Digital marketing can transform banking services
The increased growth of digital channels is said to change the way customers use banking services. Likewise, banks are focusing on digital marketing initiatives to target this growing segment of customers. Experts believe this trend will grow phenomenally over the years, with ‘digital’ emerging as the primary channel of interaction for banking, revealed a recent report by Wipro in association with Efma.
The report titled “Global Retail Banking Digital Marketing Report” examined how well banks are doing at digital marketing initiatives. The survey that polled over 3000 banking entities from over 130 countries, notes that location, context and behavior-specific real time marketing, driven by analytics is likely to be the norm in the future. According to Rajan Kohli, Vice President and Head – Banking and Financial Services, Wipro, “Digital technologies, social media and the explosion of data are clearly redefining customer engagement models.” He explains that in this survey traditional advertising represented just 55 per cent of the total marketing spend. Likewise CMOs in banks mentioned that as banks adapt to the development of new channels and capabilities, their role is undergoing a significant change.
Changing role of CMOs
Experts believe that this changing role of CMOs owing to increased digitization is an interesting phenomenon in organizations, especially in customer-centric enterprises like banks. According to Virginia Sharma, Vice-President, Marketing and Communications, IBM India and South Asia, “In the modern data driven era, customer satisfaction is paramount to bank’s success. Therefore the CMO’s role has also moved beyond the traditional function of brand building and promotion. He is now supposed to leverage the digital medium for strategic marketing advantage. She mentions that marketing is confronted with data from diverse sources that needs to be analyzed and used effectively.
However, banks are yet to leverage digital marketing at its full potential. The Wipro-Efma study reveals that only 13 per cent of the banks surveyed demonstrate the highest level of maturity in digital marketing, including a bank’s capability on data management, service delivery, marketing processes and usage of analytics. The results highlight that a majority of banks do not practice real-time event driven marketing and the ability to focus on personalization.
The Wipro-Efma study also revealed that social media has not yet become a part of mainstream marketing and is still not considered a key customer interaction channel. “We found that social media efforts were mainly managed by the marketing department followed by the branding and communications team.
Given the inevitable trend toward greater use of digital channels by consumers, the Wipro-Efma report suggests a number of recommendations for banks.
- First of all, banks should consider how they expect customers to interact with the bank five years from now, and particularly how they envisage customers will buy financial products in the future
- Secondly, they should carefully assess the bank’s current digital marketing capabilities along the dimensions we have identified in this study to identify areas of weakness
- Thirdly, banks need to develop a plan for investment in digital marketing capabilities which will ensure that the bank is in a position to get ahead of, or at least keep pace with, competitors and changing consumer behavior
- Finally, they need to closely monitor developments in “big data” and where possible take the initial steps of testing some applications of the new technologies that are available.
With banks increasingly realizing that business results are often measured in terms of technology investments, and digital marketing can potentially fuel their success, Sharma believes that the ideal situation is when marketing and IT forges a strong partnership in order to facilitate better engagement between the brand and customers. This will help banks in driving long-term growth beyond the current marketing campaigns.
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