Banks: Even Better Shopping Companions than your BFFs – Part 1 of 2

The festive season is approaching rapidly. As usual around this time we are bombarded by our bank with ads in SMS-messages, emails and on social media for those “special offers exclusively for you”. Unfortunately they are “special” in the sense that they are often totally irrelevant from a timing and location perspective and have limited applicability/relevance with regards to the products or services that we are actually interested in here and now.

Isn’t there a way for banks to improve on these actions, waste less of our time, be more to the point with their messages and support us, customers, and the merchants who have signed up to the bank’s promotional programs?

There certainly is: technology has made great progress and is capable to help banks to become very relevant to us but let’s first look at the current situation and the trends in customer engagement.

Current and Emerging Trends

Over the last couple of years financial institutions have renewed focus on customer-centricity, with many banks indicating at the start of 2013 that this was their top priority for the year. The reasons for this are varied (decreasing customer loyalty, increased competition, competition from telcos and new players in the payments space, etc.) and have prompted FIs to look for new and innovative ways to engage existing customers and boost customer loyalty. The typical FI customer profile is also different – mobile, informed, socially-engaged, and technically-savvy, and with that comes changing expectations. Technology plays a big part – mobile, information at the speed of light, information available anywhere/anytime, big data, and always and everywhere on.

Stricter Privacy Laws

In the Asia-Pacific region, many countries are tightening up their privacy laws which further places restrictions on if and how FIs can contact their customers. In such an environment, bank are forced to rethink and innovate ways by which they can reach their customers while being compliant, as well as look to ensuring they maximize value from every interaction, especially those where the customer has reached out to them. Real-Time Offer solutions have been used for such purposes – leveraging a customer-initiated contact with the bank as an occasion to propose products and services and to learn more about existing and prospective customers.

The retail industry has typically been at the forefront of innovation in customer experience and FIs looking to focus on customer-centricity have also looked to this industry for guidance. One key trend is the marketing focus moving away from the traditional broadcast model and embracing the vision of 1-to-1 marketing. So what are some of the ways that banks have looked for these kinds of opportunities to get closer to their customers?

The Problem with Loyalty Programs

Many banks have credit-card related loyalty programs through which retail shops and restaurant promotions are made available. The only requirement might be to use the bank’s credit card for payment in order to activate the promotion. The challenge here is that throughout the customer buying cycle, and often at the purchasing decision point, the customer does not have on hand the relevant promotions that might help them decide whether to eat at one restaurant or another, or whether to buy that new Xbox game from this particular store or not. These offers are typically mass-listed in a hard-copy brochure that came with their monthly statement, crudely categorized on a website, or sent to the customer with little logic as to what time it is or what the customer is currently doing (think an SMS offer for a lunch-time special received at 6pm when you are at the airport about to fly off of a business trip).

So in a perfect world, how should it work? It’s 11:45am and I get alerted to an offer for a lunch-time special at ‘Burger Barn’. Why? Because it’s coming up to lunchtime, my profile indicates that I’m cost-conscious, I spend at burger king regularly, and there’s a Burger Barn just 25 metres up the road.

In the upcoming part 2 of our blog, we’ll discuss how banks can bring it all together with precision marketing.


–          Brenda Ng specializes in Customer Experience for Financial Services and is part of the APJ Industry Value Engineering Group.

–          Louis Teunissen is an architect with the APJ Industry Value Engineering Group specializing in Banking, Insurance, Leasing and Cloud

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