By Kevin O'Farrell, Associate Vice President for Analytics Partners
Digital technology has been disrupting traditional banking for several years now. The rise of challenger banks – such as Revolut and Monzo – and fintech services are clear examples of how digital is redefining the financial services landscape. By targeting a new generation of consumers on non-traditional marketing channels – such as social media, referrals, influencers, partnerships, communities and more – these firms have redefined the traditional customer acquisition journey in the banking sector.
One area they've been particularly successful in is reducing acquisition process pain points and have shortened the time from people's first interaction with the brand to signing up for an account (screenshot from: https://builtformars.com/banks/opening/).
Traditional banks have, of course, responded to this new competition. They have adapted and modified their media investment to add emerging media channels into their mix. At Analytic Partners, we've seen 70% of our clients in financial services increasing social media investment in the past year – with an average increase of 55%. This is not just about reaching customers now being snapped up by the challengers, it is also because the banks want to measure every touchpoint in the user journey, use the data to optimise their media mix and ultimately, to deliver a great experience to the customer.
The Cookie is crumbling
Tracking the user along every touchpoint is fairly impossible anyway, but there is another challenge facing bank marketers – one that's not limited to the financial services market – and that is the phasing out of third-party cookies. This has been brought about by several factors including privacy concerns, government legislation, consumer sentiment and walled gardens. The upshot is that 2022 will be a defining moment for data-driven marketers and measurement, but it will not be the end of it. As the door closes on measuring with third-party cookies, it opens for advanced analytics.
In terms of financial services, there are specific metrics companies are looking for to answer with analytics. These include: increasing new accounts per operation; customers per total FTE; loans to deposits; mortgages opened; net interest margin and efficiency ratio.
As digitisation grows, marketers may turn to multi-touch attribution (MTA) – but it's important to be aware of its limitations. While the promise is of customer-level insight to deliver a total picture of their activities – improving targeting, customer journey understanding and campaign efficiency – the challenge of data blind spots because of the cookie deprecation remains.
New data infrastructures agreed by companies and consortiums are being worked on to allow consumers to still be served personalised ads but with greater individual control – however, these are years away. There is no simple replacement for cookies, so customer-level measurement will involve either walled garden silos or the painful stitching together of identity data that may not be exactly what a company needs or wants.
Back to the future
The result is that – from a measurement perspective at least – as we move beyond the unregulated phase of online marketing where no one was concerned about privacy, digital media will start to look more like traditional media.
As Apple CEO, Tim Cook, said: "Technology does not need vast troves of personal data stitched together across dozens of websites and apps in order to succeed. Advertising existed and thrived for decades without it, and we're here today because the path of least resistance is rarely the path of wisdom."
For forward-looking financial brands, the loss of third-party cookies isn't the end of something, it's the beginning – the opportunity to embrace more powerful and privacy-focused solutions such as Commercial Mix Analytics (CMA). This type of advanced analytics can help tear down the siloed thinking that other offerings such as MTA have supported over years. By bringing together digital and traditional media – with actionable insights tailored to the specific company's needs – CMA provides one holistic source of the truth for marketing effectiveness for businesses while still being extremely granular, more flexible and adaptive than MTA solutions. For example, with integrated analytics for experimentation, customer or touchpoint analytics, CMA offers optimization by customer segment.
New recipes for a cookie-less world
To win in the wake of the data disruption caused by cookie deprecation, IDFA and growing consumer privacy demand, brands need to face those challenges and come up with new strategies. We've recently established three key takeaways from the past months that financial services brands should consider right now in order to be prepared for 2022 and future-proof their measurement:
- Start assessing the areas in which measurement and spend will be compromised or challenged with data deprecation. Brands should be especially wary of measurement inside walled gardens (e.g. siloed view, limited lookback windows)
- Build and grow your own first party data. This practice is privacy-compliant and provides a clear benefit and value exchange to a brand's customers and helps build trust.
- Experiment and validate marketing activities. The pandemic has forced many brands to rethink their ways and this process can open up new ways of connecting with existing customers and help generate new leads and prospects. This is a moment of opportunity for brands – in banking and beyond – to adapt and instigate new and effective measurement programmes that better serve all their marketing requirements and ultimately drive the full business forward.