Investing in the Correct Channels

With the continued acceptance of digital banking channels, it is important for financial institutions to ‘keep up with the times’. Even banks that promote personal service as a key part of their value proposition need to devote investment resources to their digital channels. Failure to do so may put the bank at risk of losing customers that represent future growth potential (ie. Millennials), who have already shown a preference for digital interaction.

Data from the 2014 Retail Banking Study provides an interesting case study on the impact of investing in digital channels. As shown in the graphic below, ‘Bank A’ has been investing heavily in digital channels while ‘Bank B’ has not. Bank A has seen a greater lift in customer satisfaction, driven by their technology improvements. It is also important to note that, despite a heavy investment in digital interaction, Bank A has also been able to significantly improve the branch experience.

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The chart below provides further evidence of the impact of investing in digital channels, as interaction scores for Bank A are significantly higher than those at Bank B. Additionally, the negative ‘gap’ in digital satisfaction between Bank B and the industry average has widened considerably.

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Finally, the real impact of investing in digital channels is shown below, as Bank A has seen their key loyalty and advocacy metrics improve, while Bank B has seen declines.

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‘Big Banks’ more attractive to Gen Y customers?

Data from J.D. Power’s retail banking study finds that 34% of Big Bank customers are within the Generation Y age segment, which is significantly higher than the percentage of Generation Y customers at Regional/Midsize/Community Banks.

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And while the Generation Y segment is currently less-affluent than other segments, they do present potential bottom-line growth as their income levels increase and they enter the market for mortgages, education plans for children, loans, etc.

The ability of Big Banks to provide functional ‘digital banking technology’ (website, mobile, advanced ATMs) is attractive to tech-savvy younger customers, and smaller institutions need to be competitive in this space in order to ‘steal’ younger customers from Big Banks.

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Are Bankers Ready For The Bank 3.0 Reality?

A Guest Post By:   Jim Marous, SVP of Corporate Development at New Control
In an exclusive interview about his newest book, Bank 3.0, Brett King discusses how change occurring in the banking industry is inevitable, speeding up and disruptive. From the mobile wallet wars to the impact of social media, tablets and the ‘de-banked’ and digital consumer, Bank 3.0 shows why banking is no longer a place you go to, but something you do.

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A great deal has happened since Brett King wrote Bank 2.0 in 2010. Two years ago, banks were under siege as the foundation of the banking system was close to collapse and the image of the industry as a safe and secure environment was being challenged. The impact of social media was just beginning to be understood by the financial services industry and mobile technology as we know it today was in its infancy. Heck, King even referenced his (now long gone) Blackberry in the first chapter of Bank 2.0.

With Bank 3.0, King discusses how consumers are less likely to view their retail banking provider in terms of capital adequacy, branch network, products and rates. Instead, customers are more likely to determine their banking partners by how easily they can access their accounts when they need to, and how much they trust their provider to execute business on their behalf. For those who read Bank 2.0, King’s new book retains some of the foundation and case studies, but updates several areas based on what has occurred (and will be occurring) relative to digital delivery, payments, social media, and the power of ‘big data’.

On the eve of the introduction of Bank 3.0 in the U.K. (introduction in the U.S. is scheduled for early November), I interviewed Brett King about his new book and about how he views the banking industry today. 

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What has occurred in the marketplace that warranted the publishing of Bank 3.0 just 2 years after your successful book, Bank 2.0?

Brett King: The marketplace has changed significantly around how consumers are engaging with their financial institutions. Compared to two years ago, traditional banks are challenged more than ever from a distribution perspective because of the movement to mobile and digital channels, and because they are not well positioned with their current bricks and mortar networks for a positive customer experience. The philosophy of banks, with their secure firewalls, operational structure and compliance mindset, is counter to how any other industry engages with customers in the digital space. Since Bank 2.0, the competitive environment has also changed a great deal, with partnerships being developed, alternative players and new bank start-ups being introduced, underbanked segments emerging, and social media merging with bank service engagement. People are beginning to take a functional and utility view of banking, which is why I say in the subtitle of the new book, ‘banking is no longer a place you go to, but something you do’

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Credit Card Website Best Practices – Viewing Account History

From our J.D. Power and Associates 2012 Credit Card Website Evaulation Study, the following viewing account history best practices highlight some of the exceptional techniques utilized by credit card issuer websites.

1.  Recent Activity Link

Chase and Discover Card offer a link to recent activity from the website’s landing page

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2.  Offer Multiple Formats for Statements

Discover Card allows customers to download statements in multiple formats.  Citi Cards offers customers navigation links from the log in field on the home page

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Credit Card Website Best Practices – Account Log In

From our J.D. Power and Associates 2012 Credit Card Website Evaulation Study, the following account log in best practices highlight some of the exceptional techniques utilized by credit card issuer websites.

1.  Offer Prominent Log-in Fields

Citi Cards and Chase use color and shading to draw attention to log-in fields

 

 

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2.  Streamline Navigation

Citi Cards offers customers navigation links from the log in field on the home page

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Peering Into the Future

A Guest post By Banking.com

Online banking carries with it the same question that accompanies every aspect of human activity moving online: Is it simply a more convenient way to do what we’ve always done, or is something new, particularly in the sense that we can do more, and therefore will do more?

There’s obviously no simple answer to this—the very act implies a level of customization that rules out any all-purpose conclusion. But if we still don’t know everything, what we do know now that we didn’t know even a couple of years ago?

A recent report from Javelin Strategy & Research has some answers, and they’re not particularly pleasant. Here’s the gist: Too many financial institutions still view online banking as the completion of a circle—consumers and (and maybe businesses as well conducting transactions, only doing it faster and more easily than by going to the bank. Javelin emphasizes that this “approach to online banking and bill pay has reached saturation because it is outmoded and unappealing in an era of customer-controlled interactive finance.” And that’s not all. Instead of new, technology-driven offerings drawing more business, Javelin theorizes, it might be even be a handicap: “The banking industry’s stale approach to online banking and bill pay leaves FIs particularly vulnerable to losing the 11% of consumers who are likely to switch primary FIs this year.”

The fundamental problem is the role of the bank in the equation—is it now simply a facilitator, the same way a basic piece of technology might be, or does it have more to offer? Continue reading ›

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How are Banks and Credit Unions Using YouTube?

In a recent New York Times special report titled  Banks Slow to Embrace Social Media, the author Sonia Kolesnikov-Jessop notes that “while many consumer goods companies have embraced social media sites like Facebook, Twitter and YouTube as new avenues to reach customers, financial institutions, and especially private banks, have been reluctant.”

While the article’s main point may not be too far off from reality, Jeffry Pilcher of The Financial Brand has detailed a dozen examples of noteworthy YouTube videos uploaded by financial institutions in his latest post titled, Best Of Bank Marketing On YouTube.  We were intrigued by the many creative uses of this social media channel, and thought you would be too!  Below are his top pics including overviews and commentary:

Boys choir sings options for automated phone tree

DNB recruited Norway’s most famous choir, the Norwegian Broadcasting Boys Choir, to sing all of the messages for its automated, touch-tone telebank. For the entire Christmas season, every word on DNB’s phone banking system was sung by angelic voices. The concept is brilliant, the execution is beautiful.

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Deutsche Bank guerilla experiment mocks ridiculous fees

This gutsy guerilla stunt from Deutsche Bank aims right at consumers’ pain points: fees and charges specifically in the financial industry that many people feel are absurd. In one experiment, a small boutique bakery introduces a one euro “entry fee” — just for walking in the door. Those who pay are surprised to learn there is also a one euro “exit fee.” Deutsche filmed a second experiment at a supermarket, where patrons were charged for things like using the conveyor belt in the checkout line and printing a receipt. It’s over the top, but it makes the point. Spot 1 (Bakery) | Spot 2 (Supermarket)

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Mom gets massage and makeover from bank

This two-minute video from Sainsbury Bank starts out like a documentary about the life of a busy mother. She’s a hardworking woman, but clearly worn out from her dedication to her three young children. Sainsbury ambushes her with their Makeover Mobile, a spa on wheels. She’s a lovely person, so you feel really good for her at the end when she steps out looking beautiful. Her expressions of appreciation are subtle, but incredibly powerful; it’s very engaging. It’s rare to see banks capture such emotion in their marketing.

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It’s Time to Change Your Social Media Story – Part 2

By Mark Zmarzly, VP of Financial Services at ACTON Marketing

In the previous post It’s Time to Change Your Social Media Story – Part 1 , I made a brilliant argument for the end of the Internet.  Actually, I wrote about how Facebook’s timeline changes should give all financial institutions reason to reconsider their social media strategies, but I think you could read between the lines.  The time for reinvention is here, as is the road map below.

If you have the guts (and resources) to reinvent your narrative, here are the things to think about as you redesign and redefine your story:

  • You are not the main character in your story…
  • Your story (updates, cover photos, apps, etc) needs to reflect your customers, not your bank
  • People identify with those like them (more accurately: with people slightly better than themselves), not with their bank

Who are the main characters in the stories below?  Which story would you rather read?

Your voice needs to be authentic

Every time I see a scripted wall post that’s repeated over and over “Thank you for bringing this to our attention. Please contact us at customerservice@anybank.com so we can look into your issue and work with you to resolve it.” I want to jump right into my laptop screen onto the Information Super Highway and drive down to a town I like to call Shoot Myself. Yes, discussions about personal account level data need to be taken offline but this voice is your narrator and he/she is inauthentic and not engaging. Amber Farley from Financial Marketing Solutions adds, “Not only does the voice of the bank need to be authentic and relevant, but it needs to be reflective of the bank’s overall brand. Banks shouldn’t jump into social media pretending to be something they aren’t.”

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It’s Time to Change Your Social Media Story – Part 1

By Mark Zmarzly, VP of Financial Services at ACTON Marketing

Here’s something most of you don’t know about me: before I entered the financial services industry, I was an English teacher and fiction writer. Why you don’t know this about me can be chalked up to one of these reasons:

  • We have a virtual relationship only. (“What are two good-looking Gravatars like us doing on this banking discussion board? Let’s take this party over to MySpace.”)
  • You rarely call anymore just to talk.
  • This background information isn’t relevant to what I do on a daily basis.

If it’s due to the first two items, I’ll forgive you – though it wouldn’t kill you to pick up the phone once in awhile or at least post on my Facebook wall. If you didn’t know about my storytelling past, then that’s about to change.

It’s about to change because of a game-changing move that Facebook made over the weekend in what appears NOT to be an elaborate April Fool’s Day joke. Of course I’m referring to its change to timeline. Or simply put, the new way to “tell your story.”

Facebook’s change to timeline may seem like a simple process change at first glance. You’re no longer allowed to decide where your new prospects will land (welcome page redirection is gone unless you use URL app redirects); you’re limited (or barred depending on how you follow the rules) in your calls to action; and you’re no longer going to have the same fan reach you used to enjoy (unless you pay for it).

I asked Ron Shevlin for his input on the changes: “The restrictions that Facebook is placing on brands — e.g., limits on apps and tabs, throttling, pinning and starring limitations — will only make it harder for brand pages to systematically support user goals for using social media. These goals include finding information about interests, interacting with groups that share my interests, and socializing with friends and family.”

He’s right, and that means this story seems to suck for financial institutions. But, perhaps it’s an unexpected gift? I argue that these changes to Facebook have given you the perfect reason to examine (maybe for the first time), the story your Social Media efforts are telling about your bank. Upon examination, most FIs would benefit from ditching their current social media efforts and starting a new story.

This is because most stories that are being told by financial institutions’ social media channels are boring and fail at engaging storytelling. Facebook’s timeline change has given everyone the opportunity to start from zero. I’d go so far as to advocate you spin your social media efforts off from normal marketing activity, give them their own P&L Statement, and 18 months to turn a significant profit. But in this case I’ll meet you half way and say that you MUST take the following steps to evaluate how your old tactics (or brand and social media strategies if you have them clearly defined) fit into the new storytelling future.

Step 1: Examine your cast of characters.

Engaging characters are the heart of any good story. You know who’s not a good character? The Bank! Other characters that may be better choices for the lead: anyone else. Banks and bankers are not engaging characters, please realize that. But, your customers, the stories they can tell when given the chance, when given (God forbid) a product or service you have that helps them craft their stories, can be engaging. People want to engage with unique characters in the hopes that they will learn new things about themselves. Ask what can your financial institution, its products, and/or its customers teach people about themselves, about savings money, about life? Be bold with your questioning and subsequent character choices! See a great example here (thanks for the reminder on this on Jeffry Pilcher!):

Jeffry Pilcher adds, “this got them a lot of good, global exposure (e.g., name awareness). Hopefully “going viral” was their goal.”

Step 2: Establish a unique voice.

If the updates on your Facebook page, blog, or Twitter stream could appear on any bank’s page, then your voice isn’t unique, engaging, or worth your effort. People listen to stories told in voices that engage them on multiple levels. They want a guide that will pull them into a new world on an emotional level or, at a minimum, will tell them something that they’ve already seen except in a new voice, from a new point of view. Third person omniscient is a bold choice in fiction…but can be wonderful, haunting, and will stay with you for years (The short story Merry-Go-Sorry by Cary Holladay has been with me since 2004). Your choice of voice needs to be bold because not everyone is good at storytelling.

Step 3: Insure that your storytelling is visual.

Facebook’s new changes have given priority to visual elements over text. Long gone are the days when “What’s everyone doing this weekend?” or another “Currency Related Trivia Tuesday Question!” will gain you much notice. AND GOOD FOR FACEBOOK in that regard! I follow about 100 FIs on Facebook and am tired of feeling bad about our industry…bad for the employees who are struggling to find trivia bits to toss out randomly every week to their hundreds of bored fans.

Step 4: You have to tell a crappy story sometimes…before you can get to where you need to go.

As a former participant in entry level fiction, I’ve written a story or two that ended in the tragic suicide of the main character. This story ending is so overused by early fiction writers that many teachers now add, “Stories cannot end in a suicide” to the class syllabus. But those stories – however tragic to read as the teacher – are necessary in your development as a writer. You need to hit bottom, and kill someone, in order to learn. Without naming Facebook page names here, I’ll say that the vast majority of community FIs in America have hit bottom. The good thing is that there’s nowhere to go but up!

Step 5: Sometimes a crappy story is just a crappy story…and it needs to die.

Be prepared to kill your story. As a writer, I’ve walked away from many a story. Whether at page 1 or page 53, sometimes it’s best to just walk away from the entire story and let those characters live in suspended animation indefinitely. Now, you most likely can’t walk entirely away from your current social media efforts, but you can re-invent them based on the new changing landscape.

According to Jeffry Pilcher of TheFinancialBrand.com, “Most FIs have no clue what ‘their story’ is. And even if they thought they knew, it isn’t likely a story that is differentiated, engaging and/or credible.”

If you’re in that boat – which is admittedly a hard fact to face but would be just the revelation you need to evolve – then Facebook has given you a gift. This gift is a revolutionary change in the main staple of social media marketing that justifies a deep reassessment of the bones of your story, its characters, and the voice of your tale.

Look for Mark Zmarzly’s follow up post about the process you need to go through to reinvent your story.

About Mark Zmarzly:

Mark Zmarzly is VP of Financial Services at ACTON Marketing, and an accomplished marketing, business development, banking, and creative professional with demonstrated success solving customer acquisition, marketing, and profitability problems. He has worked with financial institutions from 1 branch up to 1,700+ branches in the areas of marketing, copywriting, account management, consulting, teaching, social media, and business development. You can find his insights on issues facing the financial industry at http://ihelpbanks.com/ and on Twitter @BankMarketing. You can also connect with him On LinkedIn at http://www.linkedin.com/in/markzmarzly.
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