The Digital Banking Wars Will Not Be Won With Technology

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After 20+ years of selling Digital Banking tech, I’ve reached the conclusion that no vendor will give your bank or credit union a decisive edge.  But your connection to your community will.

Last week, I had a long conversation with two analysts at a leading tech research firm.  They kept wanting to steer the conversation to which vendor had killer functionality today.  I told them that it didn’t matter, because all the other vendors would have the same thing in a quarter or three.  The shiny object is really important in the sales cycle, but there is no sustainable advantage to be had.

Your real advantage comes from touching your customers frequently in the Digital channel.  At Malauzai, we learned that the typical consumer uses their mobile banking app 3-5 times per week and their desktop app another 3-5 times per month.  Each of those is a chance to connect with that consumer.  Tom Litwinowicz, CRO of DeepTarget said it best: “We have to start thinking of these impressions as currency”.  

Almost all Digital vendors have some marketing capability, usually the ability to show a banner or other ad at specific locations.  That’s the vehicle.  The real question what are you going to say to them?

I’ve seen two tactics that work: 1) presenting a relevant offer, and 2) delivering meaningful community information.

Presenting a relevant offer requires marketing data analysis to make sure the right customer sees the right offer.  The offer has to be focused on the needs of the customer.   For example, offering a college loan to a retiree sends the message that you haven’t really taken the needs of the consumer into consideration.  Several Digital Banking vendors have an offering in this area, but companies like DeepTarget and Terafina are leading the way.  And don’t think this has to be an expensive or long-term analytic effort.  It doesn’t.

The second option, delivering meaningful community information, may be even more important in nurturing a long-term relationship with your customer or account holder.   DeepTarget proved this point by assisting their FIs in rolling out Covid-19 information to their customers and members.  At the time, I thought it was a nice gesture, but couldn’t imagine that consumers hadn’t already been saturated with information on that topic.  I was flat wrong.  Best in class institutions were getting a 10% click through rate on the public service ads. (A good clickthrough rate on a Google ad is 0.5%).  Important information from trusted FIs was valued by consumers.

That tells me consumers would value other, community oriented information.  Your FI probably supports a charity—why not give them some visibility on your apps?  You undoubtedly bank businesses in your community that would love to offer a discount to your customer.  Why aren’t we doing this today?

You might be thinking “what’s  the ROI on promoting community events?”.  How much effort did you put into customer retention last quarter?  How often do we brag about being community or member oriented?

Each customer interaction in Digital channels is a chance to promote our products and connect with our communities.  We need to spend Tom’s “currency” much more thoughtfully.

Disclosures and Thanks:

DeepTarget is a consulting customer

Several friends have helped develop my thinking in this arena:

Jill Homan and Tom Litwinowicz of DeepTarget
Amber Buker of Bank Director

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