By Sue Todd, CEO, Magnetic

These are highly competitive times for traditional banks. The emergence of fintech challengers has disrupted the status-quo, with research suggesting one in five UK consumers consider their primary bank account to be with a challenger bank.

The traditional banks need to use every tool in their arsenal to combat disruption. A significant part of this, of course, will be reimagining services to meet the demands and expectations of modern consumers through digital solutions. But as RBS illustrated with it’s scrapped plans to launch Bó, a digital only bank brand, this is not always so straightforward.

If one side of the battle is digital transformation, the other side of the conflict is fought in marketing. And while the high street incumbents may be playing catch up on digital, when it comes to marketing they are operating from a position of strength.

Fintechs are only just starting to enter the marketing mainstream – leaping from word of mouth and community marketing to big brand advertising, including TV spots. However, there were marketing misfires in 2019, with Revolut sparking controversy with its “single-shaming” advert which drew protests from the City watchdog over the issue.

Traditional banks are powerful brands, and when they combine the right message with the right channel, this power comes to light.

Trust

A major advantage high street banks have over newer fintechs is trust; an incredibly crucial element when it comes to winning consumers and their finances.

For many high street banks, this consumer trust has been won over decades of work. And we’ve seen the challengers fall at this hurdle, exposed for lacking the legacy fraud work traditional banks have worked at to earn this trust. In August last year, Monzo asked half a million customers to change their PINs after they were left in a vulnerable file accessible by the company’s engineers for more than six months. Most recently in May this year, Revolut informed its customers that users; data may have been affected following a data breach at Easyjet.

Maintaining this trust is essential, and media brands offer banks the opportunity to elevate perceptions of trustworthiness through partnerships and the placement of advertising in relevant contextual environments. In other words, this trusted perception can be supercharged when combined with a highly trusted media channel, like magazines.

Research from Magnetic has revealed that magazine brands are more trusted than social media brands, and that this even holds true amongst under 35 digital natives. 70% of magazine readers trust the content, while only 30% of social media users trust social media.

These figures are underlined by the recent findings from YouGov online which found that more than one-third (34%) of British consumers distrust digital communications from banks to the extent that they ignore actions the messages suggest they take.

The medium is as important as the message. For banks, marketing strategy should capitalise on this trust and deploy marketing channels that both nurtures this and builds upon it to future-proof loyalty.

Long-term thinking

While the challenges faced are immediate, the focus needs to always be on the long term. Especially in marketing activity.

High street banks need to focus on brand building, particularly through turbulent times. The chase for short term results can lead to long term stagnation for brands. Findings from a report by Enders Analysis support this and conclude that there should be a 50:50 split between direct response and long-term brand building in advertising and marketing activity.

Connection & authenticity

Attention is everything in marketing. To ensure that messages are landing, high street banks need to understand the importance of reaching an audience that is attentive in a competitive market.

A hugely effective way to do this is to reach people via their passions. While many brands are over-engaging and hyper-targeting specific individuals with offers in cluttered environments, there is an opportunity to target people as members of social groups through their passions and interests. Through channels such as magazines, marketers are able to reach customers as members of identity groups, rather than just as a target demographic or a series of data points. This empowers high street banks to simplify complex products in receptive environments.

Profit ROI of magazines

Getting the right balance of media channels will help the high-street banks stave off competition from the challengers. But on top of this, it will also help marketing teams generate much stronger ROI. In our ‘Attention Pays: optimising for profit’ study, there is a strong case for pursuing the marginal gains that can be achieved by rebalancing the media mix.

Finance brands don’t typically invest in magazine media, only 22% do and on average they invest at low levels. Finance brands are more likely to invest in TV, digital and outdoor.

However, ‘Attention Pays’ found magazines to be a top three performer when it comes to channel profit ROI, alongside digital and newspapers. This means that financial brands who don’t currently invest in magazines could see a 32% improvement in campaign profit ROI if they simply started to spend in that channel. Invest at optimum levels of 6% of your budget and you can tap into campaign profit ROI improvements of 68%.

This is a time of intense pressure for traditional banks – but equally there is a clear opportunity to reinvent and modernise. While digital is changing how we engage with our banks, established media like magazines have a pivotal role to play in winning the marketing war.