold off. Later while on Facebook, he is targeted with an ad from his bank offering a special home loan offer.
Scenario #3: Tyler is growing up and going through many stages of life. Time is becoming more precious. He receives a direct mail piece from his credit union offering investment options and assistance in opening a retirement account.
What does this mean for the banking industry?
The traditional marketing funnel is dead which means that it’s becoming increasingly important for banks and credit unions to develop awareness of the customer journey in order to know where and when to market to customers when something triggers the need for financial services.
Unfortunately, research indicates that only 37% of customers believe that their banks truly understand their needs and preferences. This being said, many predict an immense rise of AI-based technologies that will provide the banking industry with the ability to automate and analyze immense amounts of data and apply it to the customer journey at record speed.
Embrace Emerging Channels
Digital banking has come a long way since it was first introduced in the 1980’s. Then, you needed a landline to access account balances. Today, the ability to transfer funds, make payments, and deposit checks is at your fingertips. As technology continues to advance, so will consumer behaviors and expectations, challenging banking providers to rethink their strategy and transform the customer experience.
The migration away from brick and mortar banking began years ago and will surely escalate in 2018 as digital engagement becomes easier and consumers place a greater premium on their personal time. A Forrester study shows that in just a 5-years, omni-digital behavior (digital only) grew from 27% to 46% and they also predict that most financial institutes will not even see half of their customers, members or clients in 2018 due to digital advancements.
What does this mean for the banking industry?
Creating a connected customer journey across all channels is now vital to engaging and retaining consumers. However, most banks find it challenging to create a single view of the customer which is compounded by the noise coming from multiple channels. In fact, a study shows that only 20% of consumers feel the services they receive is of the same quality across all the communication channels they use with their financial providers and most marketers admit that about half of their campaign messages are identical broadcasts from one channel to the next. There is a distinct difference between casting the widest net over multiple channels with the same message versus creating an inter-related experience across channels to engage with consumers on a holistic level. Marketing automation allows banks to connect and associate multi-channel communications to each other for the purpose of creating an integrated experience.
Bottom Line
Shifting consumer behavior and expectations will continue to evolve at an exponential level. With this, so will the challenges being faced by the banking industry, forcing many to rethink strategy and transform the consumer experience—in an exciting way! Marketing automation software will be the driver that enables the banking industry to propel their use of rich consumer data in order to seek out new opportunities and redefine the meaning of a cross-channel consumer relationship. Marketing automation technology is no longer a nice-to-have for the modern marketer—now it’s a must-have. And, financial institutions are no exception.
Are you a bank or credit union who has seen success using marketing automation? What improvements have you seen recently? Or, are you a consumer and have seen the downside of impersonal communications or the benefit of personal ones from your financial institution? I’d love to hear about your experiences in the comments below.