Margaret Franco is Chief Marketing Officer at Finastraa global provider of financial software applications and marketplaces.
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The lines are blurring between the banking and technology industries. Top global banks like Goldman Sachs are starting to position themselves as tech companies in addition to as financial firms. Consumers are likely to consider the convenience and simplicity of the experience a bank provides when they’re choosing an institution—two areas where banks with innovative tech tend to perform well.
Large global financial institutions and community banks alike should anticipate serious disruption from fintechs and big tech companies. All eyes are on Alphabet, Amazon, Apple, Meta and Microsoft. Across the globe, tech companies are starting to dominate the financial space. From the digital wallet capabilities on Tencent’s WeChat to Meta’s aspirations to turn WhatsApp into a “super app,” there are no shortages of examples of the way big tech has become ingrained in individuals’ daily financial behaviors.
In addition to acting as a competitive force in the banking space, big tech companies can also be a source of inspiration for how to quickly build and maintain brand loyalty, trust and market dominance. Financial marketers have a unique window of opportunity to reassess their strategies and borrow from big tech’s marketing playbook. Throughout this article, I will explore three big tech marketing strategies that banks can adopt to compete for consumers’ hearts, minds and wallets.
1. Change the game.
Google is a classic example of a big tech firm that’s not just changing the game, but also actually running the game. Branded as the world’s search engine, Google controls 83% of global search market share. So, what is Google’s secret to maintaining market dominance for more than two decades? I believe it’s that its tech team is always improving search functionality and adding more features to get people the information they need at warp speed. As Google leads, other companies need to catch up and learn the rules as they change. This could mean updating their website’s SEO or tailoring their advertising campaigns to rank higher in targeted search results.
Banks can learn three things from Google’s strategy. First and foremost, be a leader instead of following the pack. Innovate ahead of the competition, whether that’s with higher interest rates on savings accounts or pioneering a better loan application experience. Secondly, establish a highly curated digital footprint that is hyper-targeted and relevant to the end audience. Banks need to be the most relevant to people who are coming to their site, and they can use technology to get there. The third point is that they should be maniacally focused on the end customer’s needs. By focusing on the customer experience first, banks can keep the end customers engaged.
2. Understand—and innovate to meet—changing consumer preferences.
The saying “innovative or die” is used frequently in the technology sector for a very good reason. The pace of change is frenetic. What was new yesterday has quickly become outdated for consumers today. Take Instagram, for instance. When Instagram launched, it changed the game and transformed consumers’ preferences. It sets the standard for a more visual social media experience: one that uses images with short captions rather than text-heavy updates. Over the years, Instagram has had to adapt to keep pace by introducing Instagram Stories and Reels to meet demand for more “real-time,” authentic and short-form video content.
The key takeaway here for financial marketers is that banks also need to stay up to date on how consumers are engaging with brands and interacting with information online. This does not mean that every bank should create a TikTok account. For many banks, TikTok may not have the right tone or be the right venue for interacting with their end audiences. Instead, financial marketers can consider what makes TikTok’s content appealing and which segments of their customers regularly use the platform. With that intel, banks can experiment with short-form video and tailor the types of content they are creating to appeal to specific target demographics.
3. Create brand loyalty in a digital world.
Apple is perhaps the best example of a tech company that has built strong brand loyalty. Each year, consumers reliably camp outside of Apple stores in anticipation of upgrading their iPhone to the latest and greatest new technology. In late 2022, Apple surpassed a new milestone. According to a Counterpoint market intelligence report (via 9To5Mac), more than 50% of US smartphone users had an iPhone in quarter two of 2022. I believe fierce brand loyalty is one of the reasons big tech companies have successfully transitioned into the banking sphere. Because of their perception of Apple products, consumers may also want to add the Apple Card to their collection.
Banks have a long history of building relationships and trust, which has likely earned them many life-long banking customers over the years. Younger generations, however, often have low brand loyalty. In fact, 60% of Gen Z respondents and 63% of millennial respondents would switch financial services organizations for a better mobile app or digital experience, according to a report from the Bank Administration Institute (BAI). The report cites other reasons younger generations would switch banks, including better rates and cash incentives and rewards. With this in mind, the best way to retain a customer is to remain competitive, with strong rates and an optimal digital experience.
Traditional financial institutions—banks, community banks and credit unions—should act fast to maintain brand loyalty in a rapidly digitizing and crowded space. When they’re armed with these brand-building marketing strategies from top tech companies, banks could be in a position to beat tech challengers at their own game.
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