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Financial sector incumbents need to step up

Ben Dickens, March 7, 2016

Technological disruption is shaking up the finance industry as we know it. Peer to peer lending, mobile-only banks, online investment funds, the list is growing, increasing the demands on the sector incumbents to step up

Looking at whole market when planning within Financial Services (FS), we encounter the same issues affecting the brands we work with time and again:

relevancy
Relevance
perception
Perception
competition
Disruptive competition

You can see these issues being combated very clearly if you look at the approach of the high street banks. Digital products and services and highly emotive brand advertising are no coincidence, born of an understanding of consumer needs and perceptions. These issues however, are something that are affecting the whole sector in some way or other. With particular experience across the sector, especially with those brands dealing with high net worth customers, we’ve developed a detailed understanding of these issues and more importantly, simple strategies that lead to marketing success.

relevancy

Relevance

Relevance is something that we have encountered heavily amongst heritage brands in the sector. As the world has moved on, some businesses have struggled to keep up, traditional new business channels have become less successful and whole generations of potential customers simply don’t know who these businesses are or why they would need them. Our research shows that as technology-native wealth creators have emerged, they have bypassed the traditional, introduction-based new business funnel. The solution here is to establish the conversation earlier in the customer journey and demonstrate relevance and understanding. Often this means doing something in digital, something that clearly demonstrates the brands relevance early in the customer journey and begins to develop a relationship.

perception

Perception

Perception is still a big issue. Whether your brand has been tarnished by indiscretions of the past or it’s a case of guilty by association, the general perception of the FS sector is not wholly positive. There are a number of different ways to approach this. If your budget is large, make an advert where you return a lost item of clothing with particular sentimental value, or you can focus on getting to the heart of your customers needs, passions and goals. As with relevancy, if you can position your brand as a relevant brand who understands your customer, their needs, goals and importantly their journey, you will build credibility. This will help develop the trust that naturally arises through understanding. It requires an holistic view of your customer and a detailed understanding of your brand, ensuring the activities you undertake make you stand out.

From a design perspective there seems to be a race within FS towards uniformity, particularly in terms of brand identity and web design. This kind of uniformity can only end as a negative, particularly when looking to build trust and credibility. It’s a fact that consumers buy into good design, they react to something that offers a great user experience and has an identity not identikit.

competition

Disruptive competition

The third key problem affecting the sector is the disruptive competition. The rise of fintech start-ups is growing month on month and it’s putting key pressure on incumbents. We’ve written before about how each sector will have an Uber moment, FS seems a sector primed for this to happen in the near future. Driven by an understanding of the landscape, competition and customer solutions designed to take back customer share should focus on the entire brand ecosystem of products and services. The key is developing a strategy that works across multiple channels and can accommodate the integration of new products, digital platforms and services alongside existing offerings to create a holistic portfolio. We often use digital platforms to reach the customer earlier in their journey, building a relationship before they move into the more traditional face to face led phase. Ultimately a robust overview of the situation leads not just to successful marketing, but very often the insights uncovered identify opportunities for new products and new business directions, which can be quickly launched and scaled in the digital space.

Our services and ultimately what we deliver often blurs the line between marketing and business propositions acting as new entry points for consumers who have otherwise perceived barriers to working with our client brands. It’s not all doom though, incumbent brands do have a key advantage, especially if they can tick the first two boxes of relevance and credibility. Their infrastructure is very often geared towards lead nurturing, the problem is bringing the consumer into the funnel as we’ve discussed. Once there, a more traditional approach can be applied, traditionally a strength, of building the relationship. The key is knowing what to do and when now that the customers journey has been significantly altered by technology.

Understanding your problem is the first step to doing something about it. At DVO we apply a no-nonsense approach to the work we undertake, taking the complex and creating beautifully simple solutions that work. We do this particularly well for brands in the financial sector. We’d love to discuss how we could help with your specific challenges, call us on 020 3771 2461, or use our contact form.

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