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Calling All Data-Driven Markets — Banking Needs You Take Action Now To Build Skills Around Understanding Data B Y RI CK HA L L, S P E C I A L TO B A N K I N G MI D AT L A N T I C
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alk to any banker these days, and the topic of customer acquisition challenges is bound to come up. Growing and differentiating is more difficult than ever — especially with the current rate environment for deposits. Thinking strategically about this conundrum is tedious but crucial. Data-driven marketing is arguably one of the most critical functions banks need to be leveraging when it comes to new customer acquisition. According to the Boston Consulting Group, a majority of new bank customers said that a data-driven personalized approach was a major factor in their decision to move to that bank. In the past, banks could get away with using baseline demographic attributes for targeting prospects and relatively simple product analysis for cross-selling programs to existing customers. These demographics have also been used to measure the efficacy of those programs. But those days have passed, and bankers can no longer ignore the reality of the gig economy. In today’s digital-first world, bank marketers need
to use real-time tools to better understand detailed behaviors to form their acquisition strategies. In recent studies, many digital consumers view banks as simply a place to park money. Therefore, the concept of straightforward segmentation — used for years by bankers — has evolved. It has moved from a lifestyle grouping model that includes age, income, and homeownership to a behavioral grouping model that looks at elements such as online subscriptions, affinity affiliations, charitable interests, and virtual payment appetites. So, is this a “close up shop” moment? Not yet, but it is a serious threat to the future of many institutions. However, if you take a step back to understand what’s happening in financial culture, you would admit most of the future is out of your control. It’s time to figure out how you are going to catch the right part of the wave that banks can still own: data. Big data was a buzzword years ago that got a lot of attention, but it only went away in the headlines. No one has solved the underlying issues. Many have just viewed the problem as too big or complex, and Photo credt: iStockphoto/Shaxiaozi
ISSUE THREE 2020 | BANKING MID ATLANTIC 5
