Fintech companies continue to put pressure on traditional banks by taking advantage of lower operating costs to provide competitive rates while meeting consumer demand for digital services. Their strategy? Offer speed, convenience, anytime access and competitive prices — things consumers crave not just in banking, but in all aspects of daily life.
Here’s the challenge: Fintech adoption among consumers has nearly doubled in the past 18 months, and the rate of fintech adoption in the U.S. grew to 46% in 2019.1 According to a study from the Global Fintech Adoption Index, the top two reasons consumers prefer to use a fintech versus a traditional bank are attractive rates and ease of setting up an account.
Here’s the good news: Research shows that consumers and small businesses still prefer to do business with a traditional bank or credit union. But you can’t take that advantage for granted. The moment those customers can’t access the products and services they want from you, when they want them, they’ll move on. The strategies and tactics below can help you stay competitive.
Five Financial Marketing Strategies to Successfully Compete with Fintech
To win the battle for loyal customers — and higher profits — it’s crucial for traditional banks to prioritize their focus on innovative technologies and exceptional customer experiences. Arm your team with the financial marketing strategies and best practices below to stay on the winning side of the fintech battle.
1. Don’t ignore digital trends.
It’s a fact. Not only do today’s consumers expect digital technology and experiences in the majority of their interactions, many expect tailored offerings based on their preferences, à la Netflix and Amazon. Fintech companies leverage this consumer behavior to stay competitive by incorporating cutting–edge technology and agile processes that many traditional banks don’t have.
To compete in the digital landscape, look to adopt similar strategies and consider investing in new technologies where necessary to meet customer expectations. For instance, today’s bank customers want to be able to check their balances in the middle of the night and view and manage their spending and saving with a simple click.
Stay on top of current digital trends, evaluate emerging technologies and look for ways to integrate digital activities into traditional operations. For example, use geo-location technology to provide customers with easy access to a list of nearby fee-free ATMs.
2. Foster a culture of innovation throughout your organization.
To beat fintech competition at their own game, you’ll need to embrace an agile mindset by challenging inefficient processes and looking for ways to integrate new technologies into legacy systems. From selling products and services to onboarding to customer service, focus on simplification and digitalization. Collaborate as a team to make the entire customer experience more relevant and user-friendly. Are there new skills that should be brought in-house or does it make sense to use vendors?
Think like a customer. Take time to understand the digital consumer and their pain points, such as filling out paper forms, long loan approval periods and the need for multi-channel access.
3. Leverage brand recognition.
Traditional banks have three big advantages over the fintech competition: brand visibility, a built-in customer base and access to proprietary customer information — things newer fintech companies don’t have. Banks are also at an advantage in terms of size and ability to roll out new products and services at scale. Use these strengths by leveraging the brand recognition and trust you’ve built with customers.
Customers may do most of their day-to-day banking on their phones, but they like the assurance of a physical branch nearby. For bigger finance products like mortgages and pensions, consumers still want to interact with a real person.
Continue to build on the trust you’ve already earned. Many consumers are still wary of fintech companies because they are online only and haven’t been around as long as your brand has. Communicate regularly and consistently to customers that your products and services are easy to use, competitively priced and make their lives more convenient.
4. Nurture existing customer relationships.
Remember that it’s easier and less expensive to retain current customers than it is to acquire new ones. To maintain loyalty in today’s customer-centric society, it’s more important than ever to make customer service a priority — consistently — across products, channels and platforms.
Make it a company-wide initiative to provide the best customer service and look for ways to resolve issues faster and more efficiently.
5. Consider an acquisition or partnership.
In addition to digital banks, we’re seeing an increase in non-financial institutions rolling out services offered by traditional banks — like checking accounts — and new services like mobile phone payments and peer-to-peer lending. You’ll need to decide whether to create your own system, compete or collaborate. Your choice may ultimately depend on the level of integration that best aligns with your business goals.
To meet customer demand for more innovative digital services (including convenient payment options), keep your focus on areas where integrating new digital capabilities will give your organization a competitive edge.
Five Financial Marketing Tactics To Stay Competitive
You already know that leveraging data analytics and digital technologies can provide a better user experience, leading to increased engagement, retention and sales. But are you using these tools to nurture and grow your customer relationships? These five financial marketing tactics and industry best practices can help you maximize those technologies — a critical step in battling fintech competition.
1. Start with your website.
How long has it been since you examined your bank’s website with fresh eyes? If it’s due for a revamp, be sure to include digital marketing best practices like SEO, strong calls to action and a series of informational articles and lead gen landing pages for your most popular topics.
Keep your website clean and user-friendly for all types of digital devices. Be sure any redesign is consistent with the look and feel of your other channels, including your bank’s mobile app.
2. Use data to nurture your most profitable customers.
Take advantage of your financial institution’s treasure trove of data to foster your most profitable customer relationships by targeting certain behaviors or life stages with actionable opportunities. For example, use data on customer interactions to make recommendations in real-time for additional products and services.
Know your customers and their needs, understand their preferences and provide access and support everywhere they are. Know your target segments and create promotions that appeal to them directly.
3. Create more relevant content.
One of the benefits of customer data (that many fintech startups don’t have yet) is the ability to segment customers based on criteria that’s most important to the individual’s needs and interests. You can use this information to create more relevant content that’s both educational and actionable for different audiences within your customer base.
Use your data to provide the right content to the right audience at the right time and customers will see you as a trusted resource for valuable information that helps them make better decisions.
4. Promote your digital products and services.
Make sure customers are aware of your digital offerings. Whenever you roll out a new product, service or technology, be sure to share information with customers about how it works and how it makes their lives better. Focus on areas where fintech competition typically wins, such as convenience, speed or ease of use. For instance, one of the most common uses for fintech is money transfers and payments. Do you offer (or plan to offer) a similar service? Be sure to let your customers know all about it.
Promote your digital products and services across multiple channels and platforms, highlighting the ways they can make customers’ lives simpler and more secure. Make it easy for customers to find the information they need with as few clicks or swipes as possible. Keep products and services simple and easy to understand.
5. Deliver an exceptional customer experience.
It’s no secret that customers who are engaged with a brand bring in more revenue than those who aren’t, and fintech has helped raise the bar on customer expectations. One way to encourage engagement is to meet your customers where they are. Enhance your existing channels (or add new ones) to make the best use of mobile and social interactions.
Don’t underestimate the importance of the personal touch in your financial marketing strategies. This could include a series of personalized welcome emails or a preference center that allows customers to choose which communications they want and through what channels.
Boost customer engagement and provide a more personalized experience by paying attention to communication and channel preferences — even segmenting campaigns based on criteria that’s most important to customers.
Fintech Competition Brings New Opportunities for Customer Loyalty
The ability of fintech companies to quickly leverage new technologies and delivery channels will continue to be a challenge for traditional banks. To win and keep loyal customers, the success of traditional banks will be based on their ability to adapt to changing expectations, new technologies and infrastructure, and delivering a best-in-class customer experience.
Staying one step ahead of the competition calls for strategic insights and industry best practices. CCG can help. Our financial services marketing approach is centered around the customer experience and includes analytics and customer surveys, digital content and design, coding and deployment, and more.