Why Are Bank Marketing Departments Not Profit Centers?

It’s 2022 and the technological changes in everything in life have never been more rapid or meaningful. And while the banking industry has made some progress, it continues to encounter challenges on the digital journey.

Marketing efficiently to customers and prospects remains a big one. Transforming a bank marketing department from a necessary evil and cost center to a thriving profit center that actively generates revenue is not a far-fetched reality. Traditional marketing strategies and tactics can seem downright primitive in a rapidly expanding and flourishing digital economy. Banks must recognize that their account holders are in fact digital users and have high expectations about all of their digital experiences.

So why hasn’t bank marketing adopted to the digital economy? Even though the benefits are easy to visualize, the issues and factors preventing this transformation are real and complex.

Over the past decade, banks have made significant investments in technology. At the top of the list were digital banking apps, which became the main gateway for customers to interact with their banks. Bank transactions became virtual. But while transactional activities took precedence, customer engagement was not top-of-mind for bank executives.

The question that many banks failed to ask themselves is: Are we doing enough digitally to let our account holders know that we understand and value them? It’s vital that banks engage with their customers uniquely, at scale. This engagement must be unique; each consumer is experiencing a different life state and distinctive financial odyssey. Accomplishing this involves a journey — not an event or app.

In a world of intense competition and tech savvy consumers, digital engagement is not only needed for a bank to survive, never mind thrive. How does it begin? For a bank to transform their marketing department, the strategy and investment starts at the top. How important is digital engagement to the bank? What tools and resources does the bank need to expand the digital universe of a financial institution? Does the marketing department have the authority to comply and seek out the solutions to help in this journey?

Changing how marketing works requires executives to treat modern data-driven marketing as a key growth strategy for their banks. Developing high-level goals will drive clear revenue objectives, generate data-driven strategies and leverage  digital marketing technology to power legitimate marketing performance metrics.

Differing priorities, lack of clear direction, fear of change, uncertainty about results and confusion about available solutions — these are not small challenges faced by bank marketing professionals. Banks motivated to make the changes to better equip their departments with the tools and resources they need should not underestimate these issues; it’s important to recognize and address these genuine issues when they arise.

Interestingly, most banks won’t need to make significant additional investments. That’s because they won’t be spending any more on marketing — they’ll be spending it differently, in ways that generate positive results. This digital marketing investment relies on data — business  and artificial intelligence —for smarter communication with consumers, so they understand that their trusted bank truly knows them and humanizes every interaction, even though the medium is digital.

What if banks operated with clarity of purpose, a strategy for growth, a transition path to digital engagement and the ability to source practical solutions? It’s not about having the newest shiny object, but instead having a reliable and robust tech platform that drives new sales for financial institutions every day. Proof and results matter. Solutions can help your bank grow by simplifying digital marketing with amazing customer experiences, resulting in new product sales and lasting long-term relationships with your digital users.

Banks can revolutionize their marketing department into a future-proofed, thriving profit center. Who is ready?

Why New FinTech Banks Think They Will Win Out


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There’s an old joke about the guy who’s lost driving in the countryside and stops to ask a pedestrian how to get to the city.The pedestrian replies: “Oh, if you want to get there, I wouldn’t start from here.”

This is exactly how many traditional banks feel today.They want to get to the nirvana of new technologies, but are stuck in a spaghetti of old systems.Some call them legacy systems, others call them handcuffs, but either way they are an impediment to innovation.Old legacy technologies stop the bank from moving forward into the nimble and agile future on offer today, and this is exactly what fintech start-up banks believe they can exploit as it is clearly a weakness for the large banks.

Not all fintech companies compete with banks. In fact, most of them are actually working with banks to help them adopt new capabilities built upon the latest internet-enabled technologies. These include easy-to-use apps for customers, simple-to-add code for merchants and open systems to allow other fintech companies to work with them.It is almost like banking in an app store:Hundreds of companies offering thousands of services for sending and receiving money that are simple and easy to use.One such company is Stripe, a six-year-old start-up that is the preferred code for building online checkout services.Stripe is really easy to work with and has developed the chosen system for many other innovative companies including Kickstarter and Apple Pay, and was valued at almost $10 billion by the end of 2016. The reason why Stripe has gained such a high valuation is that it has taken something the banks make difficult—setting up online payment services—and made it incredibly easy.

There are companies that do similar things in lending, savings, investments and other specific areas of financial services based upon internet technologies.These companies have names like Zopa, SmartyPig, Nutmeg and eToro. They all have fun branding and cool offices, and they all share many of the same attributes in terms of being young, aspirational, visionary and capable.This is why collectively they have seen investments from venture capital and other funds averaging $25 billion for the last four years, according to data published by Ernst & Young.

However, there is a possible impasse here, as the most successful fintech firms are not replacing banks, but serving markets that are under-served. Fintech firms with the highest valuations and greatest success are those that focus on making it easier to invest, provide better access to funding, support small businesses or turn the mobile phone into a point-of-sale device.However, none of them have replaced a bank.They are succeeding by addressing areas that banks find difficult to serve due to cost or risk.

This is why it is interesting today that of the almost 50 new banks that have been launched recently in the U.K., many of them are fintech banks.Atom, Starling, Monzo and others have banking licenses and considerable funding.However, they are up against the country’s biggest banks that have millions of customers, deep funding pockets and centuries of history.For new players, fighting the large banks is going to be a challenge and they will need a lot of funding to succeed.

This does not mean they won’t succeed, but they will need real differentiation and exceptional digital services to win out.Even then, will customers switch?It will be interesting to find out, but the one advantage the new players do have from the start is fresh technology and unconstrained thinking.Equally, they have no cost overheads and therefore can compete more effectively on interest rates.Until they begin to seriously rationalize all of that high cost physical infrastructure, the big banks clearly cannot compete with these new digital start-ups, even with their millions of customers.

Therefore, the fight for the future of banking is going to be an interesting one between a host of new digital players and a few large banks that find it hard to change.Interesting times indeed.