A New Challenge for Data And Technology in Financial Services Marketing - Improving Financial Wellbeing

By Brad Bateman, Head of Digital Marketing, ASB

Brad Bateman, Head of Digital Marketing, ASB

When you think about it, there are very few relationships with brands that come close the one you have with your bank. For many of us, we will stick with our bank one way or another for most of our lives. Through life’s ups and downs. The bank will be there. Very few major life events occur without some involvement from your bank. And it takes a lot to get us to move somewhere else. Significant events, such as marriage or buying a house can be a catalyst. Or when a bank doesn’t appreciate your years of custom, doing things like sending you special offers only for new customers

Because when you’ve been in a relationship for 10, 20, maybe even 50 years, you expect your bank to know a lot about you. Think about all of those forms you’ve filled out. Think about all of those interactions and conversations you’ve had. In fact, with the data your bank has, they should almost know more about you than you do. But as a bank customer I’m sure you know, this rarely seems to be the case.

Banks, like many organizations, are only really starting to make the most of the data available to them to better serve their customers. For financial services marketers, there is obvious excitement about what we have at our disposal and how we can help. And so we’ve spent vast amounts of time, money and resource cleaning up this data, as well as investing in the latest marketing and advertising technology to put it to work. And the results are there for all to see. We’re putting relevant solutions in front of customers at the right time, and they are responding.

"Focusing more on planning and guiding the customer toward the best outcomes for them individually"

However, this isn’t really what our customers think when they consider how much their bank knows about them. They expect the bank to remember each interaction with them and build on it next time. Not repeating the same conversation with different staff members. They expect their bank to be proactive in solving their problems and they expect their tenure to provide some benefit as special offers personalized to them. But most importantly – they trust that the products and solutions we put in front of them are right for them. Because if anyone is going to know, it’s your bank right?

Or do they have that trust? Sadly the reputation of the financial services industry in Australia and to a lesser extent New Zealand has taken a hit from the misconduct uncovered by the Australian Royal Commission. Governments and regulators are looking closely at how decisions around marketing and selling products to customers are made.

As a result, the paradigm is shifting once more for financial services marketers. It’s no longer good enough to deliver good customer experience and revenue. There is now a very firm requirement to focus on delivering good outcomes for customers in every interaction we have.

It is a difficult balance but it’s an important one. Sending a communication to a customer suggesting a higher interest bearing savings account is a great outcome for the customer. Suggesting ways they can pay off their home loan faster could save the customer thousands over the life of their loan. But as the balance of communication shifts away from selling and toward good customer outcomes, there can be concerns that revenue will be impacted in the short term. The flip side is that a customer base with a stronger financial footing will ultimately be better for business and society.

Marketing needs to be looked at through a completely different lens. Focusing more on planning and guiding the customer toward the best outcomes for them individually. Combining the vast knowledge we have of their situation with our marketing and advertising technology to deliver communications around the right personalized plan for them.

Old tactics are no longer fit for purpose. A propensity model can quite easily show us which customers are most likely to take up a personal loan offer. But overlay data based on suitability and the model suddenly takes on a very different look. There will always be a tension between can we, and should we. And the answer must always be ‘will the customer be better off.’

Marketing for good customer outcomes comes with significant complexity, and there is no room for error. Consistent messaging must be orchestrated across all customer touchpoints and re-calibrated instantly when a customer’s circumstance changes.

This requires a shift in the way we use our data and marketing technology. How, for example might you identify a customer who may need more support from the bank? How do you measure a good customer outcome at an individual level and feed this back into the system? There are enormous challenges, but these challenges are becoming real, and there is an expectation from customers and regulators that banks will proactively solve these problems.

After all of these years, the relationship we have with our bank is about to look very different. Soon they really may know more about us than we know about ourselves. The power of that information when used to its true potential – will be transformational, improving the financial wellbeing of customers no matter what their circumstances.

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