Pros & Cons of Digital Marketing for Banks!
Highlights the opportunities and challenges faced in using Digital Marketing for Banks and Financial Services.
Research:
With reference to the 2013 Global Retail Banking Digital Marketing report, the key trends have been identified. Underpinning the growth of Digital Marketing is the growing access to the Internet, and the proliferation of mobile phones. The trend in the last 10 years has been significant across the Digital Channels. Today, majority of the Banks offer online Banking, and in the next few years majority of the Banks will offer mobile banking.
Opportunities:
Broad Customer reach: Digital Marketing offers significant opportunity to Banks and Financial Services to extend their customer reach. These channels meet the customer need of convenience and speed.
Social Media: Banks need to focus on two questions, how they expect customers to interact with them in five years? , And how will these customers buy products and services in the future? Face book and Twitter have proved successful, but how they evolve is crucial to track.
Focus on Gen Y, who are quick adaptors to Technology. Developing countries offer growth and have a relatively young population, so the impact of Gen Y on the digital trends cannot be underestimated.
Encourages Creativity and Innovation in satisfying the customer.
Create a Digital Strategy based on testing, segmentation and data analytics to stay competitive in the Banking space.
Challenges:
1. Digital Marketing growth is different in the Developing Countries and the Developed world, because of Internet access speed and Internet penetration. Therefore, sales and marketing efforts need to be balanced across the various Marketing Channels.
2. Real Time: The ability to have Real Time Single Customer views of products and transactions across channels, and the ability to conduct Real Time event driven marketing using digital marketing is limited for most of the Banks today.
3. Measurement: Testing and Learning processes are weak along with the lack of measurement on the return on investment. Banks will need to address these capabilities as a priority.
4. Big Data: Handling Big Data poses a challenge, because it is beyond the ability of typical database software to capture, store, manage, and assess. Despite the use of predictive analytics within Banks, most do not have the capability to integrate this in Real Time, into their Marketing initiatives on a multi channel basis.
5. Return on Marketing Investment: Assess the banks digital marketing capability on a regular basis, and invest based on future trends.
6. Regulations: Established Banks operating in a highly regulated environment pose a bigger challenge for Digital Marketing.
It is an on going challenge for Banks, to optimize the Digital Marketing potential. Thereby Online and Mobile Banking technology become key focus areas.
The 3 questions that need to be answered are
a) how to disseminate information on new products and services using Digital Technology?,
b) How to engage customers?,
c) how to use customer information and personalize the marketing?
The dynamic nature of the digital landscape in conjunction with the uncertainty will continue to keep this a hotly discussed matter into the near future. Every challenge that is met in a timely and thorough way will prove to be a clear opportunity.
Digital Marketing 