How to Repair Critical Gaps Between Financial Institutions & Consumers

By Stephenie Williams, Vice President, Vericast

There is a dichotomy in current consumer attitudes toward finances: on one hand, consumers are emboldened by more choices, increased wages and some relief from the pandemic, but on the other hand, they are challenged by market volatility, rising inflation and clogged supply chains. Market volatility, in particular, has had a significant impact on consumer retirement accounts, and only 18% of U.S. adults with retirement or investment accounts say they will invest more in 2022 than they did in 2021.

For modern financial institutions to be successful, they must first seek to understand these underlying forces and empathize with what consumers are experiencing. Only then can they deliver what consumers want and need in this moment.

Amid the instability of the last two years, a chasm has formed between consumers and the financial institutions they partner with. According to Vericast’s recent Financial Services TrendWatch survey, the gap was formed due to changes in privacy practices, consumer expectations for personalization, social changes and marketing innovation. To achieve business goals and ensure long-term survival, financial institutions must seek to repair this void and successfully engage with consumers.

Five financial services marketing trends for 2022

To attract and retain loyal customers, financial institutions need to meet today’s consumers where they are, not where they think they should be. The first step toward building stronger relationships with consumers is gaining insight into their mindset and perspective.

Here are five of the top financial and marketing trends for 2022, and understanding these may might help close the gap between institutions and consumers:

• Change events threaten long-standing loyalty: According to survey results, a majority of consumers (75%) say they are very or somewhat likely to leave their financial institution after a merger or acquisition. Delivering consistent, high quality customer service is even more important during these change events when loyalty might be challenged.
• Streaming entertainment delivers new account acquisition tools: Financial institutions must stay up to date on the latest marketing channels and strategies for increasing account growth. Traditional channels like social media, email and direct mail ranked high for marketing usage, while the channel least used – connected TV (CTV) – is the most promising. Industry research shows that 80% of U.S. households have at least one CTV device. In 2022, financial marketers must form a strategy to take advantage of engagement opportunities through CTV.
• Expectations of privacy affect marketing strategies & personalization: Fewer than one third of financial institutions are prepared for a cookie-less targeting strategy. As search engines increasingly eliminate third-party cookies (Google Chrome will become the final browser to do so next year), it is imperative that financial institutions have a plan in place to reach consumers under new privacy regulations and preferences.

While consumers are demanding enhanced privacy, they still want a high level of personalization from the financial institutions they engage with. Consumers receive many offers from many different providers, so financial institutions must employ the data they have to personalize recommendations.

• Demand for corporate responsibility challenges marketing goals: Consumers ranked community/ civic involvement and social responsibility high on their list of priorities and are more likely to partner with firms who match these values. Conversely, financial service marketers ranked local brand awareness and social and environmental responsibility as low on their list of priorities. This disconnect is likely to create even wider gaps between financial institutions and consumers unless financial marketers start appealing to these values.
• Loans will be the market-making competitive battleground: One area that consumers say they are open to working with different financial institutions is to secure home and auto loans. Beyond this, most consumers (86%) are not inclined to make a switch in their financial institution. However, 72% of financial institutions identified account acquisition as a primary driver of revenue this year, highlighting a major divide between institutions and the audience they are trying to target.

Keep up with shifting values

While consumers want great customer service, it doesn’t stop there – they also want their banks and credit unions to be a community partner. These evolving values is why continued research is key to understanding shifting market conditions and the rise of new trends and patterns.

Understanding the origin and reasoning behind the disconnect with consumers will enable financial marketers to get the right message to the right audience at the right time, resulting in enhanced performance in 2022 and beyond.