Finance
3 Strategies Financial Institutions Can Use to Enhance Their Brands
Published : 2 years ago, on
By Bryan Dohmen, director of strategy, Hero Digital
Modern banking is more than deposits and withdrawals. In decades past, people relied on local community banks for all their needs — from checking accounts to credit cards to small business loans — and stayed with a single institution their entire lives. But in the digital age, financial customers are more mobile because it’s easier to shop around. These days, customers can compare options to not only find the best rates, but to also determine how a financial product aligns with their personal values and lifestyles.
To remain competitive and attract new customers, financial institutions (FIs) need to design products that appeal to customers’ personal values and aspirations. It’s time to think outside the box about how to inspire your customers through personalized offerings and innovative digital experiences.
Financial institutions need better branding
Customers expect more from their financial institutions. They don’t just want a place to park their money. Instead, they want to do business with a brand that aligns with their values and helps them actualize their dreams and aspirations.
In fintech, organizations are developing brand stories to differentiate themselves from the competition. For example, Ellevest is an investment firm made for women by women. Their brand appeals to women who want to support and empower other women.
Other fintech providers attract customers through brand stories that focus on shared identities or common interests like social causes. This targeted branding adds value to the customer experience by connecting customers to the mission of the organizations they choose to bank with.
Financial institutions can take a page from the fintech playbook. It’s time for financial institutions to level up their branding to drive customer loyalty and offer opportunities that align with customers’ financial goals.
Personalizing incentives for modern customers
Customers crave personalized experiences from brands. Introducing rewards programs or investing in digital innovation can deliver the tailored options that customers want.
Here are three strategies that can help you build a brand that customers want to support:
1. Reward personal spending habits Everyone has different interests — some people like to dine out and others like to take big vacations. The key is to provide a variety of financial products to reward each customer’s personal spending habits.
For example, Capital One makes recommendations on which credit cards would be most rewarding based on spending habits. The prominent filter on their website makes it easy for potential customers to compare and narrow down options to find the credit card that best meets their criteria.
You can even take it a step further and recommend new products to your existing customers based on what you know about their spending habits. For example, if 50% of a customer’s monthly charges are at restaurants, you could offer them an incentive to apply for a new rewards card that offers more cash back on dining. The personalized card recommendation adds value, increasing that customer’s loyalty to your business.
2. Create programs that support social causes. It’s not all about cash back. Younger generations also want to work with brands that support causes they believe in. You can help customers fulfill their goals by making it possible for customers to donate their cash back rewards to their favorite charities or causes. You could even consider matching a portion of donations to help your customers’ contributions go further.
Customers also want greater transparency about how FIs invest their money, and many seek out banks and investors that make it easy to support environmental, social, and governance causes. Aspiration, for example, is a neo-bank that has built its entire brand around combating climate change — an attractive position for customers who want to ensure their savings don’t inadvertently fund fossil fuel companies. The company also pledges to plant a tree for every purchase made with an Aspiration debit or credit card and rewards purchases at sustainable businesses, empowering customers to give back every time they shop.
3. Develop digital experiences that inspire customers Customers encounter modern, robust, and intuitive digital experiences every day, and they expect the same from their financial institutions. In fact, Mckinsey found that four out of five Americans used some form of digital payment in 2021. And the global digital banking market is expected to reach $33.5 billion by 2027.
You can take advantage of this trend by providing unique digital experiences that help your customers create long-term financial goals in a dynamic way. Spending is always more fun than saving because it provides instant gratification. But what if a bank could create a virtual reality experience that allows customers to feel that same rush of satisfaction when they save for long-term goals like buying a house or taking a dream vacation? While the goal may seem far away, by showing overall progress and keeping the customer engaged with the digital experience banks can help customers manifest their dreams through digital applications. And you can help them stay focused and motivated to continue on their financial journeys.
A quality brand experience sets your financial institution apart in the marketplace. And it starts with designing products and incentives that connect to your customers on a personal level and helping them build the futures they want for themselves.
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