Reshaping BFSI Marketing Strategies

It is hypothesized that we are at the threshold of the ‘Fourth Industrial Revolution’, an era of exponential technological breakthroughs poised to fundamentally change the way we live, work, and interact with one another. Needless to say, every industry, every sector, and every business must adapt and evolve their models to incorporate these advancements in order to stay relevant and witness growth. The world is expected to transform more in the next 20 years than it has in the last 300, which means that no industry or business can rest on its laurels, or rely on traditional and conventional growth models that have allowed them to flourish so far. 

The BFSI (banking, financial services and insurance) industry is no exception. Dramatic changes are disrupting the financial services industry, fundamentally transforming the way financial products are structured and delivered. For instance, the lending function as it was structured is no longer sustainable, #banks and #NBFCs are responding to the change by offering pre-approved, instant loan sanctions online, without the need for cumbersome paperwork and long waiting periods. The digital revolution has facilitated a massive shift in consumer expectations, necessitating quickly adaptable product designs to meet ever-evolving demands. 

This is also apparent if one studies the marketing function within the BFSI industry. Financial service providers can no longer expect loyalty-by-default, they have to constantly reinvent themselves, the conduit for which is their marketing efforts. It’s not only imperative that they innovate new products and services, but also strategies and channels through which they market their products. Sluggish, poorly-targeted communication efforts have no place in a highly digitised world. With an explosion of options available to customers, they have no qualms in moving from one provider to another, based on what’s the most convenient, efficient and cost-effective for them. The task before financial providers, therefore, is not just to build and earn a loyal customer base, but to retain loyalty through constant innovation. 

BFSI industry has responded well to this new challenge, crafting and reshaping marketing strategies and distribution models. In many ways, the marketing efforts of financial services providers mimic the brand-building efforts of the #FMCG (Fast-Moving Consumer Goods) industry -- fostering customer relationships and enhancing customer experience by establishing emotional connections and humanising their communications. Here are six crucial trends that are likely to dictate marketing strategies for the BFSI industry, most of which are already being leveraged by businesses in various capacities. 

1)      Data-driven marketing: Today, the world has access to tools and technologies that didn’t exist perhaps even a decade ago. Where only mountains of unorganised data existed, we now have the tools to streamline, analyse, and leverage this data. Financial institutions must leverage advanced data analytics to glean the most critical insights that inform their communications. Insight-driven marketing has the power to drive exponential growth, build strong customer relationships and customer loyalty, acquire new customers, and enhance overall profitability. And the ownership of end-to-end funnel mamanegment of digital or otherwise acquisitions driving efficiency and scale (Ref: Campaign Management Tools)  

2)      Personalisation: Perhaps the most powerful use of insights powered by advanced data analytics is personalisation for customers. Customers increasingly want to see hyper-personalised, hyper-relevant content that seems tailor-made for them, they expect their service providers to know, and offer, exactly what they want. Providers can attract and acquire customers through curated content, communications that target or are personalised for a whole segment will not work. Customers will remain loyal to a brand that learns their behaviour, preferences, and requirements, and is quickly able to adapt to them in terms of how the provider communicates, what services and products it offers, and even how these services are delivered. Hyper-personalisation is perhaps one of the most crucial marketing trends that financial providers must embrace. Part of this also is innovation in the voice and vernacular spaces allowing users to interact in their own language and voice commands. These efforts will take BFSI #marketing to deeper to more customers.

As gesture of this is to also make it convenient for the customers, for instance the world’s biggest card networks – a group that includes Vica Inc., Mastercard Inc., American Express Co. and Discover Financial Services –have joined forced in an effort to make web purchases easier and reduce what the industry call “online card abandonment”. They have developed a checkout option that competes with established offerings from PayPal and Apple Pay that lets consumer save their payment details all in one place. Retailers then offer it as a payment button, thus eliminating the need to type 16-digit card numbers and expiration dates in tiny boxes (Source – Mint, 23’ Oct’19, P1 “Credit Card firms trying to make e-shopping easier”)

3)      AI and predictive banking: Machine Learning (ML) and Artificial Intelligence (AI), arguably the conduits of the so-called Fourth Industrial Revolution, are also the mediums of disruptive overhauls in virtually every industry in the world. For instance #AI has disrupted travel industry and it accompanies traveller at every point. RARE, a platform that helps travellers discover experiential holidays, uses a simple bot for users to leave contact details and queries on the website, and travel companies get back to them in a personalised and intrusive ways based on user’s preferences. Cleartrip, a Mumbai based online travel aggregator, uses #ML and data analytics to streamline search and discovery by retaining travel-related information previously entered by #Cleartrip users across platforms. Talking on bookings and flight scheduling “We are able to simplify the decision-making process” says Mr. Rajiv Thondanoor, Chief Product Officer, Cleartrip (Source – Mint, 31 Oct’19, P9 “In the AI world, travelling feels like staying at home”)

Similarly, while predictive analytics is already used in banking -- for assessing the creditworthiness of customers, for instance, it can also be utilised within the marketing function. Data mining and AI are crucial for the aforementioned hyper-personalisation for customers, analysing massive amounts of data to build predictive profiles for individual customers. This can then be used to personalise communication. AI and ML are also indispensable in greatly enhancing customer interactions with a provider, and customer experience in general, and it’s therefore imperative for financial providers to have a dedicated AI strategy in their marketing and distribution efforts. AI and ML can be leveraged in marketing in several ways, and it’s a chance for providers to get creative. For instance, these technologies can be used to understand customer intent through their digital activities and behaviour, which was previously only available through search histories, and automatically link intent with appropriate offerings. AI can help curate and customise content for individual users, and also offer products and services matching their needs and preferences, making for unparalleled customer experience. Another example is AI assistants and chatbots that are becoming increasingly sophisticated and mimicking human interaction. These are the next big frontier in customer service, and financial providers must integrate these technologies into their marketing efforts. ML can significantly enhance the quality of these chatbots that can be trained to field and solve customer queries (not just predictable ones) in a manner that is personalised and engaging. 

4)      Digital marketing: While even a few years ago banking without physical retail branches would have been unthinkable, today, financial institutions are increasingly focused on delivering products and services on-the-go, through websites and mobile apps. It obviously has been prompted by increasing internet and smartphone penetration , the ongoing digital transformation in the country is expected to increase the total internet user base of India to 829 million by 2021 (from 604.21 million as of Dec’18). Marketing and sales efforts are proportionately allocated from offline and mass media channels to digital marketing strategies such as:

• Mobile Marketing: The mobile channel is crucial, given that a majority of customers use their mobiles to access information and carry out financial transactions. Many financial providers now have a comprehensive mobile marketing strategy aimed at engaging and informing their customers on-the-go. Mobile strategies are of particular significance in tapping new markets in India, given the high level of mobile penetration and poor levels of financial inclusion in underserved areas. In a recent interview with ET the global CEO of Western Union, Mr. Hikmet Ersek, did mention that India is one of the four largest market and Western Union is investing heavily on enabling payments digitally. To add to the value of targeting mobile, he went on to say that people’s behaviour is changing and retail is getting slower growth, and account payout and digital payout (and Wallets) is growing like a rocket.
• Content Marketing: Through SEO content and other strategies, content marketing is fast becoming one of the most effective and preferred methods of engaging, acquiring and retaining customers, and building brand loyalty through meticulously targeted content. Does the website have a hub that features blog posts, infographics, Q and As and other rich, useful content? If not, the content strategy might be missing out on a big marketing opportunity. Not only should you be marketing with content, but a sound content marketing should also include videos. It’s important for example a bank to show stories about the people it serves and the communities in which it operates. Tapping into this resource and making the most of the power that “show, don’t tell” holds.
• Display advertisements: Another type of marketing that’s unique to the digital space, display ads are still or video advertisements that appear as banners, boxes, pop-ups, and overlays on third-party websites. These are also extremely data-driven, where financial providers can tap into potential customers by placing ads relevant to them on specific third-party pages that they are likely to visit often. 

5)      Social media: No marketing strategy is complete without a comprehensive social media vertical. Providers are moving to mainstream social media channels, Facebook, #Twitter, #Instagram, #LinkedIn, where both room for content experimentation and potential for acquiring new customers is vast. Social media is not only a great platform to showcase new products, it’s also a space where financial providers can leverage celebrity and influencer endorsements that are likely to be hugely impactful for younger audiences. Social media is where businesses can most effectively build a credible brand identity and maintain high visibility. And that’s not it platforms like Facebook also boast of enabling marketers with tools to sustain business growth. In one of the advertorial it touches upon consumers’ expectation on convenience, speed, automation and simplicity along their online purchase decision and journey. Facebook’s Zero Friction Future (ZFF) claims to simplify consumer journey and enabling business growth, for instance case in the study is that of leading Auto players (Maruti, Hyundai & Royal Enfield) that have also turned to Facebook to Boost Sales.

In pic is their broad Media plan, the measure of the business impact and some key takeaway for marketers that relevant to BFSI too.

6)      Multibranding & Partnerships: A long-standing favourite with FMCG businesses, multibranding is a strategy that, amongst other things, can be quite effective at defending market share. Financial service providers are increasingly employing this strategy as part of their evolving marketing efforts, particularly with a suite of digital products, offering competing services under one umbrella targeting diverse market segments and audiences in order to capture a larger market share. Lastly but not definitely the least is to find and enable partners to work with in the eco-system. Whether a hospital or real estate agency, CAs, Media Houses, the whole idea is to align yourself with other businesses that can help you bring in new businesses and customers.  

There’s strength in numbers, after all, especially when it comes to marketing strategies for banking. Be it fostering customer relationships and enhancing customer experience or Partnerships aka Cooperative marketing help the financial organisation build new relationships and it help find new markets, like homebuyers who need to take out loans or the parents of young children who are looking to start bank accounts and so on and so forth.

#BFSI is living in the interesting and evolutionary times and glad to see marketing assume more than it traditionally did and evolve rapidly!