The Current State of Digital Marketing For The Banking Industry
The majority of financial institutions already offer some kind of online banking system to their customers, and many also provide mobile banking and Internet bill pay options. These services are being used by the majority of the population in the United States, with 80 percent of households with Internet access taking advantage of online banking.
Worldwide, younger generations tend to be the first adopters of new technology, so even if nothing changes, an aging population will ensure nearly 100 percent saturation for managing banking through the Internet and mobile devices. This poses both pros and cons to financial institutes. On the one hand, there is less demand for brick and mortar banking locations, which lowers the cost of handing accounts and doing business in general. The negative side of this is that these locations tend to be where banks are most comfortable signing up new customers and adding services to existing accounts.
As a result, banks are now having to move their sales and marketing efforts to the Internet, and the majority of these institutions do not have a strong foothold in social media or online marketing. In fact, many banks simply use online efforts to send consumers to their website or online banking portal.
Areas of Opportunity For Financial Institutions
While financial institutions may range from dipping their toes into online marketing to being completely immersed in Internet advertising, few are doing things exactly right. Even those that are meeting with success may not be getting everything out of these initiatives that they could be. Some of the main reasons for this is that banks and other organizations are using push methods instead of responsive ones and failing to measure their return on investment or level of success.
Based on the results of the 2013 Efma Digital Channels Survey, well under half of participants measured their ROI, and only about a third used try and learn methods to improve their online campaigns. This is fairly astonishing when one of the biggest advantages that online businesses of any kind can leverage is data collection, which tells companies about their customers’ demographics and habits. Aggregating the type of information largely being ignored by the banking industry could enable businesses to keep real-time pictures of customers along with improving their marketing initiatives and outreach.
The Future of Digital Marketing for Banks
Internet data collection efforts should be at the top of most financial organizations’ to-do lists. This information can enable businesses to track not only individual customer accounts but to get a better idea of how finances are handled and services are leveraged across entire households and businesses. Leveraging this data is expected to allow banks to offer individualized services instead of one size fits all plans.
NFC and similar technologies related to online wallets are expected to play a substantial part in online banking in the coming years. Younger demographics have begun to increasingly use services like PayPal and Google Wallet to handle both banking and bill pay, and many banks are expected to start offering similar services. While the United States lags behind on adopting these types of payments, in 2013, contactless Visa transactions quadrupled in the UK alone. As more retailers upgrade their terminals, a similar surge in use is expected in the U.S.
One area where growth is not expected to happen, at least not for a few years, is in the arena of offering banking through social media sites, such as Facebook. There are a few organizations doing it, one in particular detailed below, but the majority of institutions are concerned about the security issues and have no current plans to offer these types of services. According to information from the 2013 Global Retail Banking
Digital Marketing Report, a mere five percent of banks surveyed currently use social media for transactions, and less than 50 percent have development plans slated for the next one to three years.
A Financial Institutions That Is Doing Digital Marketing Right
There are a number of financial institutions, both large and small, that are already involved in digital banking and marketing, but there are a few that are leading the way. One in particular is Moven. Moven is a multi-tasking app for iOS and Android, and it enables people to manage their money, get updates and send and receive payments from Facebook friends. The app even provides a spending analysis and lets people know what the average amount spent at nearby retailers, restaurants and stores is.
The app provides bill pay, financial management and tracking, and it is built into a mobile platform that is usable through social media. Usage and spending information is almost certainly tracked by developers, which is likely to enable specific offers, deals and discounts to be presented to the user. While individuals still need to go through a standard banking institution, it is backed by CBW Bank, and a debit card may still be necessary in many situations, this app may be a good representative of what we can expect in the next few years.