Data-fuelled marketing has been a go-to in finance for years before it was accepted as default by brands across the spectrum. However, finance – once the pioneer in this field – is no longer the de facto leader in personalized marketing.
Businesses were already investing in personalization strategies – and Covid-19 has of course necessitated accelerated investment into digital transformation across the board. This means that competition is fiercer than ever before – and those that fall behind on personalization will get left behind by the consumer, who can go to a variety of businesses that will immediately recognize and cater to her needs.
If financial institutions are to engage with the customer on an individual level, their data-driven communications strategy must draw on a variety of data sources that are superior to gut-feel and assumptions. These more intuitive approaches often yield irrelevant and even sometimes jarring messaging.
First-party data can tell a bank that a person is saving at a greater rate than before – but it can’t tell them what for. It might be for a holiday (for those of us feeling optimistic about the vaccine news), for a car, even a house deposit – or it could reflect a person very worried about their financial future who is cutting back to create a cushion. How we communicate with a person should reflect these sensitive issues – and failure to do so is to give another finance brand a competitive advantage. This requires the input of other data sources on an individual to help paint a picture of what they want or need – but identifying privacy-centric ways to do so.
As we go into 2021, it’s clear that finance brands need to diversify data resources past relying on just first-party data, but also need to adhere to ever tighter regulations in terms of best practice around third party data privacy. These are the two goals that cannot be separated: in the mind of the marketer, they must be one and the same.
We have set out the three key pillars of a future-fit, data-driven marketing strategy for financial institutions.
- Diversify your data sources
So we need to account for the customer beyond their transactional data: how do we go about this? Looking at discretionary activity data encompassing both intent and spend is a key tool which can give true insight into an individual – and allows us to understand more than just behavior. At ADARA, we look at discretionary spend to build a picture of ‘consumer vitality’: ability to spend and financial confidence, alongside their health safety confidence and willingness to venture out.
We take anonymized, ethically sourced data from a variety of data partners across travel, real estate, dining and more to connect disparate data sources, layer them on top of first party data and build a full understanding of individuals – including their ‘consumer vitality’. Financial brands can use this information to see how people’s habits have changed since the pandemic and how likely they are to react to certain offers and promotions.
2. Privacy-first mindset
Not only are regulators demanding increased privacy in data collection, storage and usage, but it is paramount to the future of your brand that it is put first, today. Consumer backlash over lack of respect for data will only grow, as will legal ramifications for failing to adhere to regulations.
This means questioning data partners over how they standardize privacy across their clients, what steps are taken to ensure compliance and eliminating the use of ‘third party cookies’ before they become completely defunct, so as to ensure you are ahead of the competition.
3. Intelligent actioning
Once you have the core methodology in place, with a privacy centric method of understanding and reaching ‘real’ individuals, it all comes down to effectively using those insights to deliver relevant comms.
Financial institutions must take an omni-channel approach to bring tailored marketing promotions to relevant customers: ensuring that across all devices, the consumer is seeing what works for them. For example, if we know someone really is saving for a holiday – credit card businesses might reach out with an air miles reward card. Customers about to buy a home (perhaps taking advantage of the break in stamp duty until March) may well respond to mortgage offers. Those more cautious may be a prime recipient of a promotion for a long-term saver account.
A data-driven strategy is a must, and if finance marketers act now – they can be a step ahead of the competition once more.
Chief Marketing Officer