Financial institutions are some of the most powerful businesses in the world. Technology is developing and their opportunity for on-to-one marketing is significant. However, are financial institutions making use of the data available to them for effective marketing and is the technology developing as fast as we assume, or has nothing really changed since the 90s? Writing exclusively for ExchangeWire, Timothy Hoyle suggests marketing technology in banking still has a long way to go and financial institutions should improve their one-to-one marketing communications. Hoyle, owner and chief consultant, ETH Solutions, has decades of experience in banking, financial institutions, and fintech and was a founding member of the NCR© Secure program assisting financial institutions in protecting their ATM fleets. 

Having been in the banking, financial institution (FI), and now the fintech world for quite a few years, I find that many of the lessons we learned years ago have become new thought leadership opinions. Take the use of one-to-one marketing as an example. In 1996, at what I would call a pivotal moment in my FI marketing life, I saw the ability to market to our customers in a way that would reach them with new products, new services, and capabilities no other financial institution was offering. I had epiphany after epiphany that I recorded and discussed with our CEO, both during an industry conference in New Orleans as well as after returning home.

What did I see at that time? The use of technology to ensure customers could more easily, or ubiquitously, access their accounts. I saw websites, call centres, lending centres, investment capabilities, and remote teller banking as ways to encourage customer base growth and to be a leader in the field. I always kept in mind that being a leader did not concede itself to money but, rather, the ability to develop and deploy an idea that another organisation would not easily be able to copy simply by spending money to purloin the idea. Indeed, idea development, and marketing the idea, ensured the ability of our bank to stay ahead of the competition; alas, money does indeed come into play with any marketing decision no matter the leadership position within the market segment of your industry.

So, with the ‘disruption’ discussed in many varied aspects of financial technology and banking today, is there anything really new, or are we releasing the same movie for a new generation to watch? Consider the following examples:

1) In 1996, I signed a contract with Digital Insight to provide a website for our bank. Our expectations were that this agreement would provide capabilities to our customers to better access their accounts, remembering there were no smartphones at that time, and to do so without having to visit a branch. In fact, one of my desires for this capability was my desire not to have to go into a branch! Business customers loved the website – they reconciled accounts on a daily basis! Did we market this capability? No. Should we have better marketed it? Absolutely!

2) The bank moved its core processing capabilities from an outsourced provider to an in-house system. Once completed, we were drowning with information about our customers. I believe that any financial institution today has the same problems we had in the late 1990s. What do you do with all that information? We utilised the Deluxe CRM to pull information about our customers. It provided us more data upon which we had to determine the best manner in which to utilise the information. A great view with the same marketing challenges. Did it allow us to do anything to enhance marketing to our customers and show better value in using our bank than using any other? No. The variables and information available, paying no heed to their significance, are difficult to use in a small financial institution, use unwarranted in Capex when not using true one-to-one marketing.

3) The biggest change we saw in the late 1990s was the ability to provide call centre and teller availability to customers after normal operating hours. Our bank created both a call centre and a video banking environment allowing such capabilities through real-time associations to the customer information database and habits of our customers. Did we utilise that technology? Did we utilise that capability to grow our customer base and sell additional services? No, and we lost another marketing opportunity.

Looking at the technology available to financial institutions in the late 1990s we see the same, recurring situations today. If we consider the transition from standard debit and credit cards to EMV-enabled (chip and pin) debit and credit cards, you will find neither card issuers (FIs), nor card acceptors (POS/merchants) have seen the one-to-one marketing abilities available to them. My experience and research have seen that very few, if any, banks and credit unions have explained to their card base why EMV is a good idea. Indeed, those to whom I have spoken believe it is a government-driven conspiracy to be able to number its citizens. Others simply don’t see why they now need to spend more time paying for an item they have purchased. Card before cash, cash before card; it's a technology solution to a card brand mandate, but how is it marketed to consumers and customers?

In less than a month, operators of ATMs in the United States will be required to make all ATMs capable of using EMV-enabled debit and credit cards. Consumers, not expecting changes in the use of ATMs, are going to create havoc for operators of ATMs. Look at the challenges faced by big-box marketers and one can only imagine how the ATM market segment will fare. All should be placing inserts into any mailings to their customers; each should be using one of the ATM ‘wait’ screens to notify their customers as to what is going to happen – a change to be sure! More importantly, they should be using this change in technology to reach out to their customers and tie the technology transformation to saleable services, capabilities, and fee-based functionality the financial institution can provide. Is it an easy association? For some, much easier than others; however, marketing, while treading the data flooding into the organisation as a result of technology changes, is essential to survival.

Living our parts in this movie in the late 1990s, the generation of bankers today watches and makes the same mistakes. This time, however, hopefully we can use the change in technology to show consumers and customers how such changes can enhance their interaction with their banking institution. As the CEO of the bank in which I worked recently told me, the “new technology is a bit late, but it’s about time…”