Raviteja Dodda (Ravi) is the cofounder and CEO of MoEngage, an insights-led customer engagement platform.
The rise of digital has boosted accessibility and convenience for banking customers, empowering them to quickly check account balances, transfer money, pay bills and even apply for loans through online platforms and mobile apps. Opening a bank account online has become as easy as making a purchase online.
There are benefits for banking marketers, too: The widespread use of mobile apps and online channels can allow them to leverage first-party data and analytics to measure customer engagement, offer more personalized services, recommend additional products and create stronger brand loyalty.
But a major challenge for digital marketers in the financial services industry is that the way in which banks can acquire new customers has changed dramatically. I’ve learned through speaking with marketers for fintech and banking brands that the days of upselling to customers at a local branch are largely over. Banking as we know it has entered the era of the connected customer, and tech-savvy customers have a different set of expectations. The question, then, is how well do marketers know these connected customers? Let’s examine this by looking at modern methods for acquiring, onboarding and retaining digital banking customers.
Attracting The Future
Customer acquisition is the top priority for a majority of financial institutions, as their future is often only as bright as their ability to grow. Today, that means attracting Millennials and Gen Z.
Compared to their parents and grandparents, Millennials and Gen Z have very different relationships with their banks. Many Gen Z consumers have never even set foot in a bank branch. The emergence of digital-only banks (neobanks) that operate without physical branches offers a fully digital banking experience. Digital wallets, contactless payments and peer-to-peer payment platforms like PayPal, Venmo and Apple Pay have gained popularity, reducing reliance on cash.
Not only are their relationships with their banks vastly different, but Gen Z and Millennials’ money habits are not the same as previous generations. Younger consumers are delaying major financial decisions due to economic factors such as student loan debt, higher housing costs and inflation.
Given all this, banking marketers are rethinking how they communicate with customers and recommend relevant banking products. Each form of communication, whether a welcome message to a new account holder or a marketing email to a prospect, should be personalized and relevant to the customer’s corresponding life events.
Tactics For Acquiring New Banking Customers
• Personalization: Use data and analytics to create personalized marketing campaigns that target potential customers based on their behaviors, preferences and needs. Tailor products and services to individual customers, such as personalized loan offers or savings plans, to increase relevance and appeal.
• Enhanced Digital Presence: Ensure that your bank’s website and mobile app are user-friendly, fast, secure and optimized for mobile. A more seamless user experience can attract customers who prioritize convenience.
• Digital Marketing: Use SEO marketing, paid digital advertising and social media platforms to engage with potential customers through targeted ads, promotions and interactive content.
• Content Marketing: Create valuable education-based content, such as email campaigns, blogs, videos and webinars, that address the financial questions and needs of potential customers, positioning your bank as a trusted advisor.
• Competitive And Innovative Products: Use customer data and the results of other product marketing to innovate new products that excite your customers. For example, you can develop and promote digital-only accounts or services that offer unique benefits, such as higher interest rates for online savings accounts or lower fees for digital transactions.
Upselling When There’s No Branch
Proper onboarding of new customers once they open an account is also important. The first step in onboarding is getting a new customer to download your bank’s mobile app. It’s easy to get new customers to download the app so they can manage their accounts, but what comes after that? This is where product discovery comes in.
In a traditional bank setting, product discovery happens in the local branch, where a teller or customer service representative speaks directly to the customer and walks them through the bank’s many products and services. Today, this happens digitally, whether on your bank’s mobile app or website or through other engagement channels, such as email, texts or social media. You can even use a dedicated YouTube channel to boost customer engagement by walking them through the many products available to them as new banking customers.
Engagement And Retention
Acquiring and onboarding customers are two parts of the puzzle, and the final piece is customer retention. Customers have more control over their financial data and can share it with different service providers to get better deals and services. Here are some ways you can lean into modern technology and strategies to improve customer retention rates.
• Customer Insights: Use enhanced data collection to understand your customers’ behavior and preferences and gain a clearer picture of where each account holder is in their customer journey.
• AI And Automation: Consider utilizing AI and virtual assistants to provide 24/7 customer support, handling inquiries and transactions without human intervention.
• Open Banking And APIs: Open banking allows third-party providers to access banking data through application programming interfaces (APIs). In my experience, this can foster innovation and lead to new financial services and products. For example, larger banks, such as Wells Fargo and HSBC, as well as digital-first fintechs like Ally and Mint, have already started offering open banking APIs to third-party developers like Plaid. The result is greater flexibility and the ability to partner with other fintechs to create exciting new products. Customers must give their explicit consent for third-party developers to access their data, and banks must provide a secure, compliant way for this data to be shared with the third party.
• Referral And Loyalty Programs: Offer incentives, such as cash rewards, gift cards or fee waivers, to encourage existing customers to refer friends and family.
• Financial Literacy Programs: Similar to how awareness precedes decision-making in modern marketing, banks should empower clients with insights that enable them to make informed decisions. Offer free financial literacy programs or tools, such as budget calculators, investment simulators and educational webinars, to attract and retain customers who are looking to improve their financial knowledge.
Conclusion
Once you’ve turned a consumer into a customer, onboarded them properly and educated them on the many products and services your bank offers, you can then focus on your retention campaigns. I believe it all comes down to using the right tools and strategies to truly understand what customers want, then delivering a personalized experience customized to their needs. Loyalty is the ultimate goal here to help drive continued growth for your financial institution.
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