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How can banks win in the digital era

By Mike Fantis, VP Managing Partner, DAC; helping national brands deliver a local-up strategy

Our obsession with our mobile phones has caused a sea change in consumer behaviour – but banks, by and large, have been slow to react. In that time, the mobile era has spawned a series of nimble digital rivals who have disrupted traditional banks’ business models, from Monzo to Revolut.

It has also led to a quieter and less visible revolution in marketing, from an analogue broadcast to a data-led digital approach. Banks have been losing out to date, but are actually well placed to succeed in this new world with their natural physical advantages.

Marketing 1.0 for a 3.0 world

The traditional marketing approach from a bank goes something like this. Millions are spent on an expensive broadcast ad with a catchy new slogan. Prime TV slots and national print ads are booked. This may be complemented with some expensive (but generic) online advertising to further promote the message.

Perhaps prompted to take action, potential customers decide to visit the most relevant iteration of the brand, their local branches, to find out more. That’s when the problems start. The local version of the website has no information on opening times for face-to-face advice. There is no breakdown of services on offer (or, in the case of Barclays, no localised branch pages at all).

Often banks will not keep their opening hours and other local data up to date. The outcome? Customers visit the branch only to find it’s either closed or they have an interminable wait to speak to an advisor. They silently vow never to return. Banks that have spent millions let themselves down in the final furlong by failing to respond to the local customer’s needs.

The physical advantage

The digital era has seen marketing power taken from big organisations and put into the hands of consumers. Rather than wait to be told about a product or service, modern consumers will use search engines to seek out the information they need. The explosion of mobile-first internet use has also meant 50% of all of these searches now carry local intent. This is because our phones are our navigational tools as well as our information services. In modern digital marketing, the

“where” is increasingly as important as the “why”.

Banks can attract the interest of potential customers and then engineer opportunities to sell products face to face. This is powerful. A study by financial advice network Openwork revealed that 71% of people had concerns that robo-advice may not be entirely appropriate for their needs, despite the fact it offers a low-cost alternative for businesses. The survey found nearly three quarters of those quizzed expressed a clear preference for human interaction when obtaining financial advice.

But by merely broadcasting information and not driving a customer to a branch, banks are showing they aren’t listening to the needs of their customers – passing up a key opportunity for engagement, particularly in an area like mortgage advice.

The challenge lies in the legacy of banks and their size. Retail and online banking divisions often run as separate entities. This siloed, top-down approach does not put the customer at the centre of the offering. In contrast, digital is most assuredly not a separate entity, but how most people live their lives. Banks have been left like a slow-moving supertanker in an era of speedboats.

Local search for local people

Conduct an online search for mortgage advice in any region of the UK and you’ll see evidence of this failure to adapt. It is extremely unlikely you will find any bank appear in either paid or organic results. The brands that do rank are the smart digital operators, despite having no physical infrastructure in those areas. This is a wasted opportunity. Someone searching for mortgages in Farringdon is telling you they want to speak to an advisor in Farringdon.

Ensuring you appear on local search results is also a smart commercial strategy. A quick view of under 400 mortgage-related keywords shows over 3 million impressions per month. To compete for the top positions across all of these keywords on a national basis could cost close to £600k per month. No brands can afford to saturate 100% of this market, so it’s important to be more efficient and effective with your targeting. The more localised your keyword advertising, the more cost effective it is – and, crucially, the more tailored the experience becomes.

With vast amounts of data available, banks are missing the opportunity to tailor their messaging and product communications by region or location. A quick glance at historical research reveals that there are very different mortgage trends in Scotland, where people have been interested in remortgaging their properties, compared to Northern Ireland, where there has been a surge in searches relating to first-time mortgages.

With localised branch pages, banks are able to generate dynamic, locally relevant content and give prominence to the products that are more likely to be of interest. From a paid search perspective, they can pick and choose keywords by region to help budgets generate the best ROI possible.

Improving the branch experience online and instore

Ranking better in local search results is just the first stage – it means nothing without corresponding improvements in the customer experience, both online and instore. Unfortunately, the local iteration of the brand is often entirely un-optimised for the user. There is a lazy assumption that banks can merely trade on their established brand equity. That’s why an institution like Barclays doesn’t actually bother with individual branch pages. In today’s local-first SEO world, this is a big miss. The death of the local branch is inseparable from the wider context of traditional banking brands not listening to what people really want in the digital age.

Other industries with traditional legacy businesses have done very well within this realm and banks can learn from them. Google “Tesco near me” and you will see a Google My Business (GMB) listing with all the services they offer and where you can access the local store.

For banking-related searches, this information is often not available or optimised. For instance, banks miss out on the opportunity to communicate multiple opening hours per branch. The counter service desk may have different opening hours compared to the ATM vestibule, while individual services providers like mortgage advisors and savings advisors may have different operating hours too.

The questions that need to be asked to begin to address this include: what are peoples’ expectations? Are you providing them what they need? Can you pre-book appointments? When are people searching for opening times? If it’s at weekends, staffing up at these times would be sensible approach for matching supply with demand. The experience in a branch is often disappointing, but the digital signals could improve this dramatically.

Playing to the advantages

Banks have a series of formidable plus points. With the right strategy, they can start to truly optimise the local experience.

  1. Trust is critical in this new world, and banks often have reputations that have been decades or even centuries in the making. This alone is not enough – as we have seen – but brand equity is well established, which is not something the digital disrupters can say.
  1. Volume is also key. With such a huge database of information, banks can understand signals and behaviour across multiple touchpoints, enabling them to reveal priceless insights. Content is king in the online world and they can create relevant, up-to-the-minute information and advice. Whether it’s interest rate trends or localised information for potential customers, the data reveals how this content needs to be different in Scotland compared to Northern Ireland.
  2. History: Another huge benefit banks have is that they are starting so much further down the track than these digital natives. Therefore, rather than a “cold connection” to a new lead, banks can effectively determine when customers are in the market for a product or service, and generate relevant remarketing ads to appear in search results. The potential conversion value is massive.
  3. Ability to build from the ground up: Ultimately, banks also have the ability to truly deliver for the local-first experience with the branches available. This is a great opportunity for using digital to drive people to branches.

Rather than getting bogged down by technical jargon, digital tools provide a modern route to the kind of in-depth customer relationship a bank manager used to nurture. Your bank manager would know you intimately and be able to offer you the right and relevant financial products according to your life stage. Digital footprints now provide that same opportunity – but they aren’t being acted upon. By realizing the huge assets they have and building up from the most local iteration, banks can win in the local-first digital era.