Finance and digital communication: an increasingly tight relationship

Will traditional banks still exist in the future? This is one of the main questions posed by the Fourth Industrial Revolution. Big data, open data, Internet of Things, machine-to-machine and cloud computing are just some of the technological innovations that are radically changing the world we live in, and the financial world is no exception.

New technologies are bringing major changes throughout the banking sector at an unprecedented pace. Consumers are not only increasingly adopting digital technologies, but most of them are just demanding it. This tech revolution has also allowed non-banking operators, such as Google, Amazon, Facebook, Apple, etc. and the new fintech realities, to enter the industry, particularly the payment services business.

Competition is growing and the customer is now able to make his own choices almost independently, having time to search, compare and choose products through a process that is entirely online. It is therefore vital for retail players to develop a new type of digital communication, which allows a more customized communication strategy for each client, based on a deep understanding of one’s specific needs and preferences.

How is the financial sector progressing in this new context? Well, it’s lagging behind, especially in Italy.

 

The modern client? More exigent and less faithful

The time when the customer relied completely on the consultant to open a bank account or to choose a financial or insurance product is coming to its end. Nowadays, this process takes place online for the majority of people, especially among millennials. In Italy, there are already more than 11 million users who have already tried at least one Fintech & Insurtech service, equal to 25% of the Italian population between 18 and 74 years old, and the figure is growing strongly compared to a year ago (+54%), when the percentage stood at 16% (survey conducted by the Fintech & Insurtech Observatory with Nielsen Italy).

So how can banks and insurance companies address this growing problem? One solution is certainly the development of a more efficient customer experience that meets customer expectations.

Beware: we are not talking about a purely online customer acquisition, since the offline part still has its own value, especially when it comes to people’s savings. Offline and human contact still play a dominant role, especially in the final conversion phase.

 

The ‘Inverted ROPO’ effect (Research Online, Purchase Offline)

The term “ROPO effect“, known mainly in the retail world, stands for “offline research, online purchase”, and identifies the process by which customers, before buying a product, do research and experience it in a physical store, and then buy it on online channels, mainly for price-related reasons. Well, regarding the financial world, the ROPO effect is “inverted” and becomes “Research Online, Purchase Offline”. More and more often end users prefer to approach and take information about financial and insurance products on digital channels, and then complete their purchasing experience in the traditional way, that is offline.

According to McKinsey, in fact, in 2015 there were 11 billion revenues in the financial world deriving from the ROPO effect: 38% of these revenues were obtained from a sales process entirely online, while the remaining part from an online acquisition that was then completed offline, i.e. physically in a subsidiary. A phenomenon that should be considered as a great opportunity by professionals in the sector. The digital channel must play a fundamental role in the upstream part of the end user conversion funnel, arousing curiosity, interest, but, above all, proposing solutions that satisfy a real need, even if the purchase decision will end on offline channels and with traditional methods.

 

Consumer experience marketing: the customer at the centre

Experiences, fears, emotions and memories: these are the main feelings that the customer associates to the product, at any stage of the customer journey.

That’s why nowadays an effective communication strategy must enhance the customer experience as a tool to provide the client with an added value compared to the simple purchasing of the product or service.

It is therefore no longer enough to guarantee quality products and services perfectly tailored to the needs of customers, also because these aspects are, so to speak, already implied by the customers themselves. Rather, each company must introduce strategies aimed at involving consumers more efficiently, placing them at the centre not only of the communication strategy, but also of the entire process that leads to the finalisation of the transaction.

 

Banks and insurance companies: your brand is not enough anymore

Banks and insurance companies possess a large amount of data on the behaviour and habits of their customers, but very often they use very traditional communication practices and, as a result, the digital channel is still under-exploited; in fact, it is not enough just to be present on any type of social network if you are not delivering efficient content to the end customer. Very often big banks and insurance companies tend to leverage only the power of their brand without proposing a smart content strategy that can convey the right messages to meet the real needs of their users.

There is also a lack of detailed knowledge of the target audience. Very often, in fact, marketers tend to provide their audience with generic content, without any real in-depth study of their needs, weaknesses and interests. In this sense, for example, the lack of communication plans aimed at sensitive issues such as financial education, which has always been the burden of Italians, is emblematic, as demonstrated by their weak investment choices.

The adoption of the latest technologies, like data analysis and machine learning combined with the use of digital platforms such as CRM, can allow financial institutions to identify not only their purchasing habits, but also the best time to contact customers and the most relevant format to use. The aim is to provide individuals with “tailor-made” communication in line with their needs, requirements and interests. The right content, at the right time and through the most appropriate channel.

 

When personalization is everything

This is precisely the future of digital communication: the use of data and analytics to create a strategy that understands and adequately satisfies the needs of customers, with valuable content which in turn increases the chances of having a significant interaction.

The equation is simple: the more the financial or insurance institution is able to provide personalized services and content, the more positive will be the sentiment and experience among clients, which will naturally result in an increase in sales conversions.

The customer thus stops feeling simply a practice number, on the contrary, perceives that his needs matter and that his needs are listened to. Ultimately, this means proposing a user centred and non-product centred model in your communication strategy and marketing activity.

In this way, the customer experience will become a formidable tool for conversion and retention of different clients, who will also develop a sense of belonging that turns them in the ambassadors of that very same brand.

 

Virtual B solution

Virtual B has been working for years in the financial sector, with a close focus on data and data analysis. Our experience has led to numerous solutions that generate value and solve issues for financial and insurance intermediaries.

Virtual B’s digital unit is specialized in content and CRM strategy for the financial sector: creation and management of branded content strategies for digital presence or lead generation projects.

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