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Finance Data & Privacy Financial Services

The future of financial marketing must rely on personalization

By Adam Herman, Senior vice-president of business strategy and development

November 19, 2021 | 8 min read

The rise of mobile banking, cryptocurrencies and investing apps has left banking companies with a diminished understanding of their customers. Goodway Group senior-vice president of business strategy and development Adam Herman argues that to focus on data-driven personalization is required to regain the initiative.

Illustration of charts and target

In the last decade, we’ve seen an increase in technology and digital services aimed at transforming banking and financial services — from the rise of Robinhood to the adoption of app-based banking and the acceptance of digital currencies.

However, these incremental changes in technology have been slow to bring about true digital transformation within the industry. Thanks to the pandemic, we are now seeing the digitization of the financial services industry occur at hyper-speed. As such, banking is now on the cusp of major disruption, as consumers across the country begin to reassess traditional avenues, such as mortgages, and explore alternative investment options, including cryptocurrencies.

In particular, artificial intelligence, data analytics and technology have seen meaningful advancements in a little under two years. These innovations are driving a shift in consumer behaviors and expectations.

In order to keep pace amid the digitization of the industry, financial services providers must aim to differentiate themselves from the competition. The simplest way for these institutions to accomplish this is by reimagining their marketing strategies.

The role of gamification

Gamification within the financial industry aims to enhance every aspect of banking and financial services, including investment advisory, wealth management and credit analysis. By doing so, it also bolsters consumer engagement. Whereas one used to need an advisory and sign a number of documents to open accounts over a series of days, it’s now as easy as downloading an app and buying stock with a few simple clicks. Barriers to entry into the world of investing have been significantly lowered.

For banks and other financial services firms, the shift towards a more democratized financial market — accessible by any and everyone — means they no longer have a strong understanding of who their customers are. So, how do firms tap into this gamified experience and get to the heart of who their customers are and what they want?

They must make their customers the focal point of their marketing. This requires delivery of a more personalized, data-driven marketing experience that enables marketers to gain new insights into their customers and deliver messaging, services and products that are unique to them.

The need for a more tailored approach

For decades, financial services companies have delivered a cookie-cutter experience to their customers, both from bank-to-bank and person-to-person. Their limited engagement can be credited, in part, to their perception as a complex and confusing but much-needed institution. As such, consumers traditionally approached the banking industry with a ‘you can’t teach an old dog new tricks’ mentality and came to the table with few to no expectations or demands for innovation of the industry's legacy practices.

With the rise of a more engaging, personal, and gamified financial experience, however, the financial services industry’s blanket approaches and incentives no longer satisfy customers or deliver the desired results for banks. For example, earlier this year, pre-qualification requirements for investment properties changed and became more stringent. These changes have limited the volume of loans available to consumers, which requires banks to know even more about their customers in order to identify those who meet new criteria to receive these loans.

Moreover, surface-level bank-customer relationships are no longer acceptable. Instead, banks are now required to establish deeper connections with customers, communicating in a more personal manner to be seen as a trusted partner in a consumer's financial journey. Banks do not have to fundamentally change how they operate in order to accomplish this. In fact, small, data-powered changes to marketing practices can transform not only a brand’s image, but also how banks fundamentally understand their consumers.

Evolving ad measurement

With more potential customers available than ever, financial services firms’ customer profiles are rapidly changing. Unlike the customers of the past, today’s financial consumer can look, work and live anywhere. As such, marketing strategies should prioritize understanding and connecting with these rapidly evolving new-age customers.

While today, it may take less than 10 minutes to get a home loan, mortgage companies still need to know their consumers intimately and gain insight into their lifestyles. To keep up with the speed at which the market is changing, ad measurement has to evolve and improve. That means that approaches to marketing attribution need to take into consideration the consumer cycle and journey.

It’s also important to assess campaign impact and performance throughout the consideration process in order to evolve many of the previous attribution models that have existed. This includes taking a closer look at re-engagement, sales and action to ensure that marketing materials are actually delivering value to customers along the way.

Improvements in ad measurement will enable financial services firms to connect their marketing across different touchpoints throughout the customer journey from consideration to post-purchase. This will produce an array of new data that can be used to better inform and customize marketing strategies moving forward.

Deploying data for better reach

As the traditional financial consumer becomes more diverse, their approaches to establishing financial independence have evolved. This has blurred financial firms’ picture of their core customer set. The easiest way to regain an understanding of who their customers are is through data.

Thankfully, the influx of financial customers has also dramatically increased the breadth of data available to marketers. And with better measurement comes an increase in information about potential customers — from their spending habits to their lifestyles. These insights enable financial brands to access a new level of understanding of who their customers are. For example, since consumers’ financial needs tend to be cyclical, data-driven marketing attunes financial brands to various life stages and enables them to appropriately target consumers when they are ready to refinance or may be interested in purchasing a new home.

At the same time, the sheer amount of data that marketers can now access has also made it more difficult for them to leverage it effectively. While there are more — and different kinds of — data at marketers’ fingertips than ever before, converting that information into actionable insights is challenging, but not impossible, to accomplish.

Finding the right partner

In order for financial firms and marketers to achieve a more intimate understanding of their customers, they must find innovative ways to understand the data unlocked through their new measurement and attribution models, ultimately shaping new marketing strategies that go beyond what they've done in the past.

With the right partners, marketers within the financial industry can easily gain meaningful and actionable insights from their data. These partners should have the ability to leverage data to shape marketing campaigns that reach the right consumers and deliver tangible results.

By identifying and working with strategic partners skilled in data analytics and performance, marketers can enhance their use and deployment of data to effectively understand consumers, develop new customer sets and refine targeting. These new customer profiles enable financial marketers to prioritize the use of data to streamline their marketing campaigns and develop a crystaline understanding of their customers.

As the financial landscape undergoes what is likely only its first wave of digital transformation, personalization will shape every aspect of the financial experience — including marketing. New attribution models and expansive data around consumers and their lives bring financial brands a better picture of who they are. With these insights, financial marketers and their partners can strategically target and personalize their marketing efforts for new customers who are the right fit for the brand, and ultimately, establish deeper relationships with consumers.

Adam Herman is senior-vice president of business strategy and development at Goodway Group

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