Marketers, managers, and digitally-savvy customers have all experienced first-hand the effects of Financial Services digital transformation over the last year.
Of course, challenges relating to digital transformation are not unique to the financial sector. As in many industries, COVID-19 was another resounding wake-up call for the financial industry in terms of digitalization.
In this blog, I will be making my Financial Services digital transformation recommendations, based on trends and innovation in the sector at present.
Even before the pandemic, Financial Services customers were already seeing rapid growth in digital services available online. The digital disruption caused by the events of 2020 only accelerated that.
Now, many industry studies are suggesting Financial Services digital transformation will have a lasting effect. So, it's up to Financial Services marketing leaders to ensure their business is reaching, interacting with, converting and engaging customers across all digital touchpoints in the customer lifecycle. This is demonstrated via our popular RACE Framework below.
Modern marketing requires harnessing the full capabilities of omnichannel marketing to provide the best experience for the customer and thereby drive growth. Delivering on this promise requires an informed, data-driven, customer-centric marketing strategy.
We've got marketing solutions to support Financial Services marketers to attract and retain more customers in a competitive environment. Download our free Financial Services marketing trends 2021 and get started today.
Matching enterprise maturity to customer maturity
Financial Services digital transformation means marketing departments need to be transformed for speed, collaboration, and customer focus. It’s less about changing what marketing does and more about transforming how the work is done. This approach is a common theme we have identified in our recent financial services research.
More than ever, before consumers conduct online research in relation to their money and other financial requirements before making a decision which more frequently is taken online. For companies in the finance sector, this means that the consumer is more aware than ever of the role brands play in their day-to-day lives.
Financial services brands must therefore become more focused on building a relationship with the consumer throughout their research and decision-making cycle, in the space where they are spending the most time - online.
Blackdot, who specializes in integrated solutions, conceptualizes this as an overlay of customer maturity and enterprise maturity where the activities of marketing and sales become increasingly integrated.
They go further to show how financial service organizations generally lag in digital maturity to this reveals itself compared to other major industry sectors.
Successful financial services digital transformation also encompasses the company's business vision. Digital transformation includes developing the culture and mindset, updating the organizational structure, governance to meet the objectives, attracting and developing talent, and maintaining a growth perspective.
To make this change a reality often companies focus on a handful of initiatives or capabilities and then grow frustrated when the promised value doesn’t appear. McKinsey & Company articulated what they believe to be the core capabilities and enablers.
You will notice that technology is present as a part of the solution that still requires people to enact the processes and drive success.
Digital Transformation benchmarks in the Banking industry
The process of transformation can be given a significant boost in the right direction by comparing your current abilities against competitors in the same field. In the banking industry, The Temenos Value Benchmark, a strategic survey-based program can help you focus on how your business performance and value creation are enabled by your investment in IT, when aligned to business and IT metrics along with eight domains of the banking value chain. Temnos is a banking software company that employs cloud-native, cloud-agnostic next-generation core banking products.
The benchmark activity starts with a simple idea: Fundamentally, any financial institution’s ability to move forward is a combination of its culture of decision making (organizational mindset) and its capacity for change. To this is added multiple factors that impact the ability to grow, and it is important to acknowledge the full range of organizational, technical, and cultural challenges that can be barriers to success. Once you have created your own plot you can explore actions for transformation that have been undertaken by other members of the report group.
Financial Services digital transformation in 2021
Marketing transformation capability assessment
Using the Smart Insights Capability Grader to rapidly benchmark your overall or channel-specific marketing activities to score your current approach and get recommendations of where to focus in the future.
If you're still assessing what digital transformation means for your financial services business, I recommend utilizing our Capability Grader to benchmark your overall or channel-specific marketing activities. Download our free Financial Services marketing trends 2021, which is packed with real-life case studies and innovations to help inform your next steps.
Using analytics to support digital transformation
The use of analytics to uncover key ‘Audience Insights’ that can transform the way a finance company communicates and engages with their customers is a critical skill. They can be used to understand buyer personas and demographics and with the increasing use of Artificial Intelligence Insights, you may be able to identify certain topics, conversations, and areas that your user is more interested in and help drive your marketing campaigns in the right direction.
Getting the data is one part of the puzzle. Being able to effectively analyze and draw insights is crucial to effective implementation.
Research from Gartner found that aside from the trouble of connecting analytics efforts with ROI, marketers cite poor data quality, unactionable results, and the lack of clear recommendations as top reasons for not relying on marketing analytics to make decisions.
Another reason is that data findings conflict with their intended course of action.
“Confirmation bias plays a large role here,” says Foo Kune. “Marketing leaders often seek out data to help them make a case for a desired course of action or to show the value of their program.”
However, marketers must understand that having data that conflicts with a planned course of action is valuable and presents a unique opportunity to challenge controversial findings through experimentation.
Overall, real-time audience insights can help lower and even prevent you from wasting valuable advertising and marketing resources for financial companies all while allowing them to engage and interact with your customers in an efficient, proactive, and accurate way.
Risk mitigation during Financial Services digital transformation processes
Companies in all industries are launching digital and analytics transformations to digitize services and processes, increase efficiency via agile and automation, improve customer engagement, and capitalize on new analytical tools. Yet most of these transformations are undertaken without any formal way to capture and manage the associated risks.
Many projects have minimal controls designed into the new processes, underdeveloped change plans (or none at all), and often scant design input from security, privacy, and risk and legal teams.
As a result, companies are creating hidden nonfinancial risks in cybersecurity, technical debt, advanced analytics, and operational resilience, among other areas.
You can mitigate risk for your business by keeping up to date with the latest sector developments in all things digital. Our Financial Services marketing trends 2021 report gives critical insight into the latest sector development for marketing leaders. Download your free copy today to find out more about our top trends and recommendations.
Digital and analytics transformations use machine intelligence, automation, and agile approaches to improve products and operations
The COVID-19 pandemic and the measures employed to control it have only exacerbated the problem, forcing organizations to innovate on the fly to meet work-from-home and other digital requirements.
In the model below, Mckinsey outlines 3 approaches to digital and analytics transformations - spanning transforming the core business, transforming enterprise technology and analytics systems, and building a new business.
Opportunities, Strategies, and Actions for Financial Services marketing leaders
Smart Insights members are utilizing our expert marketing research and actionable marketing tools and templates to plan, manage and optimize their marketing plans.
Define Opportunity (Situation and Objective setting)
- Quantify and agree on targets, KPIs, and dashboards for reviewing performance.
- Review current business digital capability and performance against the target using analytics.
- Benchmark capability and performance against competitors.
- Set SMART objectives based on conversion-based models to show incremental improvements.
Set Strategy (Strategy and Tactics)
Review strategic options.
- Select and prioritize strategies.
- Set the budget for investment.
- Define governance for activities.
Take Action (Actions and Control)
- Define implementation roadmap or timeline.
- Select and schedule the best resources for information.
- Implement digital tactics.
- Review performance using analytics and optimize.
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From identifying opportunities, to setting strategy and taking action, we've got strategic marketing tools and templates to guide you through the steps you need to take to win more financial services customers and accelerate your ROI from digital marketing.
Download our free Financial Services marketing trends 2021 and get started today.