Bank marketing has never been so complex. As technology advances and consumers become even more fickle, bank marketers are faced with a number of challenges in reaching and engaging with their target audiences. In this article, we will explore some of the most pressing challenges that bank marketers are facing in today’s digital landscape.
1. Competition from Fintechs
The rise of fintech companies, or neo-banks has disrupted the traditional banking industry by offering customers new and innovative ways to manage their finances. Today’s neo-banks offer a digital-first experience, charge little to no fees, provide more ways to help improve financial health and generally can approve loans faster than traditional banks.
While their service offerings may be slightly more limited, neo-banks often make up for this by offering their customers more ways to improve their financial health such as budgeting tools and faster access to paychecks. They also offer new peer-to-peer payment tools. Today’s neo-banks are attracting younger consumers as well as those who have traditionally avoided financial institutions.
To remain competitive, bank marketers must find new and creative ways to showcase the unique value that their institutions offer, such as personal service, trusted security, and established reputations. But that will not be enough. While traditional banks are investing in technology, they need to do so at a faster rate and not be afraid to implement new tools. To compete with the neo-banks, we recommend the following tactics:
- Real-Time Online Account Opening: Can new customers open an account at your bank without ever coming into a branch? If not, you will never be able to compete with the neo-banks. Consumers do not want the hassle of coming into the bank to open an account. Most people are at work during traditional banking hours. They usually handle their finances after work. Invest in technology that allows for real-time online account opening. Note — you will get pushback from compliance, especially regarding identity verification. But new outstanding identification verification tools are available today that compliance should get comfortable with.
- AI-Powered Conversational Marketing: Most banks have a very static website experience. Customers want their banks to provide them with financial advice and guidance, but they do not want to come into the bank to get it. Therefore, banks must be able to deliver this digitally. Enter, the AI-powered chatbot. Deploying a chatbot on your website will allow you to instantly answer questions and engage in conversational marketing. It will also allow you to collect invaluable data and deliver personalized, proactive marketing solutions. While a chatbot may not be able to answer every question that consumers pose, it is a great start and can provide you with a competitive edge.
2. Make it Easy to Switch
In order to grow your bank or financial institution, you likely need to convince customers to switch. Switching banks can often be a complicated and time-consuming process for customers, which is why many people end up staying with their current bank, even if they are not entirely satisfied with its services. However, with the right approach, you can make it easy for customers to switch, and in turn, gain new customers and increase customer loyalty. Here are some easy ways to make it easy for customers to switch over to your bank:
- Simplifying the Process: The process of switching banks should be as simple and straightforward as possible. Banks should provide clear, concise instructions and guidance to help customers make the switch and should offer support at every stage of the process.
- Transferring Funds and Accounts: Banks should make it easy for customers to transfer their funds and accounts to the new institution. This could involve offering direct account transfer services, or working with the customer’s current bank to facilitate the transfer process.
- Providing a Convenient Switch Process: Banks should aim to make the switch as seamless as possible for customers, minimizing any disruption to their day-to-day financial activities. This could include offering convenient account opening hours, online account access, and mobile banking services.
- Offering Incentives: Banks can incentivize customers to switch by offering special promotions or bonuses. This could include waiving account fees for a certain period of time, offering higher interest rates on savings accounts, or providing a cash bonus for making the switch.
- Building Trust and Relationships: Banks should focus on building strong relationships with new customers, and earning their trust and loyalty. This could involve offering personalized services and support, and providing regular updates and information on new products and services.
- Providing Continued Assistance: Banks should continue to provide ongoing support and assistance to new customers, even after the switch has been completed. This could involve offering regular account reviews, financial planning services, and access to financial experts.
3. Data Privacy & Security
In today’s digital age, online security is a major concern for individuals and businesses alike. Banks, in particular, hold a large amount of sensitive and valuable customer information, making them a prime target for cyber criminals. Bank marketers must be able to demonstrate that their institution is taking the necessary steps to protect customer data, while also leveraging customer data in a responsible and ethical manner.
- Investing in Cybersecurity Measures: Banks must invest in the latest cybersecurity measures to protect their systems and customer information. This could include implementing firewalls, encryption and two-factor authentication, and regularly updating software to address any vulnerabilities.
- Regularly Monitoring and Testing Systems: You should regularly monitor and test systems to identify any potential security threats. This could involve conducting regular security audits and running penetration testing to identify any weaknesses in the system.
- Educating Customers: It is crucial to educate customers on the importance of online security, and provide them with the tools and information they need to protect themselves. This could include offering online resources, regular security updates, and training programs to help customers understand the risks and how to avoid them.
- Responding Quickly to Incidents: In the event of a security breach, you must respond quickly and effectively to minimize the impact on your customers. This could involve having a clear incident response plan in place and working closely with law enforcement and cybersecurity experts to resolve the issue.
- Collaborating with Industry Partners: Because the large banks are investing so much into R&D, it is imperative that smaller banks work together and pool resources to share information and best practices on online security. This could help to identify and prevent emerging threats and ensure that banks are taking a proactive approach to protecting their customers.
- Ensuring Compliance with Security Regulations: Banks must ensure that they are compliant with all relevant regulations and standards for online security, such as the Payment Card Industry Data Security Standard (PCI DSS) and the General Data Protection Regulation (GDPR).
4. Budget Cuts
Marketing budgets are often the first to be cut during times of economic uncertainty, but it’s important to remember that marketing plays a crucial role in driving growth and success. As a result, Bank Marketing Officers must be prepared to push back against marketing budget cuts and make the case for why marketing is a vital investment for the business. Here are some ways to approach pending cuts:
- Demonstrating the Impact of Marketing: You must be able to show the impact that marketing has on the bank in terms of driving revenue and achieving other key objectives. This could involve using data and analytics to show the return on investment (ROI) of marketing initiatives, and showcasing the results of successful campaigns. If you are not collecting actionable data, start doing so immediately.
- Aligning Marketing Objectives with Business Goals: Bank Marketers must work closely with other departments and stakeholders to align marketing objectives with the overall goals of the bank. For some banks, new account openings are a priority. To that end, marketers need to work with the retail team and train the CSRs on sales techniques to close opportunities. This could also involve developing a comprehensive marketing strategy that incorporates the goals of the bank and communicating this strategy effectively to decision-makers.
- Seeking Strong Stakeholder Alliances: Bank Marketing Officers must build strong relationships with key stakeholders, including the CEO, CFO, and other department heads, to understand their priorities and concerns. This could involve regular meetings and discussions to share updates on marketing initiatives and their impact on the business.
- Offering Creative Solutions: Bank Marketers must be creative and innovative in finding solutions that meet the needs of the business, while still allowing for a robust marketing budget. This could involve exploring alternative marketing channels, such as digital and social media, which can offer cost-effective ways to reach and engage with target audiences.
- Making the Case for Long-Term Investment: You must provide good reasons for investing in marketing for the long-term, rather than just focusing on short-term cost savings. This could involve highlighting the benefits of building a strong brand, generating customer loyalty, and driving long-term business growth.
5. Retaining Existing Customers
With a recession looming, it has never been more crucial (and cost effective) to retain your existing customers. Bank marketers must have a deep understanding of our customers, including their needs, preferences, and behaviors. Here we explore various ways banks can do a better job keeping their current customers happy:
- Adapting to Consumer Behavior: Bank marketers must stay ahead of customer trends and changing customer demands, and be proactive in adapting their offerings to meet these demands. This could involve closely monitoring customer behavior, staying up-to-date with industry trends, and being responsive to customer feedback.
- Knowing the Importance of Personalization: Personalized services and support to customers has never been more important. Tailor your offerings to meet the unique needs of each customer. This could involve offering customized financial plans, personalized investment advice, and a dedicated customer service team.
- Providing Innovative Products and Services: Offering competitive products, rates and services that meet the needs of their customers is critical. This could involve offering innovative financial products, flexible loan options, and competitive interest rates.
- Seeking Solid Customer Relationships: We can do more to build strong relationships with our customers. This could involve regular communication (such as a regular email newsletter) and engagement and providing customers with valuable and relevant content, such as financial planning tips and educational resources.
- Ensuring Customer Satisfaction: Are you measuring your customers’ satisfaction? If not, you need to start. Bank marketers must ensure that their customers are satisfied with their services and take steps to address any concerns or complaints. This could involve regularly surveying customers to gauge their satisfaction and providing prompt and effective resolution to any customer issues.
6. Staying On Top of Trends
With technology and consumer behavior adapting and changing so rapidly, it has never been more crucial that you stay on top of these changes. Here are a few ideas that may help:
- Monitoring Industry Trends: Obviously, we must monitor trends and stay up-to-date with the latest industry innovations, both in the banking sector and in related industries. This could involve attending industry events and conferences, reading relevant trade publications, and networking with other marketing professionals.
- Analyzing Customer Data: Again, if you are not currently collecting data, now is a great time to start. Collecting it, however, isn’t enough: you must also analyze your customer data to gain insights into customer behavior, preferences, and trends. This could involve using customer surveys, focus groups, and advanced analytics tools to identify key trends and customer segments.
- Build Customer Connections: There are lots of ways to stay connected with your customers. It starts with simply talking to them and asking questions. I will often stand at the check-writing station in a branch and start up friendly conversations with customers and ask questions. It’s a great way to learn. Bank marketers should use surveys and mystery shoppers and review solicitations to proactively stay as close to our customers as we can.
- Keeping a Pulse on Competitors: Bank marketers must stay informed about the activities and strategies of their competitors and be proactive in adapting strategies to stay ahead of the curve. This could involve conducting competitor research, attending competitor events, and monitoring competitive marketing activities and customer engagement.
In conclusion, bank marketers today are facing various challenges in a rapidly changing digital landscape. From competition from fintechs, to budget cuts, data privacy and security, retaining existing customers, and staying on top of trends, it can be difficult for bank marketers to navigate these challenges and achieve success. However, by implementing best practices such as real-time account opening, AI-powered conversational marketing, and other practices mentioned in this article, bank marketers can overcome these challenges and achieve success in today’s competitive banking environment. Ultimately, the key to success for bank marketers is staying informed, being proactive, and adapting to changing customer needs and trends.