10 digital marketing predictions for the retail banking industry, covering mobile marketing, social media, content development, digital vaults, privacy, and more.

1. 10 Digital Marketing Predictions
for the Financial Industry
By Damir Saracevic, Director of Digital Marketing

2. 10 digital marketing predictions for the Financial Industry
I t’s no secret that the retail bank marketing industry is going through a significant
upheaval. Read the headlines in American Banker, or ABA Bank Marketing, or BAI,
or Financial Brand, and you’ll see common themes such as mobile adaptation, mobile
payments, social media, the future of the branch, banking for the unbanked … the list
goes on. Some of these trends are long-term, but a number of changes are on the
horizon that will affect you in 2013. Here, then, are my ten predictions for what really
will matter in the year that’s unfolding.
1. Mobile Banking Growth and Expansion
There is no doubt in my mind that mobile banking is taking off like a rocket. Here are
some basics stats to support it belief:
• More smartphones than feature phones
• Customer demand for mobile banking and adoption rates
• Availability of technology
• Security
One thing that I believe will change in 2013 is the increase in table stakes needed to
have a mobile banking presence. It will no longer be enough to just provide the basics:
Looking at transactions, scheduling bill payments, performing intrabank transfers, looking
up location information. The stakes will be elevated to include things like remote deposit
capture, interbank transfers, bill pay setup.
When you think about how the bill paying process works today, it usually means going to
your bank’s mobile website or mobile app and typing in all your information before you
can make a payment. How about this: why can’t I take a picture of my bill to provide all
the necessary information, then just type in the account number? Simple, right?
I believe these kinds of experiences will become part of the landscape in 2013, and those
institutions that embrace them will chart the course for what the table stakes in mobile
banking really are.
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3. 10 digital marketing predictions for the Financial Industry
2. Tablets Replace Home PCs
Currently, tablets fall under the broad-reaching category of “mobile” and I think in 2013,
we will definitely have to define the difference between mobile phones and tablets. I
believe that tablets are replacing the desktops and laptops at home as a primary vehicle
for going online. But I question whether you need a separate experience for them via the
app. I can see that if you are accessing a lot of data and speed becomes an issue, or
you are trying to take advantage of some of the native capabilities that tablets offer, there
could be enough need to create a native app for the tablets. But otherwise, I believe this
is an opportunity for financial institutions and FISs and Fiservs of the world to create
new online banking experiences with responsive design in mind that will deliver great
banking experiences regardless of which device customers use. From the maintenance
and portability standpoint, there are multiple advantages: You will have one code base to
maintain and future upgrades would be rolled out on both platforms simultaneously.
Notice that I left “phone” off the list here. I believe the mobile phone is a different device,
and responsive design centered around it won’t necessarily work … packing the same
amount of information onto the smaller screen is not a recipe for success; it’s a recipe
for disaster. Bottom line: You have to design for the specific device and for how your
customers use it. An app may be the right thing for your tablet and your customers. But
before you invest a lot of money, do some research, check with the current customer to
gauge the interest, and determine whether there is a need. What I have seen over the
years is that, when asked, customers want it all, but actually, they only need a few things.
More important, use your relationships with your online banking vendors to influence your
vendors’ future roadmap.
3. Fee Replacement Opportunity
Two of the most hated words in the banking industry are Frank and Dodd. Or is it Dodd
and Frank? We all recognize the need for the financial services reform, but that reform
and government intervention have left a pretty hefty hole in a financial institution’s ability
to generate fee revenues that in the past comprised a significant portion of net income.
With the changes over the years, I believe that offering reward programs like
BankAmeriDeals and partnering with companies like Cardlytics to power your
transactional data are simple ways to provide more value to your customers … thus
increasing retention and generating additional revenue. Will it replace fee revenue?
The answer is probably no, but it could be a nice win-win for the customers and FIs. No
more mani-pedi deals from Groupon; how about some real deals from companies whose
services you can actually use?
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4. 10 digital marketing predictions for the Financial Industry
4. Mobile Wallet — Coming Soon!
This is still Wild Wild West territory. I believe it’s too early to tell if there is a clear winner
or even one that is emerging. There are so many competing players. Who will win?
Considering that I’m in the prediction business with the requisite MBA, I will use my
standard MBA response to this question: It depends!
I believe that we, the customers, will ultimately choose the winner by embracing their
methodology and technology. Am I still going to bring my wallet with me to hold my
driver’s license and cash or will that go into my mobile wallet? What will law enforcement
think when they pull you over and you dutifully show them your driver’s license … on
your phone? Or will the ultimate solution live in the cloud? I believe that there are too
many cooks in the kitchen vying for that head chef position, from device manufacturers to
wireless carriers to technology providers. I don’t think there is going to be a clear winner
in 2013. Au contraire, this will be the year of test and learn in the mobile wallet space,
and the winners will start bubbling up to the surface in 2014 and 2015. If I were an FI,
I would take a wait-and-see approach, and on a quarterly basis I’d review the players,
technology partners and customer sentiments before choosing a path to developing a
mobile wallet.
5. Customer-Centric Approach Is Here to Stay
It’s not even worth arguing anymore: the shift from brands to customers has already
happened, whether we like it or not. As Forrester Research Inc.’s Gina Sverdlol says in
What Drives Retention and Sales in US Banking, “[G]one are the days when companies
could simply offer their services and customers could choose to take them or leave them
— today, companies need to be customer-obsessed.”
I believe we are approaching a seismic shift in how we market to the customers, moving
from having a single offer and choosing the customer who receives it, to having a
customized offer for each individual. OK, true 1:1 offer-to-customer match is nirvana, but
this is a Big Data problem that will be at the center of the customer-obsession approach.
Companies that can harvest all customer data and be able to match the right customer
experience (offer, context, content) to the right customer will emerge as clear winners.
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5. 10 digital marketing predictions for the Financial Industry
6. Integration of Social Into Channel Strategy
I still think it’s too early to tell. There aren’t yet enough successful examples of social
media that either delivered successful sales or helped with retention. But I also think that
there is a misnomer out there about what social really is. We often forget that ratings
and reviews are part of social channel strategy; it doesn’t all have to be Facebook and
Twitter. Forrester did a great case study on USAA and how it improved application rates
across various lines of business.
Twitter is known for taking down governments, but how many FIs have successfully
integrated Twitter as part of their customer service channel? Most of the time, FIs simply
tell their customers to contact the customer service center … but why can’t you take care
of my needs now? I know it’s not that simple; there are a lot of issues that may surface
when FIs use Facebook and Twitter, but there is nothing wrong with using ratings and
reviews on your own website. Engage your users to not only help cross-sell and upsell
but also attract new prospects. I believe that if you provide good products and services,
your best customers will advocate for you and drown out the noise that a few disgruntled
customers are making. But when that noise is generated from somewhere other than
your website, your best customers may not hear it and may not be able to jump in and
protect you. Trust me, if there is dirty laundry out there, people are airing it anyway.
7. Future of the Physical Branch
It’s shifting … the branch is not going to disappear anytime soon, but its role may be
different from what it was a decade ago, or what it is now. Some of the high-touch
transactions that can’t be completed online will still conclude in the branch, some of the
servicing may still occur in the branch, but the basic transactional needs of the branch
will become automated. Think about the evolution of ATMs. Initially, they were there to
dispense money, then we could do some basic transfers, then we could start making
deposits with an envelope. Nowadays you don’t even need an envelope.
I can see branch automation where you deposit your check with a remote deposit
capture station via an iPad®. I can see the bank teller evolving into more of a financial
concierge, helping guide branch customers to the right product and/or person, lending a
hand in basic problem-solving. But don’t worry about this yet, it is something that will take
years to put in place. I anticipate a great deal of testing and experimentation over the
next three to five years, so this is really a 2018 prediction at the earliest.
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6. 10 digital marketing predictions for the Financial Industry
8. Digital Vault, Not Hard-Drive Backup
I see branch-like services moving online. The first thing that comes to mind is a service
like a lockbox. Imagine a digital lockbox online, often referred to as a digital vault. But
the way I see it, it wouldn’t be just a backup service like Carbonite for documents. It
would be a repository of all important physical documents, such as birth certificates,
marriage certificates, insurance policies, mortgage information, etc., all in one place. The
difference between offline and online is that you would have the capability to enable your
digital vault to share individual pieces of information with others in a secure way.
I believe that this would be an easy way to further engage and interact with current
customers. When the customer wants to extend his relationship with you — for example,
a checking account customer who is interested in a mortgage — he could just give you
access to the digital vault with all its relevant information. No more hunting for that W-2
or 1040. Products like mortgage refinancing would take on a different context from the
customer perspective. I think that features/functions and ease of use are what will make
a difference in a product like this and customer experience will really benefit. So make
it easy and make it simple; don’t turn it into a backup solution for your hard drive, and
customers will flock to it. It should be a high-margin product, something that can easily be
tacked on to the online account opening, as an add-on service for a fee or as an account
differentiator.
9. Online Account Opening — Next Generation
The only thing I want to say about online account opening is that I hope you are
paying attention to it and scrutinizing it on a regular basis. Often we see banks tracking
application starts to account openings only, without really understanding what happens
in the middle. We know that account openings are shifting online, so wouldn’t you want
to see where the drop-offs are in your process? Are your qualifications too stringent
(different online from in the branch?), are there too many steps, do you have the right
funding options available, can you track the marketing sources that are delivering the
best customers?
I believe 2013 will be the year in which analysis and scrutiny of this process become a
critical component of where and how you spend your marketing dollars. If you don’t know
what is driving online acquisition, if you don’t understand the costs of that acquisition,
if you don’t understand how customers flow through your process, you may be leaving
millions of dollars on the table and driving prospects away. Make sure you have analytics
running on your account opening site, and make sure you review it on a regular basis. I
believe this is often the most overlooked process in the online environment and that it is
rarely scrutinized enough.
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7. 10 digital marketing predictions for the Financial Industry
10. Content Strategy — Now More Important Than Ever
You may ask yourself, what the heck is content strategy? For the definition, I suggest
looking it up on Wikipedia (not WikiLeaks☺). Content is still king online and if you don’t
have a strategy on how to develop content your customers will want to consume, you are
probably killing your customer experience and missing opportunities around SEO. And
you are probably missing opportunities around merchandising. In addition to breadth,
depth and relevance of content, it is imperative to make it accessible, understandable
(please don’t have footnotes in four-point type on the bottom of the page in gray font …
work with your compliance team to integrate it into the content itself), and what I deem
most important, HUMAN. Google engineers spend a lot of time ensuring that the right
search results are presented to the users. They now reward sites that write content for
humans instead of Google Bots. With the right content strategy, you can also guide
customers to additional products and services. More important, you can ensure that your
products are presented in the right way, regardless of which channel the customer used
to find them.
Content strategy is not just website content. Content strategy ensures that you have the
right processes and governance for content creation, distribution, and measurement. But
it’s critical to get a handle on it. Otherwise your customer will leave your site confused
about what you’re offering.
I’m sure I’m not the only one out there saying these things. Whether you disagree with
me or not, drop me a note; I’d love to hear your point of view.
Email me at dsaracevic@catalystinc.com.
About the Author
Damir provides strategic leadership and technology consulting for Catalyst clients in his role as director
of digital marketing. Originally from Sarajevo, Bosnia & Herzegovina, Damir was previously a cofounder/
president of Auragen Communications, one of the leading interactive agencies in the Northeast. He holds
an MBA from the William E. Simon Graduate School of Business at the University of Rochester. He will be a
presenter at the 2013 American Banker Best Practices in Retail Banking Conference.
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