The Future of Banking Is Digital-First
The Future of Banking Is Digital-First
Learn why financial institutions must fully embrace digital engagement tactics to empower and retain the next generation of consumers.
It’s no secret that Generation Z already operates in a mobile-first world. And so does Generation Y.
In fact, according to the Pew Research Center, 97% of Americans now own a cell phone. Of those cell phones, 85% are smartphones—a 50% spike since their first survey on smartphone ownership in 2011. With the ubiquity of smartphones comes a clear call for the banking industry: adapt quickly and embrace a digital-first approach to your marketing efforts.
The Gen Z consumers may not be old enough to remember the death of Blockbuster, the video rental store, but they may have heard of its extinction event: Netflix. A 2020 Forbes article summarizes Blockbuster’s rise and fall: “Blockbuster once owned over 9,000 video-rental stores in the United States. In 2010, Blockbuster filed for bankruptcy with almost $1 billion in debt because it failed to keep up with competitors like Netflix, who created a DVD-by-mail service.”
Banks that don’t jump on the digital-first train soon enough (and effectively enough) may face a fate similar to Blockbuster—now, a cautionary tale. And with FinTechs increasingly offering consumers digital-centric experiences, bank and credit union marketers must ask themselves if they are doing enough to engage current and future consumers digitally in this ever-changing digital landscape.
Mobile Banking Has Arrived
And it is here to stay.
Mobile banking has been on the rise for years thanks to its convenience and the proliferation of the smartphone, and it seems as though the COVID-19 pandemic has only accelerated the trend towards mobile banking.
According to Insider Intelligence’s Mobile Banking Competitive Edge Study, 89% of survey respondents use mobile banking. While 91% of Gen Xers and 79% of Baby Boomers reported seeing the benefits of mobile banking services, the staggering 97% of Millennials using mobile banking makes it obvious how important mobile banking is already to current consumers.
As the next generation of consumers comes up, banks will need to be where those consumers are: online. But just how central is digital engagement to bank and credit union marketing strategies today? Does your financial institution’s marketing strategy line up to this demand for mobile-first experiences?
For mobile banking in 2021, the Insider Intelligence study above concludes: “Security is the foremost factor shaping consumers’ confidence in banks’ digital channels, and is becoming even more advanced with technologies such as biometric authentication, facial recognition, and voice recognition.”
The question for financial marketers to ask themselves here is: Am I doing enough to both engage next gen consumers digitally and equip them to face new and emerging threats online?
Shift Your Financial Marketing Focus
When banking was primarily a brick-and-mortar business, bank marketing strategies followed suite. Primary marketing channels were traditional, from radio and TV to event sponsorships and in-person education.
As the way consumers bank and consume information continues to evolve, so too should your financial marketing strategies. Follow your future consumers and note: the next generation of banking is digital-first.
The consumers of today and tomorrow are digital natives with incredible savvy and high expectations for a seamless digital customer experience. Are there elements of your marketing strategies that are outdated? Are you underinvesting in your digital engagement efforts?
eMarketer’s report on US Digital Ad Spending in 2021 concluded that, “US advertisers increased their spending on digital ads almost 15% in 2020 despite the pandemic—and growth will accelerate this year as digital surpasses two-thirds of the US ad market.“ But in addition to common digital marketing channels like website, email, and social media, digital marketing strategies for banks and credit unions can include a variety of emerging technology tools, and personalization techniques.
One of the most influential and sustainable elements to add to your digital engagement strategy might just be digital financial education.
Digital Financial Education Pays Off
What’s true today is that consumers will judge your bank or credit union by how well your institution rises to meet their demand for digital-first banking. This includes how well and how regularly you engage consumers through financial education and other programs — because a beautiful banking app is useless in the hands of someone who does not return to it to engage regularly.
So how do you engage your consumers digitally without bombarding them with requests? Perhaps digital financial education can help provide something positive to your consumers, while giving your brand a necessary digital touch point.
Not to mention – a well-informed customer today is an uber-engaged customer tomorrow.
In summer of 2020, EVERFI and The Financial Brand surveyed 198 finance marketers and executives about their biggest barriers to acquiring new consumers, the importance of digital engagement, and how they saw their marketing mix shifting through 2021. A resounding 86% of respondents described the ROI on digital financial education and resources as ‘positive’ or ‘very positive. Two-thirds said financial education increased consumers’ use of the bank’s products and services and increased loyalty among existing customers.
Investing in digital financial education can be the key to your digital engagement challenges and can help your institution remain competitive for the next generation of consumers, who are already digital natives. In many ways, digital financial education pays for itself.
Are you ready to meet Gen Y and Gen Z consumers where they need you now?
Zelle® Member Banks have an exclusive opportunity to sponsor financial education for Gen Z high school students with EVERFI. Check out the Money Moves: Modern Banking & Identity Protection™ program to learn more →