In order to compete with new digitally savvy competitors, retail banks must be agile and single-minded about putting the customer first. The truth is, most banks are not there yet; however, their customers are.
Seventy-nine percent of customers say their banking relationships are merely transactional, according to the 2016 Accenture North America Consumer Digital Banking Survey.
That is simply not good enough. Retail banks need to make themselves integral to their customers’ lives. Banks have an opportunity to become more than just transactional providers, particularly since customers responding to the survey say they are open to more value-added services from banks.
But the key is delivering what customers want, which requires understanding their needs. Banks can turn existing customer data into insights to better understand and serve customers.
Banks must know their customers better
Traditionally, the main interface of the bank was a teller behind the counter or at the drive-through. Today, there are more digital interactions between a bank and its customers. These banking “moments” generate a wealth of data, but the upgrade to digital interactions has also changed customer expectations. In addition to customers wanting real-time accessibility to their account information whenever and wherever, they also expect instant customer service and support across all channels, whether virtual or physical.
This means retail banks will need to turn everything they know about marketing upside down in several critical areas.
They can start by focusing on marketing led by individual customer experience, as opposed to generic audience marketing, which blankets segments with the same messages and which tends to be inefficient.
Agile banks eschew “spray and pray” techniques. They emphasize deliberate, data-driven approaches, defining clear, measurable digital outcomes for their marketing initiatives. Agile banks rely on algorithms to govern digital banking moments that truly connect with customers—optimizing messages and channels based on customer data. Customer and business insights help design and refine customer experiences to optimize outcomes such as acquisition, up-selling or cross-selling and loyalty.
Data here, data there, data everywhere
Data is the lifeblood of this marketing approach. Retail banks luckily have no shortage of transactional customer data. In addition, 86% of customers trust banks over all other institutions to securely manage their personal data, according to Accenture research. This positions banks well to build the data foundation they need to truly know their customers.
Agile banks augment transactional data with customer behavioral data and third-party research. They use analytics to develop deeper insights into customer behaviors and demographics beyond what their banking interactions alone reveal.
Banks can use this data to better help customers. Here’s a vision of how far this could go.
Consider a couple planning to buy their dream home in a neighborhood with a good school district. An agile, helpful bank could help them research neighborhoods and find a real estate broker. When they are ready to move, an agile bank could help price movers, and even handle scheduling.
And once the couple moves into their home, the bank can help them order new kitchen appliances with a preferred financing option, which can even be added to their monthly mortgage payment; plan some home improvements; and get a discount on a security system bundled with an umbrella home insurance policy. The bank can even help the couple scope out connected sensors to alert them of any leaks that may occur in the home, moving toward prevention versus insurance coverage.
These are all ways that a bank can move beyond having a transactional relationship and truly become a part of their customers’ lives.
Going from here to there
Obviously, the banking relationship we’ve just described goes far beyond the typical one seen today. It requires a deeper dive into analytics of data to offer augmented services. To do this, banks need to focus on a few key areas:
• Use cross-device systems to unify customer profiles, pooling all data and all devices.
Agile banks can deliver seamless cross-channel customer experiences using beacon technology and geo-fencing within physical spaces to interact with customers’ devices and provide relevant information and offers. Banks can also enable customers to initiate a transaction from their device, and use the same device to authenticate and complete the transaction at a chosen physical location.
• Programmatic marketing empowers agile banks to make automated, data-powered decisions in real-time about when and where to reach customers.
It relies on data management platforms that store and cull rich customer attribute data from first-, second- and third-party data to build customer insight. Using this insight, data activation platforms place “made-for-me advertising” on paid and owned media channels to reach customers with highly specialized messages and offers.
The focus is not on transactions. Instead, research focuses on connecting with people on an emotional level with experiences that are relevant to unique moments in their lives.
• Artificial intelligence platforms can enable meaningful one-to-one connections with thousands of customers, while limiting resource use and cutting costs.
Machine learning is reactive, improving performance based on past experience, whereas artificial intelligence systems mimic human cognitive functions. Artificial intelligence culls through data looking for hidden associations and attributes to infer the next-best-action that will move a customer.
To offer such services, retail banks must elevate their own data management practices, developing standards and permissions—and security controls.
Banks should forge smart, mutually-beneficial—and often unconventional—partnerships to provide services and immersive experiences that extend beyond their customers’ financial lives.
Above all, they should maintain a constant conversation with the customer. If banks want to become more agile, and more useful to their customers, they should invest in enterprise marketing platforms that enable them to have coordinated, “always-on” interactions with their customers.
And they should constantly test, learn and tweak the services they are offering.
About the authors
David Edmondson is a senior managing director in Accenture’s North America Banking practice
Christine Duque is an executive in Accenture Distribution and Marketing Services, Financial Services