Banking’s Next Experiment: Innovation in a Digital, Post-Covid World
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To respond to the shift to digital, financial institutions must engage with consumers in impactful ways with the most innovative products and services.
Shift to Digital
1. Mastercard Global State of Pay report, 2020/21 2. Mastercard Evolution of Banking study, November 2020
53%
87%
64%
62%
of the world’s population is using banking apps now more than they were before the pandemic
of people who did not use banking apps before Covid now plan to continue using them after the pandemic
of people say they will use paper bills and coins less after Covid
of people expressed an interest in switching from physical banking to digital platforms in 2020 – a 13-point rise from 3 years ago
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Being able to test ideas while in market and get fast results is key to success. With Mastercard Test & Learn®, a cloud-based experimentation platform, banks can make smarter decisions for better outcomes.
Power of Test & Learn®
Speed & Scalability
Analytic Precision
Increased ROI
faster
6X
Clients report that the test analysis with Test & Learn® is 6x faster than previous methods
Of campaigns have natural test vs. control bias before the Test & Learn® correction
Of Test & Learn® engagements generate at least 5x ROI
45%
92%
3. Internal Mastercard analysis 4. Frost & Sullivan analysis. *60+ sample Test & Learn® engagements, 230+ initiatives analyzed, 9 industries represented
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Adjusting Operating Hours Across Branches
Here’s how Test & Learn® helped across three case studies
Optimizing Digital Outreach to Consumers
Expanding the Customer Relationship
Next Best Actions
A Bank in Thailand had 1000+ empty branches because of Covid. They wanted to find out how adjusting branch hours would impact sales and transactions. They also wanted to find a scalable strategy for adjusting branch hours across its branch network.
Challenge
Test
Results
Learn more about using business experimentation as digital disruption takes over banking.
TEST
RESULTS
Read the full report.
20 branches: close them two hours early 20 branches: keep them open two hours later
• Adjusting by one hour made the most sense: • Opening earlier in the morning led to a 5% increase in sales and closing earlier in the evening had no impact • Certain branches, such as those in less competitive areas, were less sensitive to scaling back hours
Adjust branch hours in a targeted approach across the network.
A large US-based financial institution wanted to increase loan applications and was investing about $150,000 a month on branded paid search. The organization wanted to learn how branded paid search was impacting loan applications considering changing consumer behaviors due to the pandemic.
Two sets of people with similar attributes in different postal codes • how does one group react to branded search ads? • how does the other react to no branded search ads?
TesT
• Removing branded paid search resulted in a 2.1% decline in loan applications and no impact on booked or approved loans. • Volume of loans driven by branded search was insignificant. • Branded paid search performed lower than expected and the bank’s website was more effective for driving loan applications.
The organization moved its marketing dollars to more effective channels.
Branded Search ROI: How do banks break through the digital noise?
A bank in Taiwan had many customers who only had one or two products with the bank, such as a checking account or a credit card. They wanted to find ways to incentivize their customers to expand their business with the bank to its other products and services. The bank tested whether its 2 million credit card customers would add wealth management to their relationship with the bank.
The analysis included identifying which customers were the most likely to expand the relationship. They analyzed two of their customer segments: • Single-product customers • Multiple-product customers
Through propensity modeling, the bank narrowed down those customers who would most likely be interested in other products within the bank.
The bank identified several customer segments to focus their outreach for expanding the relationship. The bank then developed a rebate offer for customers who signed on for wealth management services as an incentive.
Innovation now plays a bigger role in today's hyper-competitive environment. The idea of continuously testing new ideas and weeding out failures is more important than ever for financial institutions.
“Banking’s Next Experiment: Innovation in a Digital, Post-Covid World” to learn more about how financial institutions are leveraging Test & Learn® to unlock new ways to reach and engage today’s consumers.
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