Content Series by Pelatro
Banks have successfully adopted digitalization to meet the evolving and dynamic customer behaviours. This may sound interesting, but the reality is a bit far from success. Customers are no longer satisfied with the mere availability of digital channels, automation, and self-serve tools to solve their problems. They expect banks to understand and anticipate their financial needs, proactively provide personalized solutions and be more empathetic in their engagement approach. Privacy, security, and trust are the indispensable elements of the banks’ customer-centric engagement approach. In response to the changing market dynamics, a large U.S. multinational bank has revamped its marketing strategy to focus on developing trust and addressing customer needs. The bank aims to rebuild its reputation and strengthen customer relationships by prioritizing transparency and ethical practices.
Let us look at what worked and what didn’t for banks in Marketing in 2023 and the key learning they need to take into 2024 and beyond.
1. Emotions over ease of use
How the customer feels about an experience is more important than the outcome or effectiveness of that experience. Based on a recent survey, feeling valued drives higher loyalty in direct and multichannel banking in the U.S. 87% of direct banking customers stated they would remain loyal to the brand if they felt valued. The trend continues for higher purchasing frequency and advocating for the brand.
2. Data-driven Personalization
Banks and credit unions that effectively harnessed customer data to understand behaviours, preferences, and life events were able to craft highly personalized offers. Capital One leveraged ML algorithms to analyze spending patterns and financial behaviours to provide personalized product recommendations. Another bank employed advanced analytics to analyze customer spending patterns. By identifying customers with high travel expenditures, the bank launched a targeted campaign offering exclusive travel rewards credit cards. The result was a notable increase in credit card acquisitions and customer satisfaction.
mViva’s advanced Analytics and AI-ML capability help banks deliver data-driven personalization at scale. Know more.
3. Omni-Channel Marketing Integration
Seamlessly integrating marketing efforts across various channels provides customers with a cohesive and seamless experience. Many implemented a comprehensive omnichannel strategy, aligning their online, mobile, and in-branch marketing efforts. Customers could seamlessly transition from researching offers on the website to engaging with personalized promotions via the mobile app. This approach not only increased customer engagement but also strengthened the overall brand image.
4. AI-Powered Predictive Analytics
Many have leveraged AI-powered predictive analytics to anticipate customer needs and preferences and deliver relevant and personalized offers at the right time. One medium-sized bank utilized machine learning algorithms to predict which customers would likely seek mortgage loans in the coming months. By proactively reaching out with tailored mortgage offers, the bank not only increased its mortgage portfolio but also fostered a sense of proactive customer service.
Learn more about how to implement AI-powered predictive analytics at your bank. Request for demo.
5. Focus more on educational content
Many companies have invested in educational content to promote financial literacy, which is rising after the pandemic. This has boosted customer loyalty and established trust in institutions that offer informative and easily digestible content.
6. Hybrid model gets the preference
Although the trend suggests digital banking is the future, the data shows otherwise. A hybrid model exceeds the CX score compared to a purely digital or physical model. This shows that human experience still forms an integral part of the overall banking experience for customers.
7. Automation is good when well thought through.
Automation brings a lot of success in terms of cost savings, time to market, resource utilization, and more. Yet many faced challenges due to overreliance on automation. Many financial institutions automated their marketing campaigns but failed to personalize the communication. Many customers were disengaged and frustrated because of impersonal and poorly targeted offers. This led to lower CSAT and a higher opt-out rate from marketing campaigns.
8. Be mindful of Regulatory Compliance
In 2023, some financial institutions faced setbacks due to inadequate attention to regulatory compliance in their marketing campaigns. Violations of privacy and data protection regulations to gather more customer data resulted in fines and damaged customer trust.
Taking the learning from 2023 into 2024 and beyond. What Marketers need to keep in mind when creating a Marketing action plan for 2024.
- Balance automation with a human touch- While automation is a valuable asset, it is essential to balance it with a human touch. Personalized communication and customer engagement should not be sacrificed to pursue efficiency. Humanize automated interactions where possible and create channels for customers to connect with human representatives when needed. For example, in an attempt to hyper-personalize, marketing automation can mistake a one-time purchase, such as a friend’s birthday gift and send a similar product recommendation, assuming it is a regular buying pattern. This can lead to frustration and a negative customer experience, as the bank’s attempt at personalization becomes intrusive and misses the objective.
- Leverage Customer 360 to gain deep insights– Knowing and understanding your customers will be the key to delivering hyper-personalization in 2024. Utilize customer feedback, social media interactions, and transactional data to better understand customer preferences and expectations. Design campaigns based on the insights that resonate well with your customers. The objective of Marketing has changed from just selling products to helping customers be more financially stable, plan their expenses sensibly and enjoy financial freedom at the same time. Banks with holistic customer understanding will reap higher benefits than banks focused on selling without knowing their customers.
- Create value-driven customer journeys: Banks must shift from one-time or reactive interaction models to more proactive and journey-based interactions. For example, if Susan is looking for a mortgage, banks can understand her requirements and aspirations and recommend the right product rather than directly sending her an attractive offer. An exploratory journey to check her eligibility, sharing current mortgage trends, or even hot investment locations will further strengthen her trust in the brand.
- Establish cross-functional collaboration– Collaboration will be the key to achieving organizational goals. Marketing teams must work closely with I.T., data analytics, and customer service teams to ensure a seamless customer experience. Cross-functional collaboration enhances the ability to deliver cohesive and integrated experiences.
- Enhance data security to increase trust– As the reliance on customer data continues to grow, banks and credit unions must prioritize robust data security measures. Implementing advanced encryption, regular security audits and compliance with data protection regulations are crucial steps to safeguard customer information and maintain trust. Privacy and security will be crucial for brands to differentiate them from others and more trust will bring in more business.
- Implement Advanced Analytics and AI /ML– If not done already, this should be your top priority in 2024. It can offer deeper and more accurate insights into customer behaviours and needs, enabling you to provide personalized next-best offer recommendations in real-time. Tools like AI-powered chatbots and virtual assistants can enhance customer interactions, providing real-time assistance.
Marketing is not just about sending offers and promotions to customers. It is an interaction between two parties where each expects to derive value from it. Pelatro’s mViva has been designed to keep this in mind. It helps you bridge the gap between customer needs/preferences and business objectives to achieve the best possible outcome for both stakeholders.
My-Marketing-Muse is a content series started by Pelatro to provide marketers with the latest and best learning in marketing in BFSI. You can follow this series to get regular updates to help you plan your marketing and achieve business goals.
