As bank branches close, digital community marketing strategies take center stage
As banks shutter bricks-and-mortar locations, they need new marketing approaches, says Maria Ostberg at Kepler. For our finance & utilities focus, she asks, can this help them fend off tech-savvy challengers?
As the banking industry shifts away from physical branches, the emphasis on digital banking increases. With that, consumer expectations for convenience, transparency, and personalization have reached an all-time high.
Marketing teams have had shift focus to driving awareness of how their brands navigate these evolving demands by, unsurprisingly, leveraging digital means. Amid stringent marketing regulations and increased competition, they are also faced with significant challenges.
Driving brand awareness becomes increasingly important as those everyday signposts of a brand (like storefronts) dwindle.
Some banks are still in the nascence of this digital marketing journey, with awareness strategies underpinned by educating customers on the bank’s digital features.
However, a combination of more digital savvy audiences and the new-to-market, digital-first challenger banks means that convenience and ease on digital platforms are now nothing less than expected by consumers. This means these factors cannot be the overarching theme of marketing strategy.
The more evolved brands are those that have moved past this stage, instead community engagement as their overarching strategy. This approach enhances awareness and trust and has become key to compensating for the absence of physical locations.
Community focus
The focus on investing back into the community through sponsorships, events, and partnerships has helped banks maintain a local presence, foster relationships, and increase trust, which could be easily lost without physical branches. HSBC and First Direct’s partnership with Shelter, Santander’s sponsorship of bike rentals in London, and NatWest supporting women’s cricket and increased support for gender equality in sports are recent, notable efforts.
Banks’ support on social and ethical matters has also become more critical due to the recent turbulent financial climate following Covid-19, high unemployment, and high mortgage rates, which have damaged consumer confidence in financial institutions.
The shift in strategy from educating an audience on digital features and presence to building thoughtful storytelling by leveraging involvement and outcomes of community engagement cultivates deeper emotional connections with both existing and new audiences. This can help to foster awareness and consideration through trust.
By focusing on driving awareness of brand, more than a product, marketing teams can swerve all the terms and conditions that are required by regulators like the Financial Conduct Authority (FCA). Of course, messaging still must be compliant with advertising standards and should not mislead consumers about the bank’s services or values. But the look and feel of creative become more relatable to support the journey of building trust.
Social factors
The rise of influencer marketing on social platforms has proven effective in achieving this balance by blending engaging, familiar, and relatable content with a side of T&Cs. If a brand is in the market for an audience with a higher average income and age, repurposing content to activate ‘newer’ platforms such as Pinterest and LinkedIn can support these more thoughtful strategies, as users’ frame of mind when scrolling on these platforms tends to be more thoughtful and engaging.
Social platforms support closing that gap in communication between brand and audience, which branch closures widened. This, of course, comes with the risk of negative comments and backlash. It’s important to have a team in place to monitor comments and engagement multiple times a day and a strategy for addressing negative feedback promptly and professionally.
Data wins
With the shift to a digital presence, the volume of data available that can be used to track and analyze user behavior across digital platforms, allows banks to gain valuable insights to inform marketing strategies. This is increasingly important given a rise in competition from challenger banks. These are built on digital principles and at an advantage from the get-go, with data in mind.
Data-driven marketing strategies allow for increased personalization and can support highlighting services based on consumers’ behaviors and preferences. For example, first-party data and a digital footprint can indicate that Anna, 21, who took out a student loan with a bank three years ago, is now in the market for her first job. As such, it might be a good time to target her with an engaging TikTok ad offering a savings account.
But as competition has increased, a savings account on its own may not be quite enough to persuade her, even though she is well versed in your brand. If a savings account offer is aligned with the right perk, though, such as free mobile phone insurance, it might increase that persuasion. This approach allows banks to increase customer lifetime value by intertwining an everyday nice-to-have with an everyday must-have.
It’s a competitive time for finance institutions. But if marketing efforts can strike the right balance between driving awareness through community engagements and leveraging technology to super-charge their data-driven strategy, banks can successfully navigate the complexities of modern marketing by both acquiring new customers and increasing the value of existing ones.
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