July 17, 2019 Richard Jones

Banks have more personal data than anybody, but why don’t they use it in their marketing messages?

With ‘big tech’ looking to take over the finance segment, isn’t it about time banks started to take advantage of the rich customer data they have in order to deliver personalised marketing to consumers – asks IMMedia’s Richard Jones, in advance of his panel discussion on the topic at the Mumbrella Asia Finance Marketing Summit in Singapore on August 29.

Your bank actually knows you as well as, if not better, than any technology platform such as Google and Facebook. Then why haven’t banks used customer data to create a better and more personalised experience when it comes to their marketing? 

With ‘big tech’ snapping at the heels of the financial sector, it’s high time banks used data-driven content marketing to better engage with customers and personalise their messaging and outreach activations. 

When was the last time you opened your banking app or any form of communication from your bank and found it personalised to your needs?  Can’t quite remember? That’s because it doesn’t happen as often as it should, if at all. 

Banks need to push harder to change that. According to the Boston Consulting Group (BCG) “for every $100 billion in assets that a bank has, it can achieve as much as $300 million in revenue growth by personalising its customer interactions”.

In the highly-commoditised world of banking and financial services (one loan is the same as the next), personalisation offers banks the chance to make each customer feel unique and privileged. Customers like choices, but they like to choose from a basket of options best suited to their needs.  

On the other hand, when confronted with too many choices, they often face ‘decision fatigue’ and may abandon the business transaction altogether. Jason Thomson, the GrabPay CEO for SouthEast Asia, asserts that today’s customers are spoilt for choice and the wide array of choice does not help anyone make up their minds. Therefore. it is important to offer an optimum mix of choices.  

In addition, today the case for data-driven personalised marketing is stronger than ever. The reason? Competition. Big Tech is coming for Big Bank profits. Financial pundits and regulators around the world have warned banks that the biggest threat to their profits in the future could come from companies such as Amazon and Apple. 

The signs of an industry upheaval are evident. Facebook’s recent announcement of its cryptocurrency Libra, expected to the introduced in early 2020, has rocked the financial world. Chinese firms such as Batu, Alibaba and Tencent are already very successful in making China’s e-commerce shopping cashless through online payment systems. 

These companies started with payments and moved into providing credit, insurance, and savings and investment products; either directly or in cooperation with financial institution partners. In China, both Ant Financial and Tencent’s part subsidiary, WeBank, provide lending to millions of small and medium firms. A strategy that ride-hailing company Grab is now following in Asia. The financial arm of Grab launched micro-lending and micro-insurance in Singapore in 2019. 

Banks are jittery about these developments – as they should be. Big tech companies have access to millions of terabytes of data on customer behaviour across millions of users – on their shopping, eating, travelling and entertainment habits. Tech companies put personalisation at the heart of their business model and use this data to offer new and relevant products, services and opportunities to their customers. 

Banks too have a 360-degree view of their customers as good as any technology platform. However, access to data is just half the game. The winning ingredient is knowing how to spin the data to hit the customer’s sweet spot. In this, tech companies have proved more agile than big banks.  

Sure, transactional content and campaign messaging (which ultimately focuses on how great the bank’s brand is, their promotions, credit card offers, loan rates and so on) has its place,  although this must be complemented with more real-life conversations around audience needs if banks are to truly engage with their customers. 

Back in the day, a customer could walk into a local bank branch, chat to the manager and get the personal touch that he or she needed. Now the same customer has moved a few cities and jobs, is juggling with mortgage, school and college tuition fees – and wants to holiday and travel regularly.  Meeting their needs, in real-time, is far more challenging. 

The touch-point is no longer the branch manager, but rather the smartphone in the customer’s hand that is used for social media, apps, and emails. In this new reality, how do banks create relevant conversations that allow marketers to make the most of every interaction? 

The answer is not entirely new. ‘Next-best-action’ – or NBA – marketing has been around for a while. The concept places the customer at the centre and targets communication and offers to meet the individual needs of the customer. 

What’s new is that today data-driven content marketing can take NBA marketing to a new level of efficient personalisation. With the right content that addresses customer pain points, in the formats they consume and through the platforms they are on, banks can provide the customer with information that is relevant and not ‘salesy’. 

Data-driven content marketing is burgeoning thanks to the capabilities offered by the latest artificial intelligence and machine-learning technologies that can help banks identify content themes, formats and channels; in order to help differentiate their content and engage in a more relevant manner with the target audience.  Enabling banks to create targeted and compelling content, these technologies ensure that banks are a part of the real conversations that customers are having.  

Rather than a bank with a product, be seen as a partner in your customer’s financial journey. And the pedigree and stability that banks offer for such a long-term relationship can be a differentiator when compared with fickle tech companies.

Banks have more than enough customer data at their fingertips. It’s time to use it to offer customers more enriching solutions. If you’re a marketer in the financial sector, there is no better time than now to start thinking about your content marketing strategy.