Powering Digital Democratisation of Finance through Communication
Shifting customer expectations are forcing banks to look for new sources of competitive differentiation and efficiency. Along with digital democratisation and disruptive new services, globally brands are now embracing communication and content to connect with their new-age consumers in a new way. The question is how can financial institutions breakthrough all the chaos to connect with these inhabitants of digital democracies?
After analysing data, researching and talking to real people, we have listed five areas of insights for reputation managers of financial institutions.
1. Digital-first brand communications:
About 88% of our survey respondents agree that performance on digital platforms has become an essential element in brand building. So, a ‘digital-only brand’ approach is crucial to engage customers, given that more digitally savvy millennial customer-base will expect it. In addition to DenizBank, for instance, AirBank launched itself in the Czech Republic as the “first bank you will like” and promised that all customer communications would be jargon-free and all fees clearly outlined in one simple document. This might require financial institutions to evolve at a fundamental level; and embrace the need for digitally drive, quick and simplified communications.
2. Communicating to capture Micro-moments:
The consumer journey can be mapped into hundreds of real-time, intent driven micro-moments - each a critical opportunity to shape their decisions and preferences. Google Think categorizes these scenarios as “I want” or "I need" moments such as: I want to buy…, I need to learn…, I want to know…, I need to go… and so on. In these fleeting moments which are often on smartphones, customers are trying to circumvent traditional methods of enquiries (log onto complex websites, talk with service people or visit a branch office), and want to know something RIGHT NOW. 62% of smartphone users are likely to act right away toward solving an unexpected problem through smartphone18. This means that financial institutions can engage their customers at the moments when they make pivotal financial decisions by leveraging contextual signals like location, time of day, keywords etc. Data driven digital approaches are becoming more efficient as data mining & analyses methods evolve, implicating the need to start sooner than late.
3. C-Suite Conversations:
A whopping 80% of consumers globally say they are more likely to trust a company with a CEO who is active on social media. About 78% of employees would rather work for an organization helmed by a CEO who leverages social media19. In financial institutions where people trust brands with their money, they expect to have a humanised connect with the organisation. One CEO from this sector does a particularly good job of humanising his organization: TD Ameritrade CEO Tim Hockey (@TimHockey). With an active Twitter account and a LinkedIn presence, Hockey’s witty humour reveals his personality and makes him relatable and accessible to employees and investors alike. Essentially, direct and aptly timed CxO communications can have the reach and impact that structured social media approach cannot.
4. Thinking through Thought Leadership:
Firms across financial services are striving to use thought leadership to set themselves apart. Few, however, are being targeted enough in their content strategy, or bold and compelling enough in their point of view, and leaving room for much of it to be taken online. Delivering forward-looking perspectives into topics affecting customers’ prosperity can have powerful results – it can cut through clutter and more effectively take advantage of digital platforms.
5. Content Marketing for the Millennials:
Credit Suisse has been publishing its own magazine, The Bulletin, since 1895. While it’s inherent purpose may be the same - to strengthen relationships with prospects and customers by building trust, its nature and delivery is remarkably different to serve the millennial customer. Global top players embraced digital content marketing, launched robust newsrooms and filled their webpages with stories. ANZ hired a team of journalists to publish deep market analysis; and Merrill Lynch built an entire publication to help financial advisors take their game to the next level. Barclays announced that its marketing department would function more like a newsroom, delivering relevant content within 72 hours of conception. Today, about 78% of global financial marketers use content marketing. These marketers spend 18% on average of their total marketing budget on content marketing, and 57% plan to increase their spend. But what remains the key to a content marketing strategy is simplifying and personalizing.
6. Tackling Reputation Risks
Embracing these approaches can be instrumental in tackling reputational risks that are inherent to the financial sector.
a. Risk with biometrics/unique identity: The juggernaut of the world’s largest social security enrolment programme (UIDAI) hit a speed-bump with reports of doubts on data integrity. At the time of publishing this report, it was too soon to foresee if enrolments would get impacted significantly in the long run. However, financial institutions as well as reputation managers must be wary of the undercurrent of concerns of identity theft and potential red flags getting raised.
b. Data integrity: Optimisation of user experience should not be seen to be coming at the cost of integrity of consumer data. Data security technologies and infrastructures have come a long way but are debatably not full proof. Several Indian banks in 2016 faced hacking of nearly 3.2 Million credit and debit cards between them.
c. Stability of financial markets: In a sector in which trust deficit between large institutions and their customers is already inherent, 2008 financial crisis put a large dent. Despite recovery of banks and economies, general sentiment has repaired more gradually. Therefore, introduction of new financial instruments may face scrutiny.
The future of India’s BFSI industry in the age of digital democracy is being scripted with big data analysis combined with psychometrics to sharpen artificial intelligence to provide wealth management advice. But what we also see is customised services which still need an offline approach provided by human beings. Robots are not taking away our jobs yet. Yet technological integration will deepen enough to render the term ‘internet finance’ redundant. Ten years from now, it will just be finance.
And, to keep pace with all these, financial service firms can take several different measures to prepare for these transformational changes, such as building innovation labs, funding and collaborating with start-ups, and moving to open finance standards. By thoroughly and proactively studying consumer behaviour, the finance sector can pre-empt and address customer needs through education or innovation. Speed will be one of the biggest factors.
You can access the complete Fincomm Imperatives 2017 report here.
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