Will PFM Engagement 'Tricks' Be A Customer Experience Treat?

It's Halloween. You've stocked up on the best candy and your house is decked out in ghoulish decorations as you prepare to handle the rush of excited children. Unfortunately, despite all of the preparation, nobody is knocking at your door.For many financial institutions, this is the same feeling they have had as they have introduced personal financial management (PFM) tools to a less than overwhelming consumer response.  

Arguments across the industry continue over the potential impact and adoption of PFM tools. Despite topping the charts in hype and media coverage over the past several years, some believe that PFM may always fail to deliver in terms of usage rates.

A 2012 survey by the Federal Reserve shows that 21 percent of consumers currently use a PFM tool (this includes any program or website used to track household finances). Aite Group shows that the percentage may be closer to 27 percent when all PFM options are taken into account. However, there is still potential for growth in this area, with an additional 14 percent of consumers indicating a desire to use PFM tools.

Aite Group, Sept. 2012

Best Banking Blogs Recognized

Bank Marketing Strategy was just recognized as one of the Best Banking Blogs by The Financial Brand, the foremost online publication for bank and credit union marketers. In addition to receiving the Editor's Choice Award, Bank Marketing Strategy was also a Top 5 recipient of the prestigious Reader's Choice Award.

To be included as a winner in 2012, nominated blogs must have had specific relevance to marketers in the banking or credit union industries, been in existence for a minimum of 12 months with consistent content and an RSS feed. It was also noted that all of the blogs selected needed to display excellent writing skills with a deep knowledge of the financial services industry.

Jeffry Pilcher, publisher of The Financial Brand, stated when asked about the recognition, "Bank Marketing Strategy is a blog that combines industry research with real world applications that can be used by financial marketers daily. It is also one of the few blogs that is not a commercial endeavor, but is developed on a personal level." 

Pilcher went on to say, "If I had to pare down to just five blogs that I followed, Bank Marketing Strategy would definitely be one of them. When the blog fell silent for a couple months earlier this year, I was worried that the banking industry was losing one of the best blogs out there. But, Jim's come back with a fury, and he's at the top of his game."

Bank Marketing Strategy was developed more than 3 years ago as a way for me to better understand social media while providing an outlet for my desire to research, write and share insights with the industry I have been part of for (significantly) more than 20 years. It has been an ongoing passion, affording me the opportunity to meet and consult with some of the best people in the industry (many of whom are recognized by The Financial Brand for their blogging efforts).

I would like to thank (and congratulate) fellow bloggers Ron Shevlin, Brett King, Bradley Leimer, Matt Wilcox, JJ Hornblass, Liz Lum, Chris Skinner, Serge Milman, Christophe Langois, Karen Licker, Jim Bruene, Randy Smith, Jim Van Dyke and most importantly, Jeffry Pilcher for your ongoing encouragement and support.

At a time when our current elections involve a great deal of mudslinging, lies and putting down the other nominees, I can definitely say that all of the other blogs recognized are excellent resources I go to regularly and worthy of recognition. 

I would also like to thank all of the readers of The Financial Brand who voted to recognize Bank Marketing Strategy as a top 5 banking industry blog worldwide.

Banks Include Retargeting As Part Of Digital Marketing Strategy

While not a new tactic in the online world, retargeting is gaining momentum from more than just e-commerce players. 

Due to the ability to target interested consumers as they proceed through the purchase funnel, financial marketers are increasingly leveraging ad-tech advancements to influence financial service buying behavior.

Over the weekend, my son and I were looking at new car options on Edmunds.com. After about 45 minutes on the site, I decided to leave the virtual showroom only to be 'stalked' by car ads for the next two days as I visited totally unrelated locations on the web (I am sure the retargeting won't end soon). Even my entry into the Edmonds.com site was a bit unnerving since the front page of the site was promoting the newest version of the car currently sitting in my garage. 

A coincidence? . . . Not a chance. In fact, illustrating the digital geotargeting prowess of the team at Edmunds.com, the first search I did for the category of car I might be interested in highlighted a sponsored ad from the brand of the other car in our garage . . . from a local dealer. 

It comes as no surprise to today's consumer that the internet knows almost everything about us due to the tagging, tracking and monitoring that is done on an amazing amount of 'big data' flowing in the digital universe. Technology and digital tools have the ability to process our digital footprints almost as fast as we surf the web, predicting what we might do next and what we may be interested in purchasing.

While becoming almost Orwellian in it's omniscience, and a very powerful tool for digital marketers, the process is not always perfect. For instance, because of my profession and my search habits, I am often targeted for financial services I don't need, a new brand of smartphone I don't want and a candidate I would never vote for. Worse yet, I am sometimes targeted for something I already bought (an example of marketing without sufficient channel integration).

Despite the occasional mistargeting, the 2012 Display Advertising Study from Bizrate Insights found that the majority of consumers (60 percent) were neutral on the tactic of retargeting, 25 percent appreciate the ads because they "remind [them] of what [they were] looking at previously, and only 15% do not like the process." Also noted was the convenience of being able to visit a web site users already were intending to visit (28 percent), and the proactive offering of more information on a desired product or service (21 percent).

From a marketers perspective, retargeting allows an organization to customize the overall prospect or customer experience and maintain consistency across all customer touch points. In other words, the retargeting does not need to stop with online ads, but could extend to email and even direct mail as part of an overarching cross-channel strategy.

Are Bankers Ready For The Bank 3.0 Reality?

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.

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.

As Online Banking Acceptance Grows Is Mobile Banking Reaching the Tipping Point With Millenials?

A new survey by the American Bankers Association (ABA) found that for the fourth year in a row, consumers named the Internet as their favorite way of conducting banking business, with 39 percent of respondents saying it is the method they 'use most often to manage (their) bank account(s).'  The second most popular way to bank – visiting a branch – continued its downward trend to 18 percent from 30 percent in 2008.

In addition, this year’s survey showed a sharp increase in the popularity of mobile banking, driven mainly by customers in the 18 to 34-year-old age group. Use of the mobile channel by millennials escalated from 4 percent in 2010 to 15 percent this year. Conversely, the use of branches by this age group during the four-year period dropped from 20 percent to 11 percent, with ATM use also dropping from 32 percent to 14 percent. Overall, mobile banking is now preferred by six percent of customers, a 100 percent increase from 2010.

The distribution of primary channel use this year was as follows:

• Internet Banking (laptop or PC) – 39% (36% in 2010)
• Branches – 18% (25% in 2010)
• ATMs – 12% (15% in 2010)
• Mail – 8% (8% in 2010)
• Telephone - 9% (6% in 2010)
• Mobile (cell phone, Blackberry, PDA, I-Pad, etc.) – 6% (3% in 2010)

Monetizing Mobile Banking

As consumers are becoming more comfortable with mobile banking and mobile payments, financial institutions and technology providers are beginning to develop and deploy more innovative solutions with a focus on gaining market share, reducing costs and realizing new sources of revenue. It is clear that the question is no longer whether mobile banking and mobile payments will be important to a bank's business (84% of respondents to a recent KPMG survey said that it is). The question has become, can banks realize the full potential of the channel from a customer development and revenue perspective.

To this end, one of the best sessions I attended last week at the BAI Retail Delivery Conference was around the opportunity for banks to monetize mobile banking. Presented by Matt Wilcox, senior vice president of eBusiness strategy for Zions Bancorporation and Drew Sievers, CEO of mFoundry, the session focused on the opportunity for mobile banking to move from simply reducing costs to actually being the foundation for revenue generation. 

Mobile Banking Evolution

At the beginning of the presentation, Wilcox presented an overview of the mobile banking evolution that has occurred over the past several years. According to Wilcox, mobile banking has evolved from being simply a channel innovation to providing the potential for significant channel migration cost savings as shown below. He noted, however, that banks should not build business cases around 1:1 transaction displacement, since many consumers increase their overall transaction volume as they move to more automated channels. This is similar to what occurred with ATM volumes that increased at a much higher rate than branch transactions decreased in the past.

Source: TowerGroup and Fiserv (2010)

The Art of Bank Innovation According to Guy Kawasaki

One of this year's keynote speakers at BAI's Retail Delivery Conference was Apple evangelist and innovation guru, Guy Kawasaki who is also the founder and CEO of Garage Technology Ventures. During his very engaging and at times irreverent presentation, Guy broke down the art of innovation into 10 easy -- and not so easy -- steps. He explained to the room full of bankers and industry service providers that while these steps should be followed, even he has not been able to always follow his own advice in his career.

1. Make Meaning - Great innovation occurs when a person/company decides to make the world a better place. Great companies are able to make meaning, and as a natural outgrowth, also make money. One of Guy's examples was Apple's development of innovative products that made the world more productive and creative. It was interesting for me to realize that most of the banks recognized in the Finacle/BAI Global Banking Innovation Awards this year developed products that actually improved the financial well being of their customers.

Bank Brand Loyalty Tested With Every Move

When it comes to lifestage marketing events, new movers have always represented a significant opportunity and risk. This is because consumers who move tend to significantly increase spending in a variety of categories while also changing their brand loyalties as to where they shop, eat, buy personal services and even bank. 

But, with new home sales in 2011 being 80 percent below the peak in 2005 (making the number of existing and new home sales the lowest in almost two decades), should bank marketers still invest in this target audience? Do consumers still spend at the same rate as in the past? Is this target audience even scaleable?

Interestingly, despite the ongoing reduction in home sales, the number of people moving has steadily increased since mid 2009, indicating that consumers in transition still represent both a risk and opportunity for marketers. In fact, the New Mover Report 2012 from Epsilon found that consumers continue to spend thousands of dollars in the months following a move, representing a valuable opportunity for those marketers who can identify and effectively communicate to new movers. 

The study also found three major themes when they looked at consumer spending habits, brand affinity and channel preferences associated with a move from one location to another:

• Consumer brand loyalty is tested during a move, with new movers being twice as likely to change brands or service providers than non-movers.
• New movers have an interest in changing and/or upgrading services such as banking, credit cards and insurance after a move.
• Direct mail continues to be a highly valued channel for receiving information during a move, and is even highly valued by Gen Y consumers.