The role of data and digitisation in banking’s future

By Ben Allison, VP and Head of Media at VaynerMedia London.

Recurring lockdowns, government restrictions and pandemic-induced changing consumer behaviour have fundamentally affected financial services. The banking industry was already undergoing an identity crisis as new fintech challengers entered the field, creating consumer demand for increased digitisation, easier onboarding and omnichannel, consumer-focused experiences. Covid-19 has forced high street banks to confront this digital transformation head-on.

Mobile banking is becoming increasingly commonplace – 34% of Brits use a mobile banking app at least once a week – and competition is coming from multiple directions as seen with the announcement that JP Morgan  is entering the UK market with a digital-first consumer bank, under its existing Chase brand. While there are many potential positives that come with digitisation, including embedded or open banking, increased speed of innovation, or more seamless onboarding, the most important thing remains that the consumer is at the centre of it all.

All the banks’ innovation must start with the customer and for traditional banks that means they must evolve their understanding and use of data from purely transactional and logistical to powering how, when and where they communicate with their customers. If we look elsewhere at a fast-growing brand like Gymshark, recently valued at $1.3bn, it has built its entire offering based on this, with the backend data infrastructure able to learn and develop based on those consumer needs. This allows the brand to create seamless omnichannel experiences, mirroring consumers and how they interact with the world around them.

Legacy banks have the distinct advantage of trust and breadth of products, but they must continue to evolve their offering in line with customer expectations and the persistent market competition. To gain that critical edge in the market, financial brands need to dramatically change how they behave, moving from a service provider that mitigates risk, to a partner that engages and maximises new channels and embraces how, where and why customers look to engage with their financial partners.

Banks that fall behind on the digital battleground will be unable to expand and grow their customer relationships from that of a service provider that lends money or allows transactions, to a trusted partner that helps support consumers and businesses across their spectrum of needs, both offline and online.

This is not only an internal process of innovation for banks. It requires a step-change in how they work with partners – specifically in how they think about their internal and external marketing and sales processes and relationships. Historically, agencies have retained a large amount of information and data on the media they are buying, the underlying costs or rebates associated with those agreements, and the direct ownership of the customer and performance data.

If banks are to fully digitise, they will need to rethink how they work with marketing and media agencies to ensure that there is a transparent and frictionless flow of information between their internal and external teams – and that they have complete control and ownership over their customer data. This will require embedded resources and integrated team structures across disciplines, both internal and external, as banks continue to build in-house expertise while relying on external experts to help support those growing functions.

Complete data ownership – including how different messaging has performed, who it was served to, and the resulting impact of that message – becomes the foundation for how banks will digitise and how they will use that to become more effective and efficient partners. Again, looking outside the sector, brands like Disney, with the launch of Disney+, have been built on an infrastructure of complete data ownership, both in terms of on-platform behaviour and in user acquisition and performance data. Merging these data sets allows them to effectively personalise marketing messaging and better predict lifetime value through a deeper understanding of what mechanisms positively contribute to user retention.

This data, and the insights that it will fuel, will be what powers banks’ relevance to consumers and businesses, propelling how they can communicate with consumers in personalised ways, based on their specific needs. This data feedback loop will unlock insights that drive effective creative messaging across media channels and placements. While many brands have already begun the necessary process of reintegrating creative and media within their marketing, there is a limit to how contextualised and personalised their marketing can be without proper data ownership and feedback.

Historically this data has helped create effective advertising campaigns through channels like Search or Display, driving efficient customer acquisition in isolated channels. But now these offer the opportunity for holistic communication across living room inventory sources – through OTT/CTV, mobile devices – and the ever-expanding Digital Out of Home inventory with real-time capabilities.

Banks are being forced to look at the opportunity, and threat, that increased consumer demand for digital offerings now presents. For them to properly service their customers digitisation is essential. It means placing their customers at the heart of how they think and how they store and use data, which will not only allow for better offerings and reduced friction but also ensure they effectively communicate and market to existing and net-new customers.