Multichannel integration, personalisation, and massive diversification of channels are leading to a marketing innovation boom across the Asia Pac finance sector.
According to consultancy Accenture, several Australian banks are exploring and trialling innovations ranging from machine-learning algorithms to support customer interactions, to customer identification in branches using iBeacons.
“Where Australian banks are struggling, similar to most banks in mature markets, is in scaling these innovations to create a material change to customers’ day-to-day experiences,” said Pascal Gautheron, Accenture’s managing director for banking across Asia-Pacific. “According to Accenture research, 49 percent of bank chief marketing officers in mature markets are considering digital transformation of their distribution networks, and just 14 percent believe their bank’s online and offline capabilities are completely integrated.”
Chris Wilson, financial services partner at Deloitte, agreed that Australian banks are investing in the customer experience–via any channel.
“They are trying to understand the enormous data stores they have, deriving insights, and using this in automated marketing tools to target and personalise a customer’s experience,” Wilson said.
Online activities and social media provide banks with a wide range of new sources of information about their customers, creating a big data challenge that banks have yet to harness fully. Indeed, most banks are only at the early stages of integrating the vast amount of unstructured data they can now collect into information they can store and analyse.
“More advanced banks are using this data and technology to enable their staffs to have more meaningful and informed interactions with customers, be they in a sales process or responding to service requests,” Wilson said.
At National Australia Bank, the migration to a more agile digital publishing and marketing platform, and the use of a Web analytics platform, has helped to slash response times in digital channels.
“It has allowed us to make faster changes after listening and learning from our customer feedback, and we are ensuring our customers have the same seamless experiences through desktop or via a mobile device,” said Todd Copeland, NAB’s general manager, digital.
Another major challenge lies in how banks reach customers across multiple channels with tailored messages that resonate with them in a transparent, personalised way.
Wilson said marketing to mass segments is becoming less accepted and less successful. “Marketers need to attract customers by showing them they understand their needs and are able to assist them–helping customers to make more meaning from their finances and experience more meaningful interactions with their banks,” he said.
Another emerging trend is using storytelling to engage customers and position offers and products. For example banks are tapping core ethnographic principles to thoroughly understand the process a customer goes through when buying a home, and then designing the process around that.
What’s The Holdup?
The obstacles in the way of banks’ achieving these digital goals are largely internal, said Greg Carroll, who leads Accenture’s financial services business.
“Australian banks are still faced with three fundamental challenges, although compared to their global peers you could argue that the Australian banks are ahead of the pack on the first hurdle, which is that banks cannot take their eyes off the ball of running a stable and profitable banking franchise,” Carroll explained. “Second, banks need to deliver services that match the evolution of customer expectations at the scale of their franchises. This means scaling up their digital offerings and extending their value chain to serve the full spectrum of needs for their customers.”
Finally, Carroll said, banks need to change their capabilities to execute more effectively at speed and at scale.
“Unlike startups, banks need to maintain a discipline of execution for regulated capabilities, maintaining long cycle times and, like start-ups, they need to deliver new capabilities in rapid bursts,” Carroll said. “They also need to change their organisation’s culture to be bankers, technologists, and digital entrepreneurs at once. This will be the most fundamental challenge facing Australian banks from 2015.”
Wilson also pointed to internal and external challenges for digital marketers in the finance sector.
“Internally, the challenge is legacy systems, data stores, functional silos, and the way things are designed, built and delivered,” he said. “These all inhibit the speed at which new ideas and products are brought to market.”
Externally, the financial technology boom will be a great boon, Wilson predicted.
“Fin-techs are looking for parts of the value chain where banks are not delivering to customers’ expectations, or where the way things have always been done just doesn’t add up anymore,” he said.