Digital media has had a major impact on the way businesses interact with each other and their clients. Some industries have been able to harness the power of digital more effectively than others, however.
The financial services sector is one that has often been labelled as slow to take advantage of the benefits of digital marketing. While this is perhaps true, it’s worth bearing in mind that ours is an industry that is more heavily regulated than others.
And when you take into account some of the scandals that have rocked certain segments of the industry, from the sub-prime crisis, to Libor rigging, to the mis-selling of payment protection insurance, it’s no surprise that many players have decided to err on the side of caution when it comes to the endless potential of digital marketing.
That may change substantially in the coming year.
A recent study conducted by Econsultancy, which provides research, data, analysis and training to the digital marketing industry, reveals that the financial services sector is heading towards a period of digital transformation.
Compiled from a global survey of more than 200 financial services and insurance executives based mainly in North America and Europe, these are three of the key insights from Econsultancy’s ‘Digital Trends in the Financial Services and Insurance Sector’ report.
63% of responding companies will be increasing their digital marketing budgets this year
Econsultancy’s research suggests that marketers will continue to invest heavily in digital marketing over the next 12 months and beyond. Almost two-thirds of responding companies said that they would be increasing their digital marketing budgets this year, compared with just 6% who said that they would be decreasing their budgets.
According to Econsultancy, those financial services companies that intend to increase their digital marketing budgets will do so by an average of 21% in 2015.
On average, Econsultancy found that financial services companies invest just over a third (35%) of their total marketing budgets on digital-related activities but this increases to 43% for European companies. The average for US respondents is 33%.
33% of respondents say that customer experience is their major focus
A third of Econsultancy’s respondents said that customer experience (known as CX and described by Forbes as “the cumulative impact of multiple touch points over the course of a customer’s interaction with an organisation”) represents the single best opportunity for their company to deliver on their priorities for 2015.
This compares to an average of 22% across all other sectors. With customers more willing to shop around for the best deal and change providers (particularly with bank accounts and credit cards) than they did even five years ago, it’s no surprise that this is a priority for financial services companies. What perhaps does come as a surprise, though, is that while customer experience was stated as a priority for financial services companies, customer retention wasn’t.
Only 40% identify and track mobile-specific key performance indicators
Mobile banking has been an innovation that has caught on extremely quickly, particularly when compared with the slow burn of internet banking. When it comes to tracking customers’ mobile interaction with an organisation, however, financial services are lagging.
According to Econsultancy, financial services companies are more than twice as likely as their counterparts across all sectors to say that they don’t know what proportion of their traffic comes from mobile (12% compared with 5% across all sectors).
Less than half (45%) claim that they understand the nuances of how customers use smartphones and tablets differently.
So while the industry is heading towards a period of digital transformation, it appears that, as a sector, there is still a lot to learn.