Much like an Indiana Jones adventure, marketers in the financial services sector should be prepared for a challenging but rewarding experience. Cope with some booby traps along with a few snakes from other departments and you’ll be well on your way to finding a crystal skull, in the form of a fantastic marketing campaign.
It’s not surprising the financial services sector might be perceived as a buttoned-up, bastion of tradition. But the extra challenges the sector can throw up make it a good environment for the ambitious. “It’s the challenges that make marketing in financial services an exciting space to operate in,” says Julia Dunne, director of B2B marketing at Vocalink.
Despite the industry’s deep roots it’s been the subject of drastic digital change, calling for marketers to bring in the new without throwing out the old. But are marketers in financial services ready to tear up the traditional ways of working in the sector to tackle these 21st-century challenges?
Operating under tight constraints
Creativity, an essential element of marketing, is thought to have no limits, but in the financial sector, in particular, it has to work under tight constraints. “It’s highly regulated in this industry for obvious reasons. Since the financial crash more and more regulation has come in,” says Karen Bigwood, head of brand and marketing at Lloyd’s of London. This has meant marketers like Karen have had to follow more prescriptive processes when it comes to marketing with a greater focus on legal and compliance looming over them.
Rising customer expectations
Many financial services’ customers err on the cautious side, all too aware of the scandals to hit the headlines and tarnish the sector. This is where, as Karen says, a lack of trust and confidence can cause a high hurdle – and customer expectations have risen with this jump.
But Karen doesn’t feel heightened expectations are necessarily a bad thing, by pressurising financial businesses to behave above board. “Transparency has made the consumer more alive to how organisations and businesses in financial services are behaving and how they’re conducting their business.”
However, for many financial businesses, an established history can prove to be a major selling point for this new breed of customer, providing a trusted foundation that many start-ups cannot. Working for a company that was established in a coffee house back in 1688, Karen has seen the benefits first-hand. “When you’ve worked for an institution that has longevity, people are looking for financial strength and security in the organisation. We’ve got a track record of doing that for the past 300 years, so we’ve built up a significant amount of trust and credibility in our brand.”
Julia from Vocalink adds rising customer expectations emphasise just how fundamental knowing your customer really is. This change in the sector is an opportunity to become more attuned to your audience and mould marketing activities accordingly. “Using data analytics tools can help to inform strategies which can personalise the user journey. Many financial institutions focus on acquiring new customers but retention of existing ones is just as important, and offers should also be applied and adapted specifically for this group,” she recommends.
The long winding road of financial service deals
Business in the financial services world is far from a single transaction. The purchasing process will impact parties further along the line, rather than just the immediate negotiator, and despite being B2B, marketers will also have to consider the ultimate message to a consumer. “That for us is always a challenge,” admits Karen.
Julia agrees. “We have to think about the consumer too, so the challenge is to market directly to our customer, the financial institution and indirectly to their customer, the consumer. We have to think about the whole ecosystem,” she explains.
Unfortunately, those within this ecosystem are unlikely to be homogeneous in their views, calling for marketing to create campaigns that can kill two birds with one stone – something that requires a carefully planned balancing act. Karen says they often have to create two variants of content for their clients (who though are all B2B, can hold very different positions within the purchasing journey. “One campaign will be the rules, standard and benefits of why a prospect should operate in the market, versus a campaign talking to a consumer of a B2B policyholder, about the benefits of placing their business in the Lloyd’s market,” Karen examples.
The addition of intermediaries and advisors has also added extra links to the chain. This is something that adds further complexity, and marketers have had to grapple with a bigger pool of prospects to identify those who are the real influencers in the decision-making process.
The new kid on the block
Start-ups in the financial sector elicit the same feeling as when you see 16-year-olds walking into your spot in the pub – they shouldn’t be there. But start-ups add a contrast to the stiff upper lip traditions of financial businesses, usually offering a 21st century-compatible method of doing things. Customers have become more intrigued by the modern-day offerings of new-found businesses in place of those well-known brands. And this threat of becoming stagnant has loomed over more established names, keen to remain as relevant as ever.
“New entrances to the market can capitalise on the traditional weaknesses of the incumbent players such as fees and user experience,” explains Julia. “Challenger banks like Monzo have built a loyal base of customers by treating them more like ‘friends’ than standard customers, and – according to the company – word-of-mouth referrals are the source of 80% of new customer growth.”
The difference is the way start-ups have used digital tools – something the financial sector has been slow on the uptake in comparison with other sectors. But Julia recommends embracing these new approaches rather than fighting against this digitised tide.
“Embracing digital strategies creates a number of opportunities for the retention and acquisition of customers. But the pace of change is difficult for financial marketers to keep up with, and internal processes such as compliance, budget sign-off as well the planning process itself slow things down significantly,” she says.
Karen agrees but adds it can be hard to let go of the tried and tested methods that have benefitted the company for such a long time. “We’ve been operating in a certain way that has stood the test of time for the past 300 years. But we also recognise we have some legacies in terms of systems and processes in the way we do things and given what’s going on around us, we need to look at the way we operate.”
This analysis has surprisingly led Karen and the company to open their doors to the start-ups via a new incubator programme, where Lloyd’s can learn as much from them as they from it. “By working collaboratively and bringing in these firms and start-ups, this can help us crack some of the issues of how we operate and embrace the technology in a way we can still keep modern. We can evolve change while actually bringing with us the things that have built the brand over the past 300 years.”
But the start-ups to brave this section of the B2B market are ambitious. Karen explains the B2B insurance market can be intricate to grasp and this has seen a slower uptake in businesses diving into the sector. Although as new businesses master the art of more straightforward processes, Karen is in no doubt they’ll begin to enter. “The complexity of what we do has sometimes been a barrier to those start-ups, but that isn’t to say that complexity isn’t actually going to be a barrier and I think we’ve been very alive to that.”
Teaching an old dog new tech
Many financial services businesses have been a stable part of the market with stable ideas about how their customers should access and use their services. But as tech integrates more and more into our daily working lives, new companies have pushed their clientele to expect a more 24/7 tech-savvy way of doing business. “Expectations have changed in regards to technology and being able to use the latest technology when interfacing with their financial services provider,” says Karen.
This is where the old dogs really must try to learn new tricks. Established businesses are in a prime position, if they’re willing to adapt to the needs of a 21st-century human, they offer both a modern and reputable service. Even if a newbie offers a modern service they will not have the same reputation a 300-year-old practice would give them. Karen explains: “They expect a pretty slick user experience. But the other thing is, due to the nature of banking and financial services, customers still expect a degree of human interaction. So it’s about getting the balance right.”
Building a modern team in an age-old sector
Appealing to prospects doesn’t just start with your marketing, but the people behind it. The way we market and expect to be marketed to has changed dramatically, even with a slight resistance in FS sector, this means your team need to have an ear to the ground and adapt to what they hear. Karen says this is a predominant reason to focus on looking and learning from other financial organisations and other sectors are doing. “Have you got a team that sits in the future, that can pre-empt some of the new challenges coming down the line and do the day-to-day business that promotes your brand and products?” she asks.
For her and for fellow marketers across any B2B sector one of the biggest challenges can be finding the right people, and once you’ve got them, retaining them. “I think that’s the perennial question that every marketing leader faces in how you attract the top talent, how you get the smartest people in and do you have the right structure,” she says.
Top tips for financial services marketers:
- Be absolutely customer-centric. Listen to the customer’s perspective on your business’ actions to build a more informed viewpoint, which will allow you to talk with confidence and substance.
- Particularly within the financial services sector there will be a big emphasis on money. Ensure your marketing team know the numbers and understand how the organisation makes a profit – this will gain them internal credibility.
