Posted by Mallory Green on November 19th, 2014
With digital technology at the forefront of marketing strategies, banks and credit unions are working tirelessly to create a digital relationship with account holders that incorporate more than just banking statements deployed to an email address. These consumers expect their bank or credit union to understand their behavior, preferences and choices and aren’t ruling out switching to a different financial institution if their individual needs aren’t met. This shift in consumer mindset is forcing financial institutions to take a customer-centric approach or face high attrition rates.
Understanding Financial Consumers in the Digital Era, a study conducted by CGI, concluded that consumers want their bank or credit union to be an integral part of their lives by anticipating their needs and offering advice and tools based on those needs.1 Financial consumers understand and acknowledge that their bank or credit union has intimate knowledge of their lives and spending habits, more so than any other brand they may be loyal to, but instead of preferring an anonymous relationship, these people want to be reached and communicated with on a more personal level.
The average banking consumer who is left unsatisfied based on his/her expectations is showing little hesitation to leave his/her current bank or credit union for a better solution. While, according to the CGI study, banks and financial institutions are succeeding in treating consumers like a person rather than an account number, an average of 54 percent are unsatisfied with the financial advice provided by their bank or credit union, which has led them to consider taking their business elsewhere.1
The key to meeting the needs of the digital banking consumer is to put strategies in place that build customer profiles to include more than basic demographics like name, age, gender and race to but to include details that focus more on behavior. These consumers care about how to increase the amount in their bank accounts by receiving investment tips and advice on how to save money based on spending habits. This kind of business intelligence and data collection will help any financial institution send out more personalized messages rather than one-size-fits-all communications that are deployed to an entire consumer database. It is essential to identify valuable content and provide it through a variety of channels like email, direct mail or dynamically on your website. These strategies will not only increase loyalty, but also it will keep consumers engaged and attrition rates down.
Today’s banking consumer wants to be offered customized content that provides information on spending habits along with tools to increase his/her net worth. By focusing on leveraging behavioral data, financial institutions can begin to build full-blown customer profiles that offer insight into each individual’s wants and needs. With consumers looking to find the right financial institutions for them, incorporating these types of strategies will not only keep your current customers satisfied but could lead to a lot of potential new business.
Posted by Kavita Jaswal on November 14th, 2014
With technology at the forefront of society, wearable technology has become a digital trend that continues to grow. Consumers can monitor their health, make calls and take pictures among other things through mechanisms they can wear. With all the wearable technology available, companies continue to strive for the next innovative product that will surpass existing wearable technology.
Digital wallets are becoming the normal, because it essentially makes the lives of consumers easier. No longer is it necessary to have a physical wallet let along six pieces of plastic stored away in it. But in a society that craves simplicity, the extra step involved to take out the smartphone and access the apps while standing at checkout can be a daunting task. But, industry leaders may have found the “next big thing” by revolutionizing a wearable form of payment.
Taking cues from the trendsetting programs like Apple Pay, Passbook and Google Wallet, Nymi is a is a mobile payment that is in the form of a wristband instead of a smart phone. While apps like Apple Pay work with one’s fingertips for payment verification, Nymi charts one’s “unique cardiac rhythm” to verify his/her identity at checkout.1 The first thought that comes to mind is how something like one’s heartbeat can even feel or seem safe especially with the recent spike in data breeches, but the technology uses more than just a person’s heartbeat to verify one’s identity. Nymi focuses on three levels of security – a person’s unique cardiac rhythm, the bracelet and an authorized authentication device, such as a phone. All three must be synched in order for the wearable mobile payment to work.
Once the bracelet is synched with your smartphone, you are not required to carry your phone around with you as long as you keep the bracelet attached to your wrist. Once the wristband is worn, it reads the person’s unique cardio rhythm and then uses sensors to make sure the wristband is still on one’s wrist. Once removed, the wristband will need to be re-authenticated to the person’s heart rhythm and synched with the authorization device when put back on. Currently only available in Canada, Nymi is in its very early stages and is being offered in a pilot program through MasterCard and Royal Bank of Canada.
With all the latest innovative offerings of wearable technology, the next big wearable devices could be the latest form of mobile payments. Companies continue to offer wearable options that not only add value for the consumer but also uphold the trending technology of today.
Posted by David McMurray on November 7th, 2014
The topic of Net Promoter Score (NPS) comes up regularly in conversations with our clients. It is popular with many researchers and companies that measure advocacy using questions like, “What is the likelihood you’d recommend this company to family and friends.” While I accept NPS as one of many legitimate measurements of advocacy, I don’t view it as better than other commonly used approaches.
I consider NPS as another descriptive statistic. But, just like other descriptive statistics, such as a mean score, NPS also suppresses variance, which may mask or distort the real story told by the survey data. For instance, on a 5-point scale, 100% 3’s produces the exact same mean score as 50% 1’s and 50% 5’s – which are two entirely different scenarios. Without looking at the distribution of ratings behind the mean score, the variance in the data is suppressed, as shown below.
Same Mean Score but Big Difference in Frequency Distribution
When using 11-point NPS scales, the variance is also suppressed in the calculation of the mean, as well as the NPS score itself. While the mean score would reflect that variance, the NPS can totally suppress it. The following two examples produce the exact same NSP while the frequency distribution shows a wildly fuller picture of what’s going on.
Same NPS but Big Difference in Frequency Distribution
Because of the negative perception an 11-point NPS scale can give a brand, it is recommended to stick with a 5-point Likert approach when measuring advocacy for the following reasons:
- Makes it easier to compare to two other loyalty questions – satisfaction and loyalty. Using the NSP scale on just one for the three loyalty questions would make comparisons difficult.
- If surveys are all based on the 5-point Likert scale, comparisons from one survey to another is much easier.
- Translates easily to other potential methodologies, especially if you choose to conduct personal telephone interview.
Posted by Stephen Nikitas on October 28th, 2014
Over the past several years, financial institutions have come to recognize the importance of incorporating a variety of channels when communicating with their account holders. Direct mail, email and mass media all go hand-in-hand when conducting promotional campaigns. In order for account holders to see and hear the same messages, financial institutions must have all communications channels pull in the same direction to make marketing campaigns as effective as possible.
However, there is a missing link in this exercise. And, for marketers, it is sitting right in front of them – retail staff. All too often, campaigns are brain-stormed, devised and implemented without bringing tellers, platform staff and contact center employees into the mix. This oversight, or challenge, unfortunately can make the best of marketing initiatives fall short of their potential.
While the numbers are declining, better than two-thirds of bank and credit union account holders still visit a branch and more than a quarter of them still pick up the phone and call their financial institution in order to speak with someone about their finances. This indicates that branch sales can and will remain critically important to retail banking. Although more origination volume is shifting online, 71 percent of consumers still say they prefer to open an account in the branch.1
Across retail banking there is a vast surplus of branch sales capacity, however, it is less common that a retail bank or credit union has developed a truly proactive sales outreach. Most branch and contact center teams are still stuck in a reactive, order-taking mode that relies on advertising and promotion to drive sales. But, marketers are forgetting something critical, more than four out of ten consumers say they open an account after talking to a staff member, which means consumers want advice and consultation from branch staff to help them make a decision.2
While marketers are building promotional campaigns with advertising, direct mail and email, do not forget about bringing the retail staff into the mix. To support promotional campaigns, make sure branch staff is trained in needs-based selling and consultation. Remember, this endeavor is a journey and not a destination. Give branches realistic metrics to achieve in support of promotional campaigns and continually analyze and adjust based on the results. Always measure staff goals for each campaign and reward those branches that meet and exceed them. Finally, make sure to regularly share best practices among branches so that the weaker performers can strengthen their skills in time for the next promotion.
1. Novantas. Transforming Retail Sales Force Economics (2012).
2. Gallup. US Retail Banking Survey (2013).
Posted by Mallory Green on October 22nd, 2014
Recently, data breaches and credit card fraud have been in the headlines starting with the massive attack on Target in December 2013 when every location across the country was hacked and nearly 40 million credit and debit card numbers were stolen.1 In September 2014, Home Depot was at the center of a data breach that impacted 56 million cardholders, and it probably will not end there.2 As more people utilize electronic forms of payment, the higher the risk for larger and even more devastating attempts for hackers to steal credit and debit card numbers. But change may be on the way in the form of a microchip.
Currently, most American bank issued credit and debit cards rely heavily on a magnetic strip located on the back on the card. The magnetic strip “contains and unchanging set of information that includes the cardholder’s account number, expiration date, and security code.”1 Although you aren’t necessarily putting yourself at risk every single time you use your card, the static information on the strip makes it easy for the information to be reused once hackers obtain the data, because counterfeiters can easily create duplicate magnetic strips using encoding machines. The duplicated strips are then placed on fake credit cards and sold.
But, integrated circuit cards or EMV, which is named after credit card companies EuroPay, MasterCard and Visa, could change all of that. Currently, close to 100 percent of all credit card terminals in Europe are using a chip-based technology, which have proven to significantly reduce card fraud.1 Instead of utilizing the same set of static card information every time you buy something in the store, EMV focuses on a chip-based authentication, which changes the numbers every time the card is swiped making duplication impossible.
The jump from magnetic strips to EMV chips should help financial institutions and credit card companies alike. The promise of security has become a huge marketing tool as more Americans are asking questions about how their data is being handled and what processes are in place to rectify a breach. The switch could eliminate fear and encourage people to begin using their credit and debit cards at point of sale checkout machines once again without hesitation.