Financial institutions must combine data, analytics,
technology, and marketing automation to deliver a personalized experience that
is customer-centric. Engagement must be based on real-time changes in consumer
behavior, avoiding traditional product sales pitches but providing proactive
recommendations that are fast and easy to deploy and respond to.
To a greater degree than ever, physical and digital channels
are being integrated through data, advanced analytics and modern technologies.
Consumers no longer accept being “forced” to use a banking channel they don’t
want to use, or to have other interactions be time consuming and difficult.
These expectations, combined with the level of personalization provided by big
tech and fintech firms, are putting pressure on the marketing departments of
financial institutions to catch up.
Banks and credit unions must provide insight and intelligent
decisioning in real-time, personalize at scale, and understand the entire
customer journey both within and beyond the financial institution. The result
will be engagement and communication that will be more intelligent, more
customer-centric, and more timely than has been possible before. This will
create a level of trust that will result in an improved ROI and an experience
that will humanize digital and physical interactions.
The financial institutions that learn to leverage data,
advanced analytics, modern technology, and marketing automation will be the
winners in a post-pandemic world that has made consumers more aware than ever
of the digital customization potential from organizations such as Amazon,
Netflix, Instacart, and others that incorporate marketing agility into their
business practices, saving consumers time and effort.
Used effectively, marketing automation can provide financial
institutions the foundation for finding time-sensitive opportunities, allowing
for real-time decisioning and delivery of messaging, while reducing costs of
execution and improving trust and loyalty. Most importantly, by sharing the
insights created across the organization, employees will feel empowered and
digital experiences can become humanized.
Consumers Equate Speed, Simplicity and Personalization
With ‘Caring’
In a recent interview with marketing and customer experience
guru Jay Baer, he referenced that in today’s increasingly digital world,
consumers view firms that provide fast and easy connectivity – and personalize
the experience – as being caring. He also mentioned that location is no longer
a strategic advantage when a consumer can access almost anything on their
phone.
Prior to COVID, the digital revolution was already underway
— the pandemic just sped up the transition and broadened the audience of who
wants the speed and simplicity of digital engagement. Today, virtually everyone
starts their shopping process with a search. When consumers do their own
competitive shopping, and find the information they want, without ever visiting
a branch or calling customer service, banks and credit unions need to make sure
they are using the right technology solutions to accommodate this digital
shift.
Financial institutions that believe the majority of
consumers prefer to go to a branch to open an account, cash checks, deposit
funds or even inquire about products and services are, in most cases, biased by
the past and are overlooking or ignoring the future potential of digital. Many
times, consumers visit a branch because the digital experience is not as simple
or as fast as desired. More than ever, consumers will simply abandon a purchase
they want to make digitally as opposed to traveling to a branch. In fact,
research by the Digital Banking Report found that abandonment of new digital
account openings are as high as 60% to 80%.
Build Engagement and Trust Through Technology and
Automation
Consumer’s preference for the use of their personal
information is directly correlated to the value they receive in exchange for
their personal information. Financial institutions must leverage insights, AI,
machine learning, and predictive analytics to provide both ease of engagement
and intelligent recommendations similar to Apple, Amazon, Spotify and Netflix.
There also needs to be clarity as to how insights will be used on the
customer’s behalf.
In a survey of banks and credit unions by Bottomline
Technologies, it was found that many financial institutions are not optimizing
the use of data and technology the way consumers prefer. Despite an
overwhelming belief that proactive engagement and delivering personalized
guidance were requirements for a positive customer experience, only three-fourths
of respondents at large organizations, and less than 50% at smaller
institutions, said they have the tools to achieve these goals.
The report, “The Rise of Intelligent CRM in Banking,”
illustrates the importance of using data, analytics, automation and digital
technology, it also found significant performance gaps in delivering the
experiences consumers desire. The report also illustrates the large variance in
deliverability between small and large financial institutions.
Financial Institutions are Uniform in Their Desire to
Serve
According to the Bottomline research, when discussing the
goals for customer relationship initiatives, most financial institutions
prioritize improving customer relationships, increasing product penetration,
providing personalized advice and being able to proactively engage consumers.
As consumers became even more familiar with digital-first organizations, they
became aware of the level of personalization possible, even from small
retailers and restaurants. Their tolerance for less that this level of
personalized attention will definitely impact the success of organizations not
meeting these expectations.
One of the major challenges in building a uniform 360-degree
view of the consumer is the confidence within the organization that the data
being used is accurate and complete. With data silos and data quality issues, a
holistic view of the consumer, small business or corporate relationship is
difficult to ascertain without a strong data governance process.
Ability to Leverage Customer Insights Differs by Asset
Size
When Bottomline asked organizations whether they had the
tools to effectively engage clients, there was a significant difference in
capabilities between large and small financial institutions. For example, while
almost 75% of organizations with over $20 billion in assets said they had the
tools to proactively engage clients, the number plummeted to less than half of
organizations under $20 billion. In addition, 55% of smaller financial institutions
said their ability to monitor customer relationship health and identify growth
opportunities was weak or far behind their competitors.
One of the primary reasons for the disparity in being able
to understand and communicate effectively to customers is that most firms don’t
have an enterprise CRM system. Making matters worse, the percentage of smaller
financial institutions having an enterprise-wide CRM is significantly below
their larger peers.
The impact of not having a robust CRM tool impacts both the
confidence in data and recommendations, but also the speed to market for
time-sensitive opportunities. The lack of both scalable solutions, and ability
to deploy across multiple channels, places those firms without a sophisticated
CRM system at a tremendous disadvantage from both a cost and revenue
perspective.
Customer Experience Solutions Need an Upgrade
It is not just the technology that is stuck in the past, it
is the way technology is being used as well. Most organizations continue to build
marketing initiatives around products as opposed to consumers. Even with the
best targeting, if the funding and marketing objectives are focused on product
sales, the consumer loses. In addition, if digital engagement is focused on
‘making digital account opening possible’ as opposed to making the process fast
and easy, the consumer will start their relationship elsewhere.
As can be seen below, most organizations continue to focus
on legacy marketing and operational opportunities as opposed to leveraging data
and technology for improved digital experiences.
Modern CRM systems do more than just drive sales. They can
improve the customer experience by helping consumers manage their finances more
effectively based on real-time insight and marketplace opportunities. Moreover,
today’s CRM systems can build loyalty by using data and technology to drive
product and service recommendations, improve customer service, improve response
times, and personalize customer communications across all touchpoints.
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