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SIX WAYS BANKS CAN FORGE AN EMOTIONAL BOND WITH CUSTOMERS

Taj Nota, VP Professional Services UK at NGDATA

We all know what it’s like to be bombarded with irrelevant advertising. Rather than making us want to engage with the brand, too many and the wrong sort of messages will make us grind our teeth in frustration – and perhaps vow never to buy the advertised product in the future.

In the early days of digital advertising, brands had little choice but to follow the “spray and pray” approach of traditional broadcast marketing. The data revolution, however, means that there is no longer any excuse for failing to get the most powerful message to the right customer at the right time, and with the right frequency.

Taj Nota

This applies as much to banks and other financial services firms as it does to consumer brands. By delving deep into customer data, these institutions can gain a true 360o view of each customer, discovering what financial products they use, why they choose them, and how they use them. What’s more, the data can shed invaluable insight into the customer journey and each person’s specific needs at every stage along it.

When it comes to digital, people expect a much more personal and relevant relationship with their bank. That’s why we’ve compiled six top tips for banks that want to make the most of their marketing.

  1. Create “Micro-Moments”

Sometimes it’s important to look at the big picture, but when we want to find something an astonishing 96% of people  turn to their mobile devices. In spite of the small screen and the short engagement time, these “micro-moments” on mobile can be incredibly powerful if they’re done right.

Banking can be ripe for micro-moment marketing, but it requires content and resources to be tightly tailored to each individual. With the help of a savvy SEO and content marketing team, your bank can anticipate everything from the root of your customers’ economic worries to the path of their financial dreams, and use this insight to create articles, videos, and other engaging, rich, and helpful content to answer questions and fuel financial and life goals.

  1. Emphasize the Emotional

One of the key pillars of marketing is to create desire and emotional engagement with the brand. As consumers, we tend not to feel emotional about our financial providers – but few things affect our health and wellbeing as much as our relationship with our money.

Banks should therefore shift their marketing strategy towards the financial-emotional journey: what experiences, life stages, and other touchpoints in the customer lifecycle ultimately lead people to your bank and your financial products? Focus on the moments that matter: graduation, marriage, expanding families, savings, retirement – all the emotional, exciting moments and life experiences that usher customers through your bank’s doors. From there, you can build out your marketing campaigns around these touchpoints, to create purpose-driven marketing campaigns, storytelling initiatives, and other engagement.

  1. Harness the power of AI and chatbots

Few things are more frustrating than hanging on the telephone for ten or fifteen minutes, waiting to get through to our bank’s call centre to perform a routine transaction. With recent advances in artificial intelligence, there’s now no reason why a huge range of customer enquiries can’t be handled by advanced chatbots like Drift and Intercom. These AI-powered tools are good enough to ‘fool’ customers into thinking they’re talking to a human, and provide instant and accurate answers to client questions, via your website chat, social media chat, and other sources.

  1. Make the most of video

Everybody loves video, not least because it can express potentially complex ideas with simplicity and brevity. Every bank should be examining how it can make the most of video, which is the most effective type of content: it encourages existing and potential customers to spend an average 88% more time on your site than they would otherwise. While there’s a place for text, video is perfect for creating the emotional triggers that make digital marketing so effective.

  1. Customize and Personalize

Digital marketing is wasted if it’s not personalised. Customer expect bespoke communications and products – and advanced data analytics can provide them in real-time. Analytics, responsive technologies, customer insights and other data-driven marketing tools enable you to follow customers through their journey, ensuring you can deliver the most highly-personalised communications and services.

  1. From Millennials to Gen Z

It’s no longer all about the Millennials: Generation Z is on the cusp of becoming valuable consumers. They’re getting ready to graduate college, enter the workforce, buy their first new cars, and – soon – get married, purchase their first homes, welcome their first babies, and celebrate other major life milestones.

Ignore Generation Z at your peril. They are already researching where to open their first “adult” bank accounts. Grab them early and form an emotional attachment, and you’ll have a better chance of keeping them throughout their later, more lucrative life stages, like when they need loans or mortgages.

The lesson is clear: the journey to effective, engaging digital marketing starts with customer insight. Get a handle on your data today, and start building an emotional connection with your customers – present and future.

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Banking

HOW IDENTITY IS SECURELY UNLOCKING THE SME BANKING MARKET

By Mike Kiser, senior identity strategist at SailPoint

 

Have an identification card in your wallet? With a selfie and a few short minutes, you could have access to a business bank account.

Small and medium enterprises (SMEs) have long been the fuel that drives the global economy, representing around 90% of businesses and more than 50% of employment worldwide. Over the last few years, a range of financial services and platforms have arisen over the last few years to support the banking needs of these organisations. They are often digital natives and are innovating to meet the needs of their clientele.

This innovation provides great ease-of-use and rapid access to credit but also demands a careful consideration of their assumed security approach. The aforementioned scanning of an identity and a quick photo to establish a bank account demonstrates the rising importance of identity in both the consumer and enterprise arenas.

The blurring of the lines between personal and corporate identities (in this case, an individual acting on behalf of a small business) is still in its infancy. Combined with the ubiquity of mobile devices, individuals will tire of maintaining different accounts, different personas, different lives for each activity. Usability will demand that identity be reusable, portable, and secure.

This has massive implications for enterprises and the financial institutions that serve them if they seek to prevent cyber-attacks; thankfully, the same element that presents the security challenge also offers the solution: identity.

 

A New Vantagepoint 

Just as individuals desire a single identity to unify their interaction with disparate parts of the world, organisations can use identity to grant them a single, holistic view of an individual (attributes, access, and behaviour) rather than seeing only a fragment at a time. This is particularly important for these new financial institutions—much of their technology stack is cloud-based, which often leads to splintered security approaches. An identity-based approach must be cloud-aware, and able to distil these complex environments into simple and easily governed infrastructure.

This collectivisation also allows security to use identities in the aggregate: to see what groups of similar individuals exist, what access these groups have, and what their usage of this access typically is. All of this contributes to the establishment of what normal is, whether it’s attributes, access, or behaviour. Once the “normal” is established, then the outliers—the potential threats—may be quickly triaged.

 

Adaptability: The New Imperative 

The recent wave of change has demonstrated that financial institutions and organisations must be ready to adapt quickly to shifts in the environment. Portions of IT staff and services have been furloughed, and adjustments to new realities are essential. An identity approach that learns from the evolution of changes in the previously established areas of normality can grant enterprises the ability to see what is coming next and invest appropriately. Much like a view from an elevated position grants the ability to see beyond the normal horizon, basing a security strategy on identity makes it inherently adaptable.

 

Identity: Innovation and Security Intertwined 

Identity, then, is a foundational consideration for financial institutions seeking to provide services for the perennially important small and medium enterprise sector. By eradicating barriers to entry that have historically kept financial organisations and enterprises apart, it is driving rapid adoption and a growing market for innovative banking. At the same time, it shows the path forward to securing those new services in a pre-emptive, adaptable way.

Now if you’ll pardon me, I must go open a bank account for my next start-up—from my mobile.

 

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Banking

OPEN BANKING: ARE CONSUMERS KEEPING AN OPEN MIND?

Last September, the European Union’s regulatory requirement for banks to open up their payment accounts via application programming interfaces (APIs) came into effect. Since then, open banking has taken centre stage within European retail banking and payments. In this blog, Elina Mattila, Executive Director at Mobey Forum, shares insight into how emerging consumer attitudes may impact open banking services in the coming months.

It has been over six months since the revised Payment Services Directive (PSD2) came into full effect and with it, required banks to allow third party providers to access payment initiation and account information. While the regulation was designed to facilitate open banking, the market demand was uncertain. Would we, as consumers, choose to embrace the new services enabled by open banking? And if so, under which conditions?

To understand consumer attitudes, Mobey Forum and Aite Group partnered on a pan-European study to determine the appetite for open banking services amongst 1000 consumers in Finland, France, Germany, Spain, and the United Kingdom. The study, launched in November 2019, revealed many important consumer trends and attitudes, including key priorities and potential barriers for adoption.

 

Consumer appetite for change

The consumer benefits of open banking are largely perceived to be compelling, yet this counts for little if the providers of those services are not deemed trustworthy. This is an observation reflected in the study, which highlighted consumer confidence in service providers as critical to open banking adoption. People want clear visibility of who is managing their finances, and the overwhelming majority (88%) would prefer their primary source of open banking services to be their main bank, as opposed to other banks or third-party providers (TPPs).

Consumers also indicated high levels of trust in their current bank of choice, reflected by 77% preferring to use a financial product comparison service offered by their main bank. By enabling customers to compare the pricing and conditions of a range of financial products on the market, they feel more comfortable that banks have their best interests at heart. This is a welcome trend, and one which should be celebrated in the aftermath of the 2008 financial crisis. For the banking industry to have rebuilt trust levels in this way bodes well for consumer adoption of future innovations.

With a trusted provider, one third of consumers were then either ‘very interested’ or ‘extremely interested’ in integrating open banking services into their financial routine. This applied to specific use cases: account information services (32%), pay by bank (33%), purchase financing (25%), product comparison (35%) and identity check services (35%). Unsurprisingly, consumer willingness to adopt these services relies heavily on providers continuing to prove that they can be trustworthy stewards of personal data.

 

Consumer concerns

For those unwilling to adopt open banking, concerns largely focused on reservations around security and privacy. As open banking becomes more sophisticated, it will be interesting to analyse the nuances around how consumers engage with third parties. Established brands are perhaps more likely to be trusted by consumers than lesser-known online retailers. For this reason, consumers may hesitate to engage newer companies than brands they are already familiar with. In an industry as varied as finance, this creates additional intrigue in the ongoing battle for market share between the newer ‘challenger’ banks and the older, more established European banks.

Consumers might, however, be willing to deprioritise trust and, instead, favour convenience and usability. When questioned over their willingness to adopt a new payment method, for example, 91% of respondents indicated that they could be tempted to switch either by financial incentives or the promise of greater convenience.

 

The path forward

While open banking is still in the relatively early stages of development, it has made significant progress in a very short period of time. Not only is it allowing consumers to share financial data with authorised providers as they wish, but it is set to spark more competition and innovation within the market.

From a business perspective, open banking is expected to create lucrative new revenue streams, particularly for companies which are able to innovate quickly and react to consumer demand. It is prompting consumers to reconsider how they manage their finances and – most excitingly – it’s not even close to reaching its full potential. It should bring a whole new era of service partnerships between banks and TPPs, which will enable a new generation of innovative financial services.

For the industry to truly fulfil its potential, it is vital that stakeholders are able to explore new business models, innovations and changing customer expectations for open banking in a commercially neutral environment. Mobey Forum’s open banking expert group provides exactly this, and we look forward to supporting our members as they shape the future of digital financial services.

 

Where to find out more

The opportunity for open banking is explored in more detail in a report by Mobey Forum and Aite Group, entitled Open Banking: Open Minds? Consumer Appetites for New Banking Services. It provides banks and other financial services stakeholders with a market view on consumer appetites toward new open banking services and explores the possible roadblocks to consumer adoption. It is also discussed in a podcast featuring key representatives from Interac, Erste Group Bank and Strands Finance.

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