Bank marketing = Big data + Hyper-personalisation

Customers increasingly expect that interactions with their bank will be as sophisticated, immediate and personalised as their experiences with other industries – such as retail (e.g., personalised recommendations), transport (e.g., ride hailing) and hospitality (e.g., home-sharing platforms).

Covid-19 has accelerated digital transformation. Delivering on this customer expectation comes with many benefits for banks as well as for their customers, including improved customer experience, increased revenues, higher valuations, and deeper brand loyalty.

Hyper-personalisation is an extension of established personalisation techniques used in marketing. Hyper-personalisation can be defined as using real-time data to generate insights by using behavioural science and data science to deliver services, products and pricing that are context-specific and relevant to customers’ manifest and latent needs.  

At the heart of hyper-personalisation lies the need to have the right data at the right time.

Bank Chief Marketing Officers (CMOs), an increasingly popular role amongst major global banks, are perhaps uniquely well placed to help their organisations to capitalise on the increasingly valuable data that banks hold. They will need to if banks are to even begin to rival other industries in customer experience (CX).

The good news is that banks’ ability to harness ever wider customer data, from proprietary and public sources, is exploding. This offers banks the opportunity to deliver the sort of hyper-personalised experience to which customers have become accustomed, and that has spawned new companies with huge valuations.

Until recently, banks struggled to make use of the immense opportunities promised by “big data”  for marketing purposes. Bank marketers used data in three, fairly basic, ways, to:

• (i) improve the efficiency of customer acquisition (i.e., target the right set of customers, with the right message, and through the right channels)
• (ii) maximise sales opportunities (i.e. predict the products or services customers are most likely to be interested in and to optimise pricing and bundle products)
• (iii) generate cross- and up-selling opportunities.

To capture the bigger prize of hyper-personalisation, banks will need to overcome a number of operational challenges and to radically redefine the role of the CMO. Marketing has historically been something of a curiosity in banks which, instead, prioritised operations and credit allocation. That needs to change as part of Banks’ wider transition to resemble their corporate cousins. Recognising the importance of Marketing in general, and the CMO in particular, is a critical step.

Overcoming operational challenges

Bank marketing functions face two key operational challenges in handling big data. The first is: how can marketers better access and control big data? The second is: how do we make sense of big data? In the digital age, this means how to distinguish the signal from the noise?

Banks will need to put in place a customer data system designed to give control to marketers without them needing additional technical skills. Historically, IT functions have acted as de facto guardian of big data due to the technical complexity required to access most big data systems. This can create a number of inefficiencies when it comes to the marketing function’s access to big data. One route of giving control to marketers is for banks to create Customer Data Platforms and Data Management Platforms.

The big data challenge and opportunity are simultaneously increasing due to the exponential increase in customer activity and our ability to capture it. This makes it ever more important to bring together multiple sources of data, connect the dots to turn the data points into actionable insights and then to swiftly execute based on those insights. To overcome this challenge, marketers will need to select the key data sources and also the key data from those select sources.

The increasing role of the CMO

The CMO role in banks needs to evolve in order for the marketing function to fully leverage ‘big data’ and thereby deliver hyper-personalisation. The CMO will need to gain a higher profile (and be on a par with other C-Suite members). Furthermore, the CMO should stake his or her claim, over that of the technologists, to be the custodian of CX and the customer data needed to manage it.

CMOs’ access to boards varies widely by industry. Just 26% of CMOs are invited to attend board meetings regularly, across industries.  What’s more, the introduction of the CMO into banks’ C-Suites is still new. To increase the CMO’s profile, banks will need to clearly define their remit. As part of this remit, the CMO should be acknowledged as the custodian of the CX and, also be responsible for digital investments in CX.

In a previous article, “The future of banking: CX = AI + HP”, Deloitte noted that CX will be the key to successful marketing.  Indeed, CX is the new battleground, and banks will need to ensure that the CMO is equipped to act as the custodian of CX. This is not an easy task. Indeed, traditionally a CMO’s career has been based on bringing customers in, by promoting product and services marketing. In contrast, to be a custodian of CX, the CMO will need to bring products and services to customers, by shifting focus to customer interaction and CX marketing. This shift will ensure that the bank is offering customers not just valuable products and services, but also experiential trust.

This piece was written by Richard Kibble, Margaret Doyle and Dr Alexandra Dobra-Kiel.