Tom Smith, head of biddable media at mporium
The world of banking and finance has been changed in innumerable ways by the impact of technology. Consumers are no longer willing to accept a substandard user experience: the benchmark has been set by the likes of Uber and Amazon, forcing financial services firms to invest in digital transformation projects.
2016 was dubbed ‘the year of the mobile banking app’ as people’s banking behaviour changed, with consumers reducing use of high street branches, whilst telephone banking has also seen a dramatic decline. Consumers are now engaging more and more with their banking apps, and banks should be utilising this touchpoint to communicate with the consumer. In addition to this, the growth of mobile payment solutions such as Apple Pay and PayPal have accelerated this digital banking revolution – with the UK being a particular leader when it comes to mobile payments.
Reduced friction in switching bank accounts due to the Current Account Switching Service (CASS), means that consumers are less likely to remain loyal to a bank over the long term. This has encouraged new entrants such as Metro Bank and Atom Bank that are building their businesses on the basis of changing consumer behaviour: Atom Bank focusing on its digital offering and Metro Bank focussing on providing unrivaled in-branch customer experience. Meanwhile, the door has been left wide open for start-ups such as AI assistant Cleo – who recently received another £2m in investment – to drive a wedge between high street banks and consumers, providing them with valuable financial advice. It has never been more important for the established players to communicate with, and to understand their existing and potential customers, focussing on building 1:1 relationships with their consumers, using first party data and external signals to deliver relevant and contextual messaging.
It’s important that banks look further than their online banking offering or offline experience, including how digital can provide the means to communicate with customers at the right time. The use of social media to deal with immediate customer issues is a well trodden path, but much more could be done in understanding the relationship between what consumers watch on TV and their mobile search behaviour.
A few weeks ago for instance, during a recent holiday themed episode of Martin Lewis’s The Money Show, there was a huge spike of people searching for the Halifax Clarity Credit Card. The card was featured in the program, it provides the consumer with a simple rate structure and no fees for use abroad. As consumers have become more and more used to second screening, their first, almost unconscious thought is to search for whatever has sparked their interest or curiosity. There is often a high degree of commercial intent behind those searches.
Therefore when Martin Lewis extolled the benefits of the Clarity Card, it was only natural that it acted as the stimulus for a large number of people to search for the card. Prior to this stimulus, Halifax could have pushed the Clarity Card offer to eligible consumers using its app, who fit a certain profile, rather than relying on the consumer to carry out the search. Other banks could also have utilised this micro-moment as well, and could have pushed similar options to increase customer acquisition.
But it’s not just products or services that are directly mentioned on TV that prompt searches. For instance, all sorts of property and lifestyle shows, prompt search queries for mortgage calculators, personal loans and home insurance. Whilst, ‘A Place in the Sun’ unsurprisingly gives us the holiday blues, leading to spikes in searches for particular destinations features, or generic terms such as ‘summer holiday’ and ‘cheap flights’ or more importantly for the financial services sector ‘travel insurance’ and once again ‘personal loans’.
Most financial services firms aren’t taking advantage of this change in consumer behaviour and aren’t optimising their search marketing, getting to the top of search rankings for the most value generic terms in the moments that matter.
This is because for brands, it can be extremely expensive to have an ‘always-on’ approach to generic search terms. In the financial services sector, terms such as ‘credit card’ or ‘insurance’ can be very expensive and competitive, so the return on constantly bidding high for these terms, would not justify the investment. As a result, brands and agencies often put less resource into generic search despite it providing far greater volume of search than brand terms.
This doesn’t need to be the case – by identifying and mapping against these ‘micro-moments’ where consumers are most likely to search for particular products, and using search budget strategically at these moments, brands can make sure that they are using search advertising to its full capability.
If financial services firms are to keep up with their customers they need to be implementing smart tech around search, because you can’t afford to be playing catch-up when your competitors have cracked text search and are focussing on solving for how to best optimise for the growing volume of voice search.
European shares end higher on strong earnings, positive data
By Sagarika Jaisinghani and Ambar Warrick
(Reuters) – Euro zone shares rose on Friday, marking a third week of gains, as data showed factory activity in February jumped to a three-year high, while upbeat quarterly earnings boosted confidence in a broader economic recovery.
The euro zone index was up 0.9%, with strong earnings from companies such as Acciona and Hermes brewing some optimism over an eventual economic recovery.
The pan-European STOXX 600 index rose 0.5%, as regional factory activity was seen reaching a three-year high on strong demand for manufactured goods at home and overseas.
Another reading showed the euro zone’s current account surplus widened in December on a rise in trade surplus and a narrower deficit in secondary income.
Still, the STOXX 600 marked small gains for the week, having dropped for the past three sessions as investor concern grew over rising inflation and a rocky COVID-19 vaccine rollout.
But basic resources stocks outpaced their peers this week with a 7% jump, as improving industrial activity across the globe drove up commodity prices.
“This week’s slightly adverse price action has all the hallmarks of a loss of momentum temporarily and not a structural turn,” said Jeffrey Halley, senior market analyst at OANDA.
“There is not a major central bank in the world thinking about taking their foot off the monetary spigot, except perhaps China. (Markets) will remain awash in zero percent central bank money through all of 2021 (and) a lot of that will head to the equity market.”
Minutes of the European Central Bank’s January meeting, released on Thursday, showed policymakers expressed fresh concerns over the euro’s strength but appeared relaxed over the recent rise in government bond yields.
The bank’s relaxed stance was justified by the euro zone economy requiring continued monetary and fiscal support, as evidenced by a contraction in the bloc’s dominant services industry in February.
The STOXX 600 has rebounded more than 50% since crashing to multi-year lows in March 2020, with hopes of a global economic rebound this year sparking demand for sectors such as energy, mining, banks and industrial goods.
London’s FTSE 100 lagged regional bourses on Friday due to a slump in January retail sales and as the pound jumped to its highest against the dollar in nearly three years. [.L] [GBP/]
French carmaker Renault tumbled more than 4% after posting a record annual loss of 8 billion euros ($9.68 billion), while food group Danone and German insurer Allianz rose following upbeat trading forecasts.
(Reporting by Sagarika Jaisinghani in Bengaluru; Editing by Sriraj Kalluvila and Shailesh Kuber)
ECB plans closer scrutiny of bank boards
FRANKFURT (Reuters) – The European Central Bank plans to increase scrutiny of bank board directors and will take look more closely at diversity within management bodies, ECB supervisor Edouard Fernandez-Bollo said on Friday.
The ECB already examines the suitability of board candidates in a so-called fit and proper assessment, but rules across the 19 euro zone members vary, so the quality of these checks can be inconsistent.
The ECB plans to ask banks to undertake a suitability assessment before making appointments, and they will put greater emphasis on the candidates’ previous positions and the bank’s specific needs, Fernandez-Bollo said in a speech.
The supervisor also plans more detailed rules on how it will reassess board members once new information emerges, particularly in case of breaches related to anti-money laundering and financing of terrorism, Fernandez-Bollo added.
Fernandez-Bollo did not talk about enforcing diversity quotas, but he argued that diversity, including diversity in gender, backgrounds and experiences, improves efficiency and was thus crucial.
“Supervisors will consider furthermore all of the diversity-related aspects that are most relevant to enhancing the individual and collective leadership of boards,” he said.
“Diversity within a management body is therefore crucial … there is a lot of room for improvement in this area in European banks,” he said.
(Reporting by Balazs Koranyi, editing by Larry King)
Where are we with Open Banking, and should we be going further?
By Mitchel Lenson, Non-Executive Chairman, Exizent
Open Banking has the power to revolutionise the way we manage our money, but most (65%) consumers are still not aware of it, while many financial institutions continue to treat it as an obligation rather than an opportunity.
For Open Banking to truly reach its potential, consumers need to have more trust in its benefits. However, this will only happen if banks and other financial institutions start to embrace it, rather than simply accept it.
Covid-19 has proven to banks that digital banking and open finance innovation is not simply a ‘nice to have’. It is vital for their own survival. With so many challenger banks now coming into the market, many of whom have entirely digital models and therefore invest heavily in technology, banks are starting to become aware that if they don’t embrace it, they’ll get left behind.
So, fuelled by a mixture of competition and Covid-19, banks are starting to realise that Open Banking is not about giving away valuable data, but it is about collaborating with third party fintechs to explore the endless opportunities data sharing can bring – to all sides.
By making open finance easier for developers, banks can not only save time and money by improving their own services but help create useful solutions that add real value for their customers.
Open Banking for all?
There is one, yet untapped area of consumer finance that could be immeasurably improved by Open Banking, and that is estate administration.
Recent research from Which? found that many executors contend with delays, errors and poor knowledge from their banks during the probate process. Our own research shows that most legal professionals admit the process does not work as it should, and the time it takes to complete probate is unacceptable.
Like the Which? survey, we found that the main issue is the administration involved, with most legal professionals saying that the time it takes for financial institutions to get back to them with the information they need is the main cause of delays.
Given that the system is not working for consumers, something clearly needs to be done. The good news is that the technology and data is already available – we just need to harness it to create a better system.
That is why we are developing the first ever platform to connect executors, legal professionals, and financial institutions to create a better, quicker, and more secure probate experience for everyone.
Our first release of the platform – a bespoke cloud-based solution to enable legal services firms to integrate directly with financial institutions making information gathering and processing more straightforward – was released in 2020. We are now building on that foundation to accelerate our development work with financial institutions to deliver additional value for all sides.
We also see huge potential in working with banks to utilise the digital financial infrastructure, powered by Open Banking, to improve things even further. But there is one, fairly sizeable issue – currently, Open Banking consent ceases at the point of death.
Is it time for legislative change?
Open Banking is not as open as is should be for those who can give consent, so we are certainly some way off from Open Banking for the deceased. However, the more that banks acknowledge Open Banking and its potential and are prepared to collaborate with third party fintechs to develop better experiences for consumers, the more likely we are to get to a point where we can tap into that potential to improve things for the bereaved.
Many of the problems – highlighted by Which? – that consumers face when managing someone’s estate could be reduced significantly if open finance continued to apply to the deceased.
Open Banking provides a huge opportunity to speed-up and reduce friction for loved ones faced at some of the hardest moments of their lives, and there is a strong argument here for the current position to be reviewed to enable better access to a deceased person’s assets.
With our current platform, we are showing how technology is playing an incredibly significant role in dealing with the complex, tangled process that is probate and the potential of open finance in radically enhancing what we are already doing cannot be understated.
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