The financial services sector may be big and cumbersome, but brands are using an increasing number of data sources, focusing more on customer experience and engaging more customers in real time than ever before.
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26 june 2019
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How financial brands are innovating with data
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Financial services brands weren’t among the first to embrace the brave new world of digital technology. But with the market gradually changing thanks to fintech startups, new regulations and, most importantly, enhanced customer expectations, the sector has caught up quickly in its awareness of customer journeys and the value of data.
According to Salesforce’s latest ‘Trends in Financial Services Marketing’ report, which interviewed over 500 marketers in the industry worldwide, marketers are leading the development of the customer journey in financial brands. With a growing number of touchpoints and an expanding volume of data, 87% of respondents say refining customer journey strategies is a priority.
Bringing data together from disparate sources is key to this effort, Salesforce’s research shows. The number of data sources used by financial services marketers has grown by 80% since 2017.
Finally, a shift towards real-time engagement completes the picture of the challenge faced by the sector today. More than half (56%) of financial services marketers engage customers in real time across one or more marketing channels.
One new entrant to financial services that is bringing a new approach to customer journeys and data use, covering all three of these priorities, is Chetwood Financial. It obtained its UK banking licence in January 2019 but has no plans to launch a current account. Instead, it is going to market with individual product brands, such as LiveLend Reward Loan and SmartSave, each developed for a specific consumer segment.
Each product also has a customer journey designed around an individual user. For example its LiveLend product will primarily be offered to consumers via comparison sites, displaying a live, personalised loan rate to those who meet the approval conditions. Only those eligible will be targeted, using data owned by the comparison site.
SPONSORED BY SALESFORCE
“We took a very conscious decision at the beginning to build our own technology partner and sit that outside but alongside our business.”
Julia McColl, Head of Customer, Chetwood Financial
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SOURCE: SALESFORCE, 'STATE OF MARKETING 2019'
By: Morag Cuddeford-Jones
“Start with the analytical capabilities you might have and then work forwards.”
Danny Hardy, Barclays
Source: SALESFORCE
Read the report
here
It is an unusual route to market, with the real-time personalisation made possible by the fact Chetwood has developed its own technology to integrate with partner sites’ APIs. “We’re very passionate about that distribution model, because it enables a much better customer experience and it’s also a much more efficient model,” says head of customer Julia McColl.
Chetwood has set up from the very beginning with technology and data at the heart of its capabilities. A separate company called Yobota was founded alongside Chetwood to develop its platform. “We took a very conscious decision at the beginning to build our own technology partner and sit that outside but alongside our business,” McColl explains.
While she doesn’t rule out doing big, above-the-line marketing campaigns, Chetwood’s setup means it is not a priority. Instead, she says, “we spend a lot of time listening to customers and getting feedback from customers in the journey”, which could feed into future partnership opportunities, as well as developments in products and user experience.
“We have a lot more access to data than we used to and how we use that – and how we use it for customer benefit – is a really interesting space for me,” she says. “Thinking about how a credit score changing over time should be reflected in a person’s loan rate is one example of that. Our product strategy this year is to find other opportunities like that.”
This data-driven approach is all the more remarkable considering Chetwood doesn’t offer a current account and therefore will effectively not own its customer relationships. That’s something McColl says the company is comfortable with, as “we’re not interested in owning or cross-selling against the customer base”.
You don’t have to be a startup to do innovative things with data and customer experience in financial services. Founded in 1690, Barclays is one of the world’s oldest banks and one of the UK’s ‘big four’, yet has recently increased its focus on creating new products and revenue streams through use of data.
However, as the bank’s head of network analytics, Danny Hardy, told an audience at the Insight Show in March, for big established brands it may be best to “start with the analytical capabilities you might have and then work forwards”, as opposed to “starting with the use cases and what you might want to do”.
2017
2018
2019
10
12
18
Median number of data sources used by financial services marketing organisations
Read the report
here
Read the report
here
Read the report
here
use of ai among financial service marketers
Currently use AI
49%
Plan to use AI within the next two years
+141%
Projected growth rate of AI use over the next two years
35%
Source: SALESFORCE
He argues: “It enables you to really focus on and develop these muscles. We can have a whole team that’s devoted to predictive analytics, and improving that and getting better at it, and then understanding how it can be used more broadly in the business.”
Another key priority is to ensure data projects have valuable outcomes beyond just insights, he says: “Rather than doing analytics for the sake of analytics and maybe having a nice PowerPoint at the end of it, the whole idea is when you’re doing your project, is there an asset you can leave behind that can be repurposed or reused?”
For example, Barclays has used its analytics capabilities to create segmentations based on where customers’ spending behaviour clusters around particular brands. This has created new insights on brand behaviour that Barclays can offer to corporate clients.
Hardy explains: “We looked at our customers’ transactional behaviour and we looked at the brands that they spend on, and then we looked at the interaction between those brands – so if someone spends at brand X they are also likely to spend at brand Y. Then we performed some clustering around those brands and found which travelled together, and are better explained together than apart.”
Barclays also used anonymised card transaction data to find ways to serve its most valuable customers better in branches. The analysis showed affluent customers were more likely to be in the area around a branch later in the day, which led to the bank extending opening hours to allow them to come into the premises.
A third application of analytics was to examine the catchment areas for particular stores using similar transaction data, for the benefit of clients in the retail and restaurant sectors. This has enabled those clients to work out how far consumers are willing to travel to visit a store, so they can see which existing stores have overlapping catchments and where they might be able to access a new market by opening a new store.
This type of innovation around data has not been common for big, established financial services companies. Indeed, for many, the need to protect legacy business models has actively held it back. But as Aviva’s UK retail and brand director Tom Daniell told Marketing Week recently, “if customers believe we are innovating on their behalf, that’s a real driver of trust”.
The brand’s new AvivaPlus subscription product has been designed to reward loyal customers with the best price, rather than giving new customers the best deals and implicitly penalising those already with the brand. It has required a new product development model and was only possible because the company switched towards more agile working, where teams responsible for communications, data, media, proposition, product, customer experience, pricing and risk all sit together.
According to Daniell: “This isn’t about putting a veneer over an existing product. This is grassroots up, absolutely a new product that fundamentally behaves economically for us in a different way but also behaves in a different way for customers.”
It also means there is consistency in the customer journey, from marketing messages through to purchase and call centre service. Customer satisfaction and net promoter scores are already higher than for Aviva’s standard insurance product, following a soft launch.
This is the kind of service consumers now expect – even from monolithic financial services organisations. The whole sector now needs to move just as fast as new digital entrants in order to keep up. ■
Read the report here
Read the report here