Many years ago when I moved from major consumer brands to become a marketer in financial services it felt like going back to the 19th century. The concept of “customer” was hardly recognised, and products were fossilised by legacy systems. Nothing could be more different today. Financial services are now among the most dynamic and competitive of all markets driven by a maelstrom of digital opportunity and challenge.
Marketers are now a powerful force in financial services, using digital enablement to reshape financial services to the benefit of customers. This was recognised as a matter of survival by the largest players as nimble digital native start-ups, “fintechs” started cherry picking customers with highly innovative solutions. Now the ecosystem is more complex as large players fight back with scale innovation and sophisticated engagement while the pace of transformational change accelerates from incremental to exponential.
In this perfect storm what is the role for marketers? How is digital marketing reshaping financial services?
Digital transformation in financial services
The initial force for change came from start-ups in the fintech sector which has today become the UK’s strongest start-up sector, attracting £15bn of equity funding. The approach was to unbundle the comprehensive traditional services, by focussing on the simplest and most profitable products and customers that were cross subsidising the rest. The largest fintech players such as Atom, Monzo and Starling selected consumer payments and rethought the offer in digital terms.
Even as start-ups they understood the importance of brand in building empathy and trust, and of peer recommendation through social media to generate trial. The traditional customer experience was considered end to end and in many cases moments of truth (MOT) were found where from the customer perspective there were barriers of convenience and effort, or important features were simply missing. This customer centric approach to looking with fresh customer’s eyes invites radical innovation. By simplifying the customer’s journey with apps that make sign up and use simple and transparent the whole offer becomes more attractive.
With the core customer offer in place further digital solutions are now offered such as loans, mortgages, and small business products. Without the need for physical branches the economics are transformed, and these businesses are now approaching profitability. There are literally thousands of other fintech start-ups exploring niche solutions through customer apps and specialist business solutions in a rapidly evolving ecosystem.
Meanwhile the traditional players have responded with extraordinary dynamism that utilises the rich data held within their customer bases, their heavyweight technological prowess, new found agile processes and sophisticated digital marketing. The transformation away from traditional branches, cheques and even cash is well advanced, accelerated still further by Covid. Initial concerns about protecting profitability have been swept aside by customer demand. Customers are lapping it all up – we have passed the point where consumers and businesses in all segments are hesitant trying out new digital innovations. This intersection of technology opportunity, commercial drive and customer trial is upending the long-accepted market structure.
Digital marketing drives customer centricity
In this highly competitive market how can marketers ensure their brands are memorable, with stand-out propositions? Digital enables customers to shop around and compare offers, immune from sales pressure, less trusting and less loyal while established brand names in financial services struggle to retain customers through faltering brand trust and cyber security.
Digital marketers are taking responsibility for interpreting technological capability into attractive customer solutions that are easy to use, establish multiple touch points and add value for customers. The financial services digital marketer must challenge the organisation to be customer centric, understanding and engaging customers, designing compelling digital propositions, user experience (UX) and conversion. This is an end-to-end engagement from defining need, creating compelling propositions, defining the customer journey, and ensuring all digital touch points across the lifetime are smooth and easy. In the digital world the customer journey is no longer a simple linear funnel, but instead is a complex series of small interactions where engagement and trust are built, and customer loyalty won through each encounter.
In the early days of fintech it seemed that early adopting customers would be digitally savvy millennials, but this characterisation is outdated as the transformation goes mainstream. Digital financial services solutions extend across age groups, small businesses, and enterprises. For example Visa offers a pre-paid card and app called gohenry with parental controls for young people aged from 6 to 18 years which helps safely introduce digital payments and saving. Barclays has since 2013 provided help through their Digital Eagles programme to mostly older customers who need help getting online and comfortable using digital solutions ensuring inclusivity as branches are closed.
Future trends in financial services digital marketing
Financial services marketers are at the forefront in applying sophisticated techniques in digital marketing and sales engagement. Digital marketers have always been concerned with customer acquisition through pay per click advertising, SEO, content, and social media campaigns, but a new layer of customer centric capability is now being successfully explored.
It is clear that customers desire a single experience where a timely offer is personalised and even individual. Financial services marketers are deploying artificial intelligence (AI) to explore the predictive capability of their large historic datasets, data collection through apps and real time digital customer behaviour. These predictive analytics enable tailored timely offers to be created and proactively served to the customer to capture the moment before they research competitors or lose interest.
Digital customer behaviour now grazes omni-channels including social media, apps and YouTube accumulating momentary interest and background consideration. Interest may trigger instant research and predictive and proactive offers enables immediate progress towards purchase. For instance, predicting current interest in a house or car purchase can enable an individual pre-approved loan offer to be presented to the customer reducing the purchase barriers and pre-empting exploration of competitors. Making the loan application digitally simple on a smartphone and providing instant answers to questions via a 24-hour chat-bot may be enough to close the sale.
Financial services have often been accused of making their products overly complex and hard to understand. The new breed of apps and services have outstanding usability and transparency. Recognising that education should come before a sale, financial marketers are now producing highly accessible content that engages, educates, and persuades in manageable bites. There are clear lessons from the very best content writers such as building credibility using facts and figures, careful use of keywords, avoiding jargon and making the material visual. All these characteristics work well in social media and apps capturing engagement data to be use for follow up and predictive analysis.
Some of the most popular financial services apps consolidate a view of spending across providers with personalised insights, custom budgets and tracking so that users feel in control of their finances and can be confident in planning ahead. Mint, owned by Intuit, is for instance the most downloaded financial services app in the US, and is also available in the UK.
As an example of how complex financial services are being simplified by digital transformation several fintechs are developing end to end digital mortgages. Molo and MQube have rethought every step in a process that feels like it has barely changed in decades. The result is astonishing – a legally binding mortgage in minutes instead of weeks, and all digital.
Financial services may have been slow to recognise the customer centric revolution and bring marketers into the heart of their business, but their business model is now radically different from even a decade ago. Challenged by digital native fintechs the incumbent players have transformed their DNA with a digital first mindset. Financial Services is now driven by sophisticated digital marketers, who deliver customer expectations for seamless, real time, integrated and personalised experiences. This can only be good for customers, and for marketers at the forefront of the new industry.
What do you think?
In your opinion, what are the most important digital marketing strategies for financial services? Leave a comment below to share your thoughts.
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