The digital advantage:
12 tips for financial services
Our financial services expert Ian Davis recently attended the Winning
Digital Marketing: Financial Services conference in London.
Here are his top takeouts.
Digital is front and centre of financial services strategy
Only a few years ago, it was enough for financial services (FS) brands to say they had a dedicated digital team. Today, however, they understand the need to sign up to full-scale digital transformation. This places them at the first of Altimeter’s Six Stages of Digital Transformation. At this point, digital transformation is in the Business as Usual phase. The successive five stages are: Present and Active; Formalized; Strategic; Converged; Innovative and Adaptive. At the final stage, the business is responsive to technology and market trends, recognizing the need for constant change.
Few FS brands, however, have reached the stage of being Innovative and Adaptive. Rather, most are somewhere on the journey to this destination. Typically, they’re either at the stage of experimenting with isolated pockets of Present and Active digital pioneers or at the Strategic/planning phase. This means that, in many cases, digital is still being nurtured in isolation from the core business. Here in these protected environments, FS brands are embracing new, agile approaches to innovation.
(…) in many cases,
digital is still being
nurtured in isolation
from the core business.
Digital marketing is a serious business
(…) FS brands must
move from talking
at customers to
talking with them.
A winning digital marketing function serves the key objectives of the business. It also uses a tone of voice that is authentic and matches its audience’s expectations of the brand. Finally, it produces content that is both contextually relevant and practically useful.
Conference speaker Lucy Donaldson, Lloyds Banking Group, explained how FS brands must move from talking at customers to talking with them.
Her 3Rs of digital content outline how brands need to interact with consumers in the digital age:
◦ Reach – big emotional brand engagement – for example, Lloyds Bank’s ‘By Your Side’ campaign
◦ Relationship – always-on content that shares passions with the customer and drives experience
◦ Reactions – responsive to the needs of individual consumers
To succeed in all three missions, FS brands need a real understanding of customers. And they need to place customers at the centre of their business.
We’re all familiar with the ‘traditional’ FS model of deeply siloed product divisions. It’s a model that is based first on selling products and second on customer needs. It’s a model that has had its day. And it represents the biggest barrier to creating the single view of the customer, which is needed to deliver the personalized solutions and experiences that customers expect in the digital age.
It’s not about the product
What is your purpose?
(…) financial services brands need to re-visit and re-define their core purpose.
As digital transforms their businesses, financial services brands need to re-visit and re-define their core purpose. They need to relate this to their brand and customer base. And they need to place their customers at the centre of their marketing objectives.
For example:
◦ Lloyds Banking Group is ‘Helping Britain Prosper’
◦ Nationwide is a ‘14 million members building society, nationwide’
◦ Aviva is ‘Defying Uncertainty’
Direct Line Group is no longer about selling cheap insurance via a more efficient business and distribution model, for example. It is now a serious partner that fixes bad things when they go wrong. And its advertising has changed to reflect this. The cheeky red phone on wheels has been replaced by the ultimate fixer: Winston Wolf. His red sports car serves as a strong brand artefact, ensuring continuity and brand recognition.
In recent years, interactions with FS brands have increasingly moved online. Brands need to understand their customers’ journeys. And they need to ensure that their customers’ experiences of these are aligned with their brand and marketing. To unlock the potential of digital, FS brands need to invest in the second and third of Donaldson’s 3Rs, Relate and Respond, through the delivery of personalized content and social interaction.
Experiences are marketing
touchpoints in the experience economy
Digital marketing changes the rules
(…) What works on TV
to deliver the emotional
hit and reach – the first
of the 3Rs – might not
work on digital.
Winning financial brands understand that digital has its own rules for success. What works on TV to deliver the emotional hit and reach – the first of the 3Rs – might not work on digital. Mainly because digital is watched on smaller screens, in a different context and with a different degree of attention.
Once they know the rules, winning brands must play an active role in controlling their digital marketing. Programmatic advertising offers the seductive promise of increasing relevance through real-time micro-targeting whilst simultaneously reducing cost. As a result, it has grown to become the de facto approach for digital marketing. Yet, as recent events have shown, more must be done in respect of transparency, viewability and brand safety. Brands such as MasterCard were showing leadership in this area before programmatic boycotts by FS brands hit the headlines in March 2017.
Segmentation is dead: Context is everything
In the experience economy, consumers expect brands to speak to them at a personal level in an emotionally engaging way. FS brands therefore need to have a deep and joined up understanding of their customers. Only with such information can they serve them the right message in the right way about the right need. It’s unlikely they can do this to a convincing level using a traditional ‘static’ segmentation.
Think about it this way. On a Thursday at 6 pm, I’m a business traveller in Amsterdam thinking about how to pay for my flight home. Events having led me to miss my booked flight by 30 seconds. On a Friday at 6 pm, I’m a dad taking his son to football practice. I’m chatting to other parents about kids’ screen time, saving for university and paying for house extensions. I’m the same person, but I have different needs and expectations from one day to the next. And it is these different needs and expectations that FS brands need to cater for.
I’m the same person, but I have different needs and expectations from one day to the next.
Social media is the new front desk
The new news is that social conversations are increasingly moving from public to private messaging.
It is where the digitally savvy live their lives and where many expect to be able to interact with brands. We’re all familiar with the complainers taking to social media to vent their problems and bypass the complaints process.
A mechanism needs to exist to deal with this practice quickly, but that’s mostly old news. The new news is that social conversations are increasingly moving from public to private messaging. What IBM Evangelist Jeremy Waite describes as ‘dark social’. Financial brands are starting to engage with dark social. At the conference, Barclays’ Samantha Gray showcased the business’ recently introduced service that facilitates customer dialogue via Facebook Messenger. Messenger chats are one way of addressing the third of Donaldson’s Rs: responding to the needs of individual customers.
Social media is
no laughing matter
Social is definitely a hot topic and there is a growing realisation that content posted on social media needs to be thoughtful and purposeful. If it isn’t, people will let brands know. What does this mean?
For one thing, brands don’t need to react to everything or (t)witter on inanely. FS brands carry with them associations of authority and seriousness. They need to recognize their role in people’s lives – both their social and personal lives. Not even the most loyal customer wakes up each morning and checks their FS provider’s Facebook feed.
Read our case stories to see how MetrixLab helps brands to identify relevant content topics through social media analysis.
Case story: Gaining insights into social media content and performance
Case story: Using social media to understand brand sentiment
Not even the most loyal customer wakes up each morning and checks their FS provider’s Facebook feed.
Chatbots are coming
(…) FS brands need to be able to speak with individual customers at anytime and anywhere they choose.
Winning digital FS brands need to be able to speak with individual customers at anytime and anywhere they choose. But how can the largest financial brands, with tens of millions of customers, facilitate individual level conversations 24/7? The big hope is that this can be done by leveraging chatbots and messenger services, powered by artificial intelligence (AI) and enabled with machine learning. These can deliver emotionally engaging as well as functional experiences. However, while chatbots and AI are at the top of the fintech hype cycle, deploying them successfully and convincingly is not straightforward. Financial services are highly regulated and some products meet complex needs that consumers struggle to engage with and understand. For now, despite regulatory enthusiasm, chatbots are best used for simple transactional queries and FAQs, rather than fully fledged advisory services.
Embrace your inner love of compliance, risk and regulation
This is the stuff of financial services. It comes with the territory and for good reason. Don’t use it as an excuse for not doing new and innovative things. Miles Eames, of Old Mutual Wealth (and formerly of Barclays), underlined this point in his conference address.
Eames argued passionately that embracing compliance and engaging related stakeholders pro-actively can transform the role of this and similar functions. Through the use of pre-approved guidelines and ongoing dialogue, compliance can move from reactive process blocker to enabler.
(…) compliance can move from reactive process blocker to enabler.
Now that digital is central to financial services, digital marketers need to demonstrate their contribution to the bottom line. This requires new approaches to digital measurement. Approaches that go beyond the traditional and often simplistic metrics of slow moving, big-ticket tracking programs.
There is a better way to win at digital marketing.
Speak to MetrixLab to find out more.
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By Ian Davis,
Financial Services Director
at MetrixLab
