Executive RecruitingFinancial Services
November 2020
Reimagining Financial Services – Marketing in The New Strange
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COVID-19 was a shock to the financial services industry, specifically in the increasing role of digital transformation and a shift in how you serve and connect with customers. But in 2021, we could be entering a second phase of the crisis that could be even more impactful than the first one.
Though the future is unclear, financial services should start preparing for extended effects similar to what we experienced throughout 2020. In a recent webinar, Chameleon Collective Interim CMO Uwe Hook talks about four significant changes he noticed in 2020:
In a world where cash is suddenly no longer king, many financial service providers saw a massive shift from traditional banks to digital players. More people started shopping online beyond specialty items, as staples like toilet paper and hand soap had been wiped off their local stores’ shelves. Consumers were trading their dine-in restaurant experiences for food delivery and curbside services, both of which are easier to obtain with digital payments.
These trends increased the need for digital payment options, along with the convenience and value that come with them. As a result, Hook reveals that brand loyalty saw an overall decline of about 75% as consumers opted to purchase from first-available suppliers rather than long-time favorites. These effects are likely to impact banks and financial services, especially if their current providers have not yet embraced digital transformation.
Hook shares that during the rapid switch to digital financial services, the industry as a whole saw an evolution that essentially condensed ten years’ worth of changes into a span of just two months.
The digital transformation isn’t reserved just for banking, either. Hook notes that companies across industries have had to embrace a new way of doing business, citing an acceleration in remote work and getting used to working in a new way.
In February 2020, the meticulously crafted marketing strategies that many financial companies had spent weeks or months preparing in 2019 were well underway. But by the following month, those strategies felt ancient and obsolete. New priorities took over, and weaknesses within marketing organizations were left exposed. Hook says that the one thing that became clear is that too much time is spent discussing implementation, which prevents companies from moving forward alongside their competitors.
Financial stress ran rampant for many individuals and families in 2020. With shaky job stability, expired unemployment benefits, and no promise of a second stimulus insight, more consumers became mindful of how they’re spending their money.
Hook notes that people are experiencing stress from all directions, including job security, their children’s remote schoolwork, health and safety, and the fear of not knowing what comes next. He believes that financial service providers must support their customers in having a financially balanced life and play an essential role in reducing financial stress.
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Though there’s still so much that we don’t know, Hook says that now is the time to start planning forward instead of regretting backward. The future is about reinventing, not restoring, which is why he encourages financial services to focus on the following forward-thinking marketing trends:
In times of financial uncertainty, financial institutions are in a unique position to help their customers feel more secure. Support your customers in having a financially balanced life. Help them to reduce stress and improve their overall financial well-being. “These implications go way beyond choosing better credit cards or spending less on coffee,” Hook mentions. “When you improve their financial health, you’re improving their overall health, too.”
Hook says that a poor customer experience can destroy 30% of digital business projects and reduce revenue by 40% in his webinar. To overcome this, organizations must adopt a customer-centric mindset. This means understanding the needs and problems of the customers and the context of these needs. Your only goal should be to win at every interaction your organization has with the customer.
Marketing without data is like climbing a mountain with your eyes closed. According to a Gartner report, only 17% of financial organizations believe their data quality is acceptable. Data requires constant cleansing, and this responsibility must be shared across the organization.
AI technology has been game-changing in many ways. Still, it shouldn’t attempt to replace the human element, especially in an industry where the human touch has played a pivotal role in building loyalty. As Hook eloquently puts it: “Pay attention to the poetry that goes through the plumbing.” In other words, we need to continue sharing big ideas with customers, engaging with them, and staying connected outside of our automated sales funnels and email marketing.
Diversity shouldn’t be treated as a metric we strive for but should be considered a valuable part of a revenue-generating strategy. Improving diversity and inclusion has a direct effect on the bottom line. This means not just the inclusion of race and gender but also the diversity of mind, ideas, and approaches.
Not all leads are going to contribute to your brand’s overall health. Hook urges financial providers to fight the appeal of instant gratification in getting new customers from fast-acting channels like Google or Facebook and focus instead on customers they can build long-term relationships with. This positions your organization as a brand and not just a commodity.
There’s never been a better time to evaluate all of your channels and strategies and cut your losses. If it’s not contributing to your bottom line, it’s not creating enough value to keep. Don’t get stuck in the “This is the way we’ve always done it” mentality. Look at your current landscape and needs and make sure your decisions are still serving your interests.
Watch the full replay of Hook’s “Reimagining Financial Services” webinar and prepare for financial marketing in a new strange.
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