The banking and financial services industry continues to go through significant change. Consumers have more and more options outside their financial institutions every day. Internet giants like Google are now competing in the mobile wallet arena. And customers are demanding more and more cohesion across all the channels they use to bank.
Trends play a direct role in marketing and communications strategy development. They force us to think about where the consumer is coming from, as we develop our communications and tackle obstacles they need to overcome. Here are three of the latest trends in bank marketing, and suggestions for transforming these banking trends into marketing opportunities.
1. Peer-to-peer payments are forecasted for significant growth.
In a banking industry outlook report, KPMG estimated the peer-to-peer payments market at $17.1 billion1. Once a bank adapts this as a revenue stream, the challenge comes in motivating consumers to use it. Peer-to-peer payments aren’t something customers may innately understand. Your financial institution needs to not only make your customers aware of this functionality, but also show them HOW to use it. It isn’t as simple as “build it and they will come.”
For most financial institutions, basic online payments have grown in usage, but this didn’t come without a significant effort. Adoption marketing has proven to be a critical key for many marketers. Our experience in supporting online and mobile bill pay adoption shows that a great effort can yield a great reward. We’ve been successful in increasing transactions 18% through lifecycle marketing efforts. This requires behaviorally based communications, reaching out to customers at multiple times in the lifecycle based on behavior they have or have not taken. Bank marketers need to take advantage of proven techniques in marketing to capitalize on the banking trend of growing peer-to-peer payments.
2. Online banking has grown, but banks will be competing with a number of banking competitive options in the future.
Today’s consumers are more digitally connected than ever before. Most financial institutions have witnessed the growth and banking trends of online banking and online bill pay. According to “The State of North American Digital and Multichannel Banking 2013,”2 consumers handle four top banking activities – bill paying, viewing balances and transactions, viewing statements, and transferring money – more frequently on the web than any other channel. Online banking has really taken hold, but the reality is that some consumers still aren’t using online bill pay to its fullest abilities, and in the future banks will be competing with mobile wallets, PayPal and many other competitive payment options.
An aggressive email marketing program can help consumers use your online banking and online bill pay. With the number of payment options, a strategy consisting of ongoing reminders and behaviorally targeted marketing communications will be critical in ensuring your financial institution’s payment options stay top of mind with customers. Leveraging this type of proven tactic can ensure your financial institutions stay on top of this bank marketing trend.
3. Customers expect an integrated banking experience, therefore communications need to follow.
Customers expect a certain level of service from their financial institution, whether they are banking online or in person. One bank marketing trend that Capgemini highlighted in its retail banking report was the need for more emphasis on seamless multichannel integration3. Banks will need to develop distribution strategies that take customer segmentation into consideration and profile customers more effectively to direct the right product to the right customer through the right channel.
This level of targeted marketing is likely to feel aspirational for many financial institutions. The reality is, however, that most banks have the possibility of using behavioral and product subscription to tailor communications. For example, using behavioral data about who has logged into their online banking account but never made an online bill pay transaction. Or target those who have made one online bill payment but not additional payments. We’ve actually found using this type of behaviorally based targeting to be successful and productive in driving conversions. Communications should be multichannel in nature and mirror what we know consumers want in terms of an integrated banking experience.
Learn more about how your financial institution can capitalize on these bank marketing trends and take advantage of a proven formula that’s used by more than 3,600 financial institutions. The complimentary Formula 3600 presentation will share:
1. “Banking Outlook 2014: An Industry at a Pivot Point,” by Brian Stephens, KPMG, 2014
2. “The State of North American Digital and Multichannel Banking 2013,” by Tiffani Montez, Forrester Research Inc., 2013
3. “Trends in Retail Banking Channels: Improving Client Service and Operating Costs,” Capgemini, 2012