6 ways financial services companies are embracing digital advancements

OPINION / 22nd November 2016

We were delighted host experienced digital practitioners at our event ‘A new age of digital finance’ earlier this month. Speakers from the Royal Bank of Scotland (RBS), Barclays Bank, TSB and Allianz Global Investors (UK) shared their vision for using digital technology within their business in the future and highlighted some of the pitfalls this technology has presented them with.

Here’s what we learnt:

1.     Seeking out the single customer view:

A digital consolidated data-set, which can be used across all channels to provide customers with a seamless digital experience, is the “nirvana” said Julian Brewer, Head of Digital Sales and Products at TSB. But many banks, including TSB, have a long way to go; legacy systems, ownership rights over proprietary data and fragmented data sources are just some of the many stumbling blocks that prevent the single customer view becoming a reality. Brewer said many of the banks are looking to find ways of bringing data together within a DMP; however, this is a complex and costly endeavour. TSB uses a tool called Tealium Audience Stream to create a CMP (Customer Marketing Platform) which pulls the limited data sources available to the bank together into a single view, and delivers many of the benefits of a more traditional DMP. “From this, we’re able to use our first-party data to create real-time audience segments and tailor our digital onsite and offsite marketing to great effect, and make this experience more relevant to our customers,” he said.

Our take-away: Heritage banks still have some way to go before they can bring their businesses in to the 21st century. They will find it harder to apply the latest technological advancements to their existing complex systems. However, the consumer is becoming more savvy, and will soon want to interact with banks in the same way they do with the likes of Uber.

2.     Owning digital content:

In recent years, many marketers in the FS sector have fallen into the trap of giving their content to other sites, either for free (to aggregation sites) or have paid other publications (such as The FT or CityWire) to publish their content, in the belief that it will bring them closer to their customers. This has been a misnomer, as the aggregators and publishers have owned the proprietary data, and the relationships with their customers, and not shared the learnings with third-party companies. Allianz Global Investors’ Head of Marketing Tom Hughes said: “Marketers need to understand the value of their own website and the data that it creates; realising that data is invaluable.” He says marketers need a change of mindset, as websites should longer be viewed as just “shop windows”. “Websites need to provide a utility for clients; they need to have content that’s useful for them so that they’re are encouraged to return. Every click, and every interaction that happens your website, is valuable. If you can work out the causation between this activity and the sale of a product, that’s gold,” said Hughes.

Our take-away: Any FS company that can publish timely, analysis-heavy thought leadership on the site and distribute it to a wide social audience will undoubtedly see an uptick in sales. Use the data and link the visitor to sales, and you’ve accomplished the holy trinity.

3.     Taking control of the CRM:

The advancement of digital has come with an abundance of data; and more pressure for marketers to answer questions from the C-suite like: What’s the ROI on spend? Who’s been on the website? What did they click on? Who opened that email? Where did they open it? From what device? In the past, when marketing was a linear process and the CRM was just used to manage sales funnels, marketers didn’t get involved in data. But that’s all changed. The CRM is now the hub of information and the crux of the relationship between marketing and sales. Allianz Global Investors’ Tom Hughes said; “If you don’t have a hold on your CRM and how it connects with all the platforms you’re building, [and] if you don’t know how your content is performing, then you’re going to fail. You need a good website, with high performing content where you can capture data, to underpin your relationship with your customers and your sales team.”

Our take-away: Unfortunately email and the website are often managed by two separate teams, let alone separate agencies, when the reality is they have to be joined up to be successful. The tech can enable campaign success, especially when the marketing automation and personalisation planning has been put in place.

4.     Using data to personalise content:

Personalisation is at the core of everything Barclays Bank is doing in the digital space, said the bank’s VP of analytics and personalisation, Sharukh Naqvi. “We are creating a data store and building a recommendation engine so we can utilise our transactional level data to deliver personalised content, with the aim of reaping the ‘customer experience dividend’,” he said. With Fintech growing at a rapid pace, Barclays’ is working hard to differentiate itself from the pack. “We want to be known as a technology company with a banking licence, rather than a traditional bank,” said Naqvi. From next year, when Barclays UK will operate as a separate entity from the multinational FS brand, it will be able innovate in the Fintech space. Naqvi said the bank plans to use transactional data to deliver personalised content to customers, such as offering smart spend points or rewards for transactions with third party companies. “We will try to align our content and target customers based on their recent transactions. Say a customer buys something at Pret a Manger – if we were partnering with Pret – we’d offer that customer a discount, in the moment, in real time,” he said.

Our take-away: With Atom and Monzo, the new kids on the block, on the horizon our high-street banks need to respond quickly – and personalisation is core to this. And if they can enact it in real time then they’ll inevitably lead to a spike in new customers.

5.     Putting the customer at the heart of the business:

Barclays Bank has refocussed its business model and says it is putting its customers at the heart of everything it does. “We want to help our customers hit their financial goals and achievements, and we’re going to use our transactional level data to do this,” said Naqvi. Barclays is not the only company realigning its business model to put the customer at the core. Disney has invested heavily in the customer experience. It’s created a piece of wearable tech, a wristband called Magic Band, which enables its customers to make purchases without a credit card or cash, gain entry to its parks and resorts, book Fast Passes, make dinner reservations and receive personalised offers using this band. As Brian Solis, leading expert on Experiential Business Models, said in a recent book: “In order to be competitive, brands must get better not only at understanding and satisfying customers’ wants and needs but at anticipating them, even before customers know what they want and need. This proactive experience is quickly becoming the new standard.”

Our take-away: Big brands have such large levels of data yet they aren’t using it effectively – especially when it comes to triggering sales. As Solis suggests, anticipating customer needs is arguably more important than creating personalised digital experiences.

6. Catering for more sophisticated audiences:

The new generation of consumers are digitally and financially more savvy than their parents. They are internet natives. They are mobile-first and they work, shop and socialise online, said Andy Farmer our Executive Strategy Director. They expect speedy, efficient customer service across all channels, from any institution they choose to engage with, day or night. If financial services brands can’t provide great digital service then these consumers will go elsewhere. Traditional banks are reacting to this change in a number of ways, such as creating “innovation labs” within their businesses. And, in some cases, they are directly investing in fintech companies outright; all to keep pace with technology and remain competitive.

Our take-away: The rise of fintech companies like Funding Circle, Nutmeg and eToro is no surprise; they’re very attractive to digitally-able younger consumers. These brands aren’t taking huge market share at the moment, but they are nibbling away at the edges and capturing the next generation of investors. 

Andy Farmer Andy Farmer Executive Director, Strategy Andy Farmer