Top 10 Bank Marketing Strategy Posts of 2012

I have been publishing Bank Marketing Strategy for only three years, but it has been an exciting (and sometimes challenging) adventure. It has provided me a forum for discussing many of the changes and exciting innovations in retail banking, while allowing me to meet leaders who provide interesting perspectives on an industry I have been working in for more than three decades.

So, which of last year's Bank Marketing Strategy posts were the most read and created the most buzz? The top posts definitely covered a wide spectrum of topics, but also may have helped Bank Marketing Strategy be recognized as one of the top 5 financial industry blogs by The Financial Brand.

Banks and Credit Union Marketers Taking Different Paths in 2012 

A follow-up to the fourth most read article of 2012, this blog post provided details into the differences between bank and credit union marketers as noted in the 2012 Bank and Credit Union Financial Marketing Survey conducted by The Financial Brand and myself early last year.

The post discussed how, while both banks and credit unions were anticipating constrained budgets in 2012, that was where the similarities ended. Not only were banks expecting to be dealing with trust and compliance issues for much of the year, they were going to be focusing on different products and services in their promotional efforts.

10 Resolutions Bank Marketers Can't Ignore in 2012

In 2012, I invited industry leaders to provide their perspective on what goals bank marketers should focus on during the upcoming year. Much like personal resolutions, it was universally expected that many of the resolutions may not be met, but the aspirations of hopefully making progress on these ambitious goals were discussed.

Last year, the goals for marketers focused on challenges such as measurement of results, channel integration, enhancing the customer experience, big data, leveraging social media, innovation and building both a customer and bank value strategy. Interestingly, possibly because of the scope of these resolutions, the most discussed bank marketer resolution for 2013 ended up being to have greater focus on a narrower set of goals.

Big Data Provides Big Opportunity for Bank Loyalty

To get a perspective on the challenges and opportunities available to banks in the area of rewards and loyalty, I reached out to the leaders of four companies that were currently leveraging structured and unstructured data to provide unique solutions to the banking industry. These leaders were also co-panelists with me at the 2012 BAI Payments Connect Conference.

This roundtable interview provided great insight into ways that banks and credit unions could take advantage of the 'loyalty trifecta' of bringing together payment and transactional insight, targeted communication and offers as well as mobile functionality. Interestingly, a year later, few organizations have cashed in on this opportunity.

The State of Bank and Credit Union Marketing in 2012

As mentioned above, I partnered with Jeffry Pilcher from The Financial Brand at the beginning of last year to develop the 2012 Bank and Credit Union Financial Marketing Survey. This allowed both of us to better understand the challenges and opportunities of marketers in the banking and credit unions industries

This post provided an initial overview of the results from over 300 financial marketing professionals at organizations of all sizes. (the highest rated post provided credit union and bank break-outs). The primary challenges facing institutions last year continue today and include the need for better measurement of results, the importance of expanding share of wallet and optimizing the media mix for improved effectiveness and efficiency.

Are Bankers Ready For The Bank 3.0 Reality?

Before Brett King's newest book, Bank 3.0 was even released, I was lucky enough to get an interview with the visionary and founder of Movenbank who had previously written Bank 2.0 and Branch Today, Gone Tomorrow. During the interview, he discussed the challenges traditional banks are having as they try to transform themselves for the consumer who places a higher value on time than locational convenience.

The interview also dug into how Brett envisioned the payments competitive landscape transforming and how he believed social media and banking may integrate in the future. In early 2013, I am looking forward to another interview with King as Movenbank goes live as a digital bank.

Five Banking Megatrends Impacting Consumers

In November of last year, I had the opportunity to be interviewed by Bankrate.com regarding what I saw to be the biggest changes in the banking industry that are impacting consumers. This post provided the transcript to the discussion, highlighting the changes in mobile and online banking functionality, how branches will begin to be reconfigured or go away entirely,  and how mobile wallets may eventually replace our leather versions.

I further discussed how many banks are significantly changing the way consumers may interact with their banking accounts and how prepaid cards are becoming a viable alternative to traditional checking accounts.

Banks Transforming Branches to Improve Efficiencies

Discussing a topic that I will definitely be covering again in early 2013, this September post delved into the impact that the confluence of financial and customer behavioral changes was having on bankings' branching network strategies. This was also a major theme in the interview with Brett King in the #5 post in 2012 as well.

Referencing recent research reports from Fitch Ratings and Infosys as well as articles in various trade journals, this post discussed how banks are looking at alternatives to traditional branches to serve customers more efficiently. The post also discussed the potential of shrinking branch networks and new technology that will enable alternative financial product delivery options.

Will PFM 'Tricks' Be A Customer Experience Treat?

With a headline playing off a Halloween theme on October 31, this post provided an analysis of how personal financial management tools are being used by consumers and delivered by third party providers. Referencing a 2012 study by The Federal Reserve, as well as research from Aite Group, Javelin Strategy and Research and Celent and a blog post from Ron Shevlin, this article also discussed the potential (or lack thereof) for PFM growth.

Finally, I was able to review one of the more innovative PFM products available to banks recently introduced by the team at Finovate 2012 winner, MoneyDesktop. This tool, with both online and mobile user interfaces, is a way for banks to quickly offer dynamic PFM services to their customers.

Banks Including Retargeting as Part of Marketing Strategy

As banks expand their digital marketing strategies to optimize marketing spend and effectiveness, retargeting has become more commonplace. A strategy that captures customer insight as they move around the web, either shopping for financial products or simply just visiting a bank site, this tactic allows bankers to 'reconnect' with the same consumers later, providing offers that may generate new business.

Including an interview with Lloyd Lee from New Control and research from both ComScore and BizRate Insights, this post dug deeply into both the benefits of retargeting and the methods used for best results.

Monetizing Mobile Banking

The tenth most popular post in 2012 was developed after a presentation and interview done with Matt Wilcox, SVP from Zions Bancorporation in conjunction with Drew Sievers, CEO of mFoundry at last year's BAI Retail Delivery Conference in Washington, DC.

The post highlighted many of the ways banks can now expand their view of mobile banking as a cost containment channel (which it may not be) to include several revenue opportunities that can be integrated within the service. Through partnerships with third party providers, the article describes how the mobile channel could provide a 'revenue annuity' at a time when fee and interchange income is being squeezed.

So there's the top ten Bank Marketing Strategy blog posts from 2012.

I hope to continue to cover a wide variety of topics in 2013 that are of interest to my readers. If there is any subject you are especially interested in, let me know. It is always fun to research the unknown and uncover ideas and strategies that can make us all more successful.

Here's to a prosperous and exciting new year.

Today's Mobile Banking Apps: Table Stakes or Cutting Edge

There is no disputing that the U.S. mobile banking landscape is changing rapidly. Larger banks are setting the stage for broader market trends, while smaller banks (and even some regional players) play catch up in the development of new functionality.

What are some of the top U.S. banks doing that is innovative and what has quickly become table stakes in a game of mobile app one-upsmanship? And is mobile banking innovation becoming a value-added differentiator that can drive new revenues?

Over the past 18 months, mobile banking applications have evolved beyond the basics to include specialized functionalities, improved user experiences and an expansion of platforms supported. A year ago, mobile remote deposit capture (RDC) was live at only five of the top 13 banks. Today, it is a 'must have' banking application that has the potential to drive revenue. Similarly, P2P is now taking center stage at most banks despite some logistical hurdles, with five banks adding this functionality in the past 12 months.

How are banks keeping up with consumer demands? How are they keeping up with each other? What's next? In the third report in a series on the state of mobile banking released by the financial research and consulting firm Celent, a review of new application development is provided along with a glimpse into the future. 

In the 44-page report, The U.S. Mobile App Landscape: An Annual Evaluation of Mobile Banking at Top U.S. Banks, Celent found that larger banks tend to out-develop and out-adopt smaller institutions by a significant margin. “The channel is still relatively new, but leaders in the digital channel space are beginning to take offerings into the realm of value-added services that are context-sensitive, timely, and utilize big data", says Dan Latimore, senior vice president of Celent's Banking Group and coauthor of the report. "There’s a large disparity among digital offerings—industry leaders are light-years ahead of the laggards.”

Below is Celent's view of the mobile landscape as it continues to evolve. As can be seen, Emerging Capabilities include a more advanced stage of interaction with more knowledge-driven tools and analytics. While some of these may not be pursued by every organization, Celent believes most will be tomorrow's standard. Interestingly, some of the functionality in the Future Focus is already being implemented on a global basis (see previous post 'Banks Accelerate Mobile Banking Innovation', June 2013). 

While the future may be considered speculative, some components are beginning to appear at the more progressive institutions (U.S. Bank and BBVA Photo Bill Pay) and at some of the new players such as Moven, Simple, GoBank and BlueBird (see 'Challenger Brands & Disruptive Ideas: Learning From The NeoBanks', Financial Brand, August 2013).

Current Evolution of Mobile (Celent, June 2013)

Key Findings of the report include:

• Mobile, and more broadly digital channels, have become core parts of banking in 2013. Mobile devices are now just as much a tool to keep people out of branches as they are to facilitate interaction. Consumers are more eager to engage through a smartphone, and as nontraditional players rush in to fill gaps left by legacy financial institutions, CIOs are beginning to feel the pressure to build out digital capabilities.
• Digital channels are in a continuous process of evolution, proliferation, and adaption. While remote deposit capture was 'new' a year ago, it is now a basic functionality. Innovation in the mobile channels is ongoing with today's innovations quickly becoming tomorrow's table stakes. 
• Banks are moving forward in their evolution of digital channels, but it's a slow and sometimes confusing process. It’s no surprise that banks aren’t considered innovators: it’s difficult, expensive, and risky to innovate. Yet, banking is entering a time of customer-centricity, where each institution defines this concept differently.
• New functionality is on the horizon, but not yet front and center. This includes: 1) Speech recognition, 2) Social media integration, 3) Mobile PFM tools, 4) Easy access account balance, 5) Cardless cash withdrawal, 6) Debit card on/off switch, 7) Remote mobile bill pay, and 8) Biometric security.

How Are The Top Banks Doing?

Mobile is definitely moving beyond the replication of online banking services and into value-added features built to serve more specific use cases and even different segments of the bank (retail consumer, small business, wealth management, commercial, etc.). As shown above, the evolution is trending towards an environment where solutions are being 'bought' vs. 'built' and where engagement of the customer on a contextual level is beginning to be achieved. 

Using a features and functionality scoring sheet for each mobile platform (developed as part of the previous Celent research 'What's App, Doc: A Biannual Evaluation of Mobile Banking at Top U.S. Banks'), Celent evaluated apps for the Apple iOS, Android, Safari web browser and text banking. Scores were compiled for the top 13 banks in the U.S., with banks grouped into three categories based on the following criteria:

• How easy was it to find the desired function?
• How easy was the app to use?
• Was the information presented intuitive from a navigation perspective?
• Did the app take advantage of standard OS functionality to enhance familiarity?

A very in-depth evaluation was performed for the following functions on each mobile platform to determine breadth of offering. Each function was evaluated on a number of levels with values placed on each of the following capabilities: 

• Balance inquiry
• Recap of previous transactions
• Bill payments
• Moving money (RDC, A2A, P2P, etc.)
• Merchant-funded rewards
• PFM tools
• Social Media integration
• Geolocational tools
• Marketing and sales
• Security
• Customer support
• Personalization
• Alerts

Celent grouped the banks in this report into the following three categories: most improved, noticeable improvements, and minimal/ no changes.

1. The most improved apps include Bank of America and US Bank.
2. Apps with noticeable improvements are Capital One, Wells Fargo, and HSBC.
3. Banks with minimal or no changes to their mobile offerings include BB&T, Chase, Citibank, Fifth Third, PNC, Regions Bank, SunTrust and TD Bank.

According to Dan Latimore, "While Chase continues to build on their mobile excellence, some apps have been playing catch up." And while not making significant changes does not necessarily mean the mobile banking site was poor, standing still in today's mobile marketplace is not a solid long-term strategy.

Interestingly, in an unrelated research study conducted by Xtreme Labs for the period May 18 - June 1, 2013, entitled 'U.S. Banking Apps Report: Customer Reviews', a different set of 'winners' emerged based simply on the number of positive and negative customer ratings in both the Apple iTunes Store and Android Play Store. A minimum number of reviews were required for any app and an averaging of reviews was used for scaling. While significantly less scientific than the Celent research, the Xtreme Labs research provides a social media commentary on customer sentiment around mobile banking apps.

Of the largest banks reviewed by Xtreme Labs, RBS Citizens, had the highest score on the iOS platform (4.5 out of 5 and a 93% favorability rating) and one of the best scores on the Android platform (4.5 out of 5 and a 97% favorability rating). USAA, American Express, Wells, TD Bank, Chase, BB&T and Regions and U.S. Bank also scored well in this study.

Conversely, PNC (not virtual wallet), SunTrust, TD Bank, Fifth Third, Bank of America, Well Fargo and USAA also appeared on the negative side for the iOS platform in the Xtreme Lab study, indicating that the mobile apps were not considered the best for everyone.

Issues to Address in Future

Beyond the need to explore the development of additional functionality that makes engagement easier and leverages big data more effectively, Celent saw some trends they believed warrant attention in the near term.

Marketing and Cross-Selling

As was noted in my June 2013 blog post around Mapa Research's study of global mobile banking innovation, U.S. mobile banking apps still haven't leveraged some of the power of cross-selling from a mobile device. While the Celent research noted that many banks have attempted some form of 'product pushing' or advertising of services, there seems to be minimal leveraging of big data insights to drive contextual offers. "Splash screens and real estate crowding banner ads should be left to online banking", say Latimore. "Apps should move toward offering up product suggestions (without sacrificing user experience) as well as being able to facilitate the beginning of an enrollment process, which can be finished at the branch, over the phone or online".

Mapping

While it is understandable that many banks may be a bit skittish around using Apple Maps for branch and/or ATM directions given early flaws with the iOS application, using Google Maps from within the Safari browser was found to be slow and 'clunky' compared to the integrated option from Apple. Celent believes the risk may be worth it. Another option (used by both PNC Bank and U.S. Bank) may be the use of augmented reality for locational guides.

App Design and Platform Changes

Celent noticed that a number of apps in the study had little or no change from the previous report from Q4 2012. While this may not seem out of the ordinary if compared to bank website redesigns, and certainly falls in line with the industry's normal 'wait and see' approach, this speed of change is not acceptable to most mobile users who are used to constant and frequent enhancements to apps.

In addition, as tablets of all forms have exploded onto the marketplace, banks have done a terrible job of developing applications that take advantage of this very unique platform. Beyond the tactile and length of engagement differentiation of this platform, the demographics of the typical user (more affluent and more digitally astute) warrants a greater focus.

PFM on Mobile

There is no disputing that PFM on mobile has yet to gain any traction. Banks are struggling to define what PFM should be and what it should look like on different channels as well as platforms. The majority of consumers are not attracted to charts and graphs on mobile devices (there is a segment however). But PFM on mobile may provide promise if looked at in the perspective of improved receipts, budget updates and even gamification. Merchant-funded reward integration is also possible with geolocational capabilities providing the ability for immediate rewards through the mobile device.

While some banks are testing some of these capabilities (most notably the neobanks like Moven as covered here in my early 2013 blog post), there is quite a bit of debate on whether the investment in development can be recouped without a value-added pricing model.

According to Latimore, "Eventually, Celent imagines high-value advice on savings, alerts for overspending on a budget category, or GPS-enabled deals. The camera is another unique attribute to the mobile phone that can be used to provide a snapshot of spending."

The Long Road Ahead

Mobile banking has quickly evolved from being a more cost effective way to handle balance inquiries to a core component of every bank's delivery network. We have moved from a transaction focus to an engagement focus, with CIOs beginning to feel the pressure to build out mobile capabilities. 

With basic mobile transactions such as balance inquiry and moving money, simplicity is the 'new black'. With more sophisticated interactions, the use of 'big data' for insight dissemination and solution recommendations is the key to success. In all cases, Celent found a trend away from 'bolt-on modules' to more holistic approaches that will require significant investment.

While other industries have reached young adulthood in mobile integration, mobile banking is still in its infancy. With shrinking margins and more regulatory pressure, banks must determine if there is the potential for mobile services to generate revenue that can help offset development costs and replace lost fee income. Without fees from new value added services, what is the ROI of mobile banking? (see previous BMS post, 'The Revenue Power of Emerging Financial Solutions", August 2013)

According to Celent's Dan Latimore, "While mobile banking definitely expands a bank's ability to reach new and existing customers, and while there is significant movement by some organizations, there is still a long road ahead for others."

About the Report

The report reviewed is the third in Celent’s series on the state of mobile banking at top US financial institutions. The report examines mobile application offerings at the top 13 US banks in significant detail, beginning by looking at the state of the mobile market in the US. Celent graphically explains trends in mobile, and tries to make a case for what the future of mobile will look like. The report then dives deeply into the breadth of functionality and usability at each of these banks. Finally, each bank’s mobile application is profiled in depth, with accompanying screen shots to illustrate relevant points. This report is the best of its kind and is intended to serve as a guideline for conversations around how to strategically align mobile development with prevailing best practices.

A webinar on this study in conjunction with Kony, entitled, Tomorrow's Mobile Banking - Hear What Top U.S. Banks are Doing to Get a Glimpse Into the Crystal Ball is scheduled for September 11, 2013 at 2PM ET. 

Additional Resources

The U.S. Mobile App Landscape: An Annual Evaluation of Mobile Banking at Top U.S. Banks - Celent (June 2013)

Mobile Banker Vendor Solutions - Celent (April 2013)

What's App, Doc: An Updated Biannual Evaluation of Mobile Banking at Top U.S. Banks - Celent (January 2013)

U.S. Banking Apps Report: Customer Reviews - Xtreme Labs (July 2013)

Tomorrow's Mobile Banking - Hear What Top U.S. Banks are Doing to Get a Glimpse Into the Crystal Ball - American Banker Webinar sponsored by Kony (September 11, 2013)

Mobile in 2013: A Digital Digest Featuring Gartner Research - Kony (March 2013)

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Lipstick on the PFM Pig?

In an industry that is sometimes slow to innovate, Personal Financial Management (PFM) is one of the few banking applications where innovation has outpaced consumer demand. A 'hot' topic for over a decade, the ability to help consumers better manage their money through applied analytics, contextual design and visual tools has provided a battleground for financial institutions and direct-to-consumer applications.

With a quest to be at the center of account holder's lives, developers of PFM applications are moving from add-on applications to integrated solutions that can help define lifestyle segments. At the same time, the definition of PFM has evolved to include everything from basic visualizations to advanced engagement tools.

The question remains however . . . will these innovations capture the consumer's attention or simply be lipstick on the PFM pig?

In the newest in their PFM Insight Series entitled, Designing PFM Tools With The Customer in Mind, Mapa Research investigates the latest and most innovative PFM developments from around the world. Featuring in-depth quantitative and qualitative research from 60 banks, with examples from 23 banks and interviews from leading providers, the study hopes to provide guidance for banks and credit unions trying to decide if a business case for PFM can be made and if so, what should be the focus of development?

Building on the findings of the second edition report from Mapa Research entitled, Is PFM Still Worth Considering, the newest research found the following themes emerge:

• Customer centricity is as relevent as ever: A number of banks have integrated PFM within the overall digital experience, delivering added value through intuitive functionality.
• Leveraging new technology for cross-channel integration: While there are still only a few examples of exceptional integration across the online, tablet and mobile channels, more seamless tablet and mobile experiences are evident. Visuals have been improved, with more interactive tools including some available pre-login.
• Development and innovation must continue: For those banks and credit unions committed to PFM, more must be done to provide real time and even future views that help customers understand finances and improve their overall financial performance.

PFM offerings have expanded and have the potential to become increasingly important as a financial literacy tool, account aggregator, financial performance tool and in some cases, a non-interest income opportunity for banks and credit unions. 

Acceptance of PFM

You'd think that with the rapid adoption of smartphone and tablet technology, people would quickly embrace digital money management. Especially given the fact that spending on the development of PFM tools is expected to double between 2010 and 2015, according to CEB research.

Nothing could be further from the truth according to recent research from Aite Group, Javelin Strategy and Research, Celent and Forrester. The challenge for banks and credit unions is that, in reality, most customers do not proactively monitor or manage their finances, and few look to their bank for support.

According to Ron Shevlin, senior analyst at Aite Group, "Almost half of Americans say they don't look to their primary financial institution for help managing their finances and therefore don't care if the FI offers tools to help them do so. In fact, 80 percent of households don't even do budgeting."

According to a September survey conducted by Aite Group, 58 percent of U.S. consumers have not used online PFM tools and don't plan to. Another 14 percent said they planned to do so, with 15 percent saying they use PFM tools exclusively at their bank or credit union site. The rest said they use a non-financial institution site or multiple sites. A Celent research report was even more dismal, with only 4 percent of online banking customers being active PFM users.

Interestingly, the percentage of users by age category in the Aite Group study skewed towards younger consumers, with 44 percent of PFM users coming from the Gen Y segment, 28 percent from Gen X, 16 percent being Baby Boomers and 15 percent being seniors. This may indicate the take-up of mobile tools is exceeding online PFM applications.

All of the recent studies point to the importance of integration of tools within current banking applications, ease of use, social media engagement, better mobile and tablet applications, and potentially rewards integration. If done well, PFM has been proven to be a gateway to deeper and more profitable relationships. The key, according to most studies, is to prove the value to the customer first and the value to the bank will follow.

"If you're looking to improve the relationship with the 80 percent (or more) of the households not fully engaged with PFM tools, you've got to rethink the definition of PFM and what's going to be offered," says Shevlin. As Shevlin wrote in a September 2012 Snarketing 2.0 blog post entitled, 'PFM is Dead, Long Live FPM', PFM should become FPM (Financial Performance Management), moving from 'oversight' (budgeting and expense) to 'insight' (how is money performing) and ultimately to 'foresight' (how can performance be improved).

Even then, a  broad-based PFM (or FPM) may fall short according to JJ Hornblass, publisher of the Bank Innovation blog. "The problem is the lack of data, and the inability to tell a financial story beyond just one financial institution", says Hornblass. "PFM must tell the full data story. Until it does, only 27 percent of American consumers will find it "useful".

PFM Evolution

So, how are financial institutions and PFM vendors moving beyond the first generation of PFM offerings to be more valuable to the consumer and a better business case for the financial institution? How is PFM moving beyond 'slap on tools' to being integrated within products themselves? How is PFM being redefined to include benefits that the consumer will embrace?

According to the new findings from Mapa Research (executive summary of report available here), PFM offerings have become more diverse and that the redefinition (or breaking apart) of PFM components allows for a categorization of PFM functionality into three levels of progression as shown below:

• Basic Visualizations (Entice): Real-time feedback in relation to day-to-day finances including visualization of balances, transactions, etc.
• Analysis (Educate): How does customer spend/save relative to peers, categories, merchant, geolocation and holistic view of finances.
• Engagement Tools (Activate): Engaging tools to help customer improve financial situation through intelligent budgeting, goal development, forward-looking assessments.

With the progression above, the analysis of PFM functionality within this report illustrates a financial institution and vendor focus on improved simplicity, greater customer centricity and less 'friction' (seamless integration) between channels. In addition, greater attention to personalization and alert functionality was evident.

The current state-of-play was developed by reviewing 48 retail banks offering PFM tools across 10 countries. As can be seen, there continues to be opportunity to expand PFM capabilities across devices, with only 21 percent of banks surveyed offering PFM across all three channels.

Source: Mapa Research (PFM Insight Series Edition #3; Designing PFM Tools With The Customer in Mind)

Basic Visualizations

While basic visualizations are taking on many forms globally, there are some unique ways to illustrate basic balance and transaction insight, such as with BNP Paribas, where customers get an indication of their account status with weather visuals (sunny, cloudy or thunderstorm depending on account balance). 

A number of banks, such as PNC, Capital One and Barclays Bank, use bar charts to indicate balances in different categories (spend, save, credit available, etc.) while some vendors, such as MoneyDesktop leverage bubbles to illustrate basic insights.

Capital One (UK)

Analysis

Similar to the analysis reports offered by investment firms for years, retail banking PFM analysis tools provide a rather extensive review of financial wellbeing using strong visuals and optional widgets for different types of information (inflows, outflows, goals, budgets, etc.). In most cases, the widget options are prominently displays so a customer can customize their financial analysis.

Because of the extensiveness of the information available for analysis, only a few institutions globally have a smartphone app for in-depth analysis. This insight usually is across the online and, on occasion, tablet platforms. Danske Bank was considered to be one of the best cross-platform applications for analysis, allowing customers to easily view money coming in or going out by category across all platforms.

Another example of an excellent analysis PFM application found by Mapa was at BNP Paribas, where great iPhone and iPad visuals are used to provide simple analysis capabilities that are easy to comprehend (even if you don't understand French).

BNP Paribas (FR)

Enabling customers to compare spend and allocation with peers is a way that could eventually improve a person's finances by seeing how they are doing compared with others like them. In Mapa research, examining 48 leading retail banks across 10 countries, four banks of the five banks globally (all Dutch) enable customers to compare spending with peers (and only within internet banking). OCBC (SG) is now providing this feature as an iPad application.

Take Action

The most frequently used technique for banks to encourage 'action' is by setting saving goals. It was found that not only was this functionality easy to set up and grasp by the customer, but it could be applied across all platforms relatively easily. In some cases, the sharing of savings goals could be done across social channels like Facebook, even enabling the customer to ask friends for contributions toward a goal.

In some cases, such as with Simple, a customer can divert funds from a goal to make the desired purchase, increasing the engagement and functionality of the 'goals' PFM tool.

One of the more unique capabilities within the 'action' category was ING's tool that allows customers to see how much could be saved over time by making small sacrifices. For instance, by using certain assumptions, a customer can see the impact of forgoing a cup of coffee, packing a lunch, walking to work, etc. With a simple click, the customer can redirect an amount they would have usually spent on an item to their savings account.

According to ING research, 52 percent of Canadians said that they could change their spending habits if they could visualize the impact of sacrificing non-essential purchases.

ING 'Small Sacrifices' PFM Tool

Dozens of illustrations from leading banks across the globe are available in the very extensive 56 page report on PFM developed by Mapa Research. The report includes commentary as well as vendor interviews around the future of PFM.

Increasing PFM Engagement

As mentioned, getting customers to use the new tools that have been developed and are continuing to be innovated remains a challenge. Each of the PFM vendors interviewed for the Mapa report (Yodlee, Figlo, Meniga, Strands Finance) and subsequent to the publishing of this report (MoneyDesktop and Geezeo) emphasized their commitment to greater enrollment and engagement (beyond trying to get banks and credit unions to offer PFM services).

Innovative approaches used to improve use and engagement of PFM tools by Mapa Research included:

• Seamless integration within regular banking services: Optional PFM add-ons will not be embraced by a populace that doesn't like budgeting. Instead, functionality should be part of the digital experience.
• Intuitive and pleasing visuals: To appeal to a broad customer base, the PFM tools should be easy to understand and highly visual.
• Segmentation of base: Instead of a one-size-fits-all approach, PFM features should be aligned with different segments of the customer base (mass, affluent, Gen X, Gen Y, investors, etc.)
• Make it social: Allow users to engage with others through social platforms. It was found that this was effective when building and sticking to goals even though the integration of social channels and banking is by no means commonplace in the U.S.
• Provide encouragement: People respond to ongoing encouragement and instant feedback. Moven is a great example of a bank that provides this form of engagement.
• Leverage Big Data: As mentioned by JJ Hornblass as well as reports from Cap Gemini and others, data must be leveraged more effectively to combine overall financial relationships, better understand customer needs and build engagement.

Moven Immediate Feedback to Generate Engagement and Encouragement

PFM Vendor Perspectives

To better understand recent and future developments in the PFM category, Mapa Research interviewed four PFM vendors in the development of the report (Figlo, Meniga, Strands Finance and Yodlee). In addition, I supplemented these interviews by allowing two additional vendors (Geezeo and MoneyDesktop) to provide insights to the same questions advanced by Mapa Research. A full copy of the questions and responses from Mapa are available in the appendix of the report.

Recent Developments

All six vendors questioned indicated a very similar emphasis around where current efforts are focused. The key areas of development included:

• Tighter integration of PFM functionality within current banking functions
• Focus on mobile and tablet platforms
• Better use of data for budgets
• More financial analysis and forecasting
• Ability for improved aggregation and categorization
• Better goal and advice functionality (including buy/no buy decisioning tools)
• Increased segmentation and customization (including small business)
• Better marketing capabilities within offering
• Alert functionality

Common Objection From Banks Around Implementing PFM

The PFM vendors were asked what banks view as the primary stumbling block to the implementation of a PFM solution.

• Lack of internal resources to implement and deliver a PFM solution
• Lack of proven demand, ROI and business case support
• Internal development of primary PFM functionality
• Internal data issues (inability to consolidate customer information)

How Can Customer Adoption Rates Be Improved

Each vendor in the survey as well as the two additional vendors I interviewed agreed with many of the ways that can improve customer adoption and engagement.

• Improved training of the front line
• Proactive marketing of the service through direct and digital channels
• Online videos illustrating benefits and use
• Simplify and improve UX/UI all components of PFM for the customer
• Move beyond online platform to mobile and tablet
• Target potential user groups

Evolution of PFM Over Next 12 Months

The vendors were asked how PFM will evolve and how consumers will/or won't embrace PFM in the future.

• Better cross-channel integration
• Better data integration
• Better insight and analytics moving towards 'tool of empowerment'
• Continuous enhancement of user experience (simplicity)
• Segment-based PFM (small business, wealth management)
• Potential as fee-based service

Lipstick on the PFM Pig or a Brand New Pig?

After years of simply trying to take an overarching money management concept and add more and more functionality (PFM lipstick), it appears that the PFM marketplace is beginning to take specific components of personal financial management apart and integrate the tools within the banking services. In other words, instead of focusing on putting PFM on steroids, banks, credit unions and vendors are finding ways to bring the benefits of money management within the platforms and accounts in a more simplified manner.

More importantly, PFM is becoming part of what banking is in real time. And instead of being only a rearview mirror view of finances, tomorrow's PFM will look ahead with advice as to how to prepare for the future and provide 'foresight' for a stronger financial well being.

It appears that the biggest change around the definition of PFM is that bigger may not be better after all. Instead, the original concept of PFM is being broken down into easier to swallow pieces of insight that are more desired and more valuable to the consumer and the bank. 

Maybe we have moved from putting lipstick on the PFM pig to serving delicious pieces of PFM bacon, sausage, pork chops, etc. The question may now become . . . will the consumer pay for these new treats?

Additional Insight

PFM Insight Series Edition #3; Designing PFM Tools With The Customer in Mind - Mapa Research (August 2013)

PFM Insight Series Edition #2: Is PFM Still Worth Considering - Mapa Research (June 2012)

The Business Case for Personal Financial Management - Forrester Research (Sept. 2012)

Strategies for PFM Success - Aite Group (Sept. 2012)

PFM is Dead, Long Live FPM - Snarketing 2.0 (September 2012)

Personal Financial Management (PFM) 4.0 - Online Banking Report (June 2012)

Personal Financial Management 2011 - Javelin Strategy and Research (December 2011)

Personal Financial Management: Five Things FIs Need to Do in 2011 - Yodlee & Javelin Strategy and Research (January 2011)

Personal Financial Management: The Devil is in the Details - Celent Research (August 2011)

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Top 10 Retail Banking Strategy Posts of 2013

It has been an another amazing year for Bank Marketing Strategy in 2013. The blog was named a top financial industry blog for the second straight year by The Financial Brand and bank and credit union industry followers viewed articles more than 600,000 times during the year.

But which of my 72 posts in 2013 were the most popular? Based on readership, it looks like posts dealing with banking strategies, mobile banking, new competition, and distribution topped the list over the past twelve months. Readers also read my crowdsourcing posts in record number, where dozens of global industry leaders contributed their insights.

Below are this year's top 10 articles with links to each post.

Banking Leaders Predict Major 2013 Trends

Not surprisingly, the most read post during the past year was also one of the first posts of the year, where more than 50 financial industry leaders provided their insights and predictions for what they believed would occur during 2013.

Predictions included thoughts on payments, big data, delivery channels, marketing technology, product and segmentation opportunities, competition and compliance. Many of the contributions were spot on, while some were ahead of their time.

Interestingly, the 2014 Top 10 Retail Banking Trends and Prediction post published last week also is also a top 10 article for 2013.

Moven: From Mobile Banking to Mobile Money

Curiosity about new financial industry players like Moven, Simple, GoBank and new product introductions like Bluebird from American Express continued to generate a large number of readers in 2013.

While these mobile-first banks may have been ahead of their times a couple years ago, much of their vision of simplicity, an improved user experience and integrated personal financial management tools are quickly becoming table stakes in the battle for the mobile banking customer. This post illustrated how Moven continues to be one of the leaders in being able to leverage the power of the smartphone as a payment device with the ability to provide immediate feedback with every spending decision.

Banking Leaders Discuss 2014 Strategic Planning Priorities

To assist with bank and credit union strategic planning processes, I enlisted the help of more than 30 banking leaders from across the globe in July to provide thoughts on the priorities that should be considered in the upcoming year.

Despite responses coming from disparate locals, the recommendations were surprisingly consistent, with a focus on enhancing the customer experience, better defining mobile positioning, integrating delivery channels, reducing enterprise costs, leveraging data, improving sales and marketing effectiveness, defining a differentiation strategy and continuing to focus on revenue, security and compliance.

9 Ways Marketing Can Help Acquire New Mobile Banking Customers

Many bank and credit union executives realized that just because you build a mobile banking application doesn't mean customers will automatically enroll for and use mobile banking . . . especially beyond balance inquiries. 

This post discussed how marketing can greatly improve the adoption rate of mobile banking by actively marketing the service using all of the communication channels available.

From ATM receipts to online banking banners and social media, this post provided real world examples of how banks across the country are promoting the mobile banking channel.

Top 10 Retail Banking Trends and Predictions for 2014

Despite only being published 15 days before the end of the year, this crowdsourcing post quickly became one of the most read posts of 2013 by followers of the bank and credit union industries. 

Sharing the insights of more than 60 bankers, credit union executives, financial industry analysts, bloggers and advisors, this post provides the foundation for both planning and implementing plans in 2014.

From the overarching 'drive-to-digital' and disruption of the payments world to the breaking down of internal silos and rethinking delivery networks, there will be extensive change in the coming year.

Building a Winning Mobile Banking Strategy

No area of banking was more active than the development and improvement of the mobile channel in 2013. That is probably the primary reason this post on how to develop a mobile banking strategy was so popular.

This post included a discussion of some of the great work Forrester Research has done in the development of a Mobile Banking Strategy Playbook and referenced their Global Mobile Banking Functionality Rankings as a foundation for looking at what some of the best in the industry are doing.

This post also complimented a later 'best in mobile' post entitled, My Digital Banking Nirvana. 

From Passbook to Mobile: The Evolution of the Bank Account

Of the many excellent guest posts done for Bank Marketing Strategy, the discussion of the evolution of the traditional bank account by Brett King was the most read during 2013. 

Reinforcing the underlying theme of his best selling book, Bank 3.0, this post set the stage for the many changes that occurred in the mobile banking space in 2013 including the introduction of King's mobile-first bank, Moven.

While we may not see a branchless future for some time, it's clear we're headed for a less branch future.

5 Bank Marketing Strategy 'Quick Wins'

Another very highly read post from January of 2013 was a post that discussed some of the can't-miss strategies I have seen work across the country at banks and credit unions of all sizes. Possibly airing some of my frustrations around why organizations expend energy on difficult and risky initiatives when much easier and financially beneficial strategies get little attention, this post provided ideas that could get the year started on a positive note.

Keys to winning through new mover acquisition, digital retargeting, new customer onboarding, cross-selling using triggers and the collection of insight for improved customer communication were all highly suggested as a way to increase revenues and reduce costs.

Will The Power of Mobile Make Bank Branches Disappear?

There was a lot of discussion throughout 2013 as to whether the mobile channel will replace traditional branches in the foreseeable future. This February post dug into a Bain & Company report that found that a strong mobile banking application could improve the likelihood of a positive customer referral of the bank or credit union.

The research also found that customers that used mobile banking were less likely to go to a traditional branch as often and that development of 'premium' mobile banking apps have a positive impact on the acquisition and retention of mass affluent and affluent customers.

Migrating Customers to Digital Channels

While terminology like 'omnichannel' became part of our industry's lexicon in 2013, and the desire to migrate customers to digital channels was on top of most financial organization's to-do list, there was evidence that customers have different channels they prefer for different activities.

This May post used Gallup research to illustrate that most customers don't want to use just one channel and that 'forcing' a customer to use a channel they didn't prefer impacted both satisfaction and engagement.

Providing details into channel preferences by banking activity (making deposits, paying a bill, etc.), this post provided some eye opening insight into the risk of 'channel mismatches.

Demographics No Longer Effective For Financial Direct Marketing

Over the past several weeks this post and the preceding post kept switching positions as the number ten post, so I thought I would include both in this year's rankings due to the importance to financial marketers.

Referencing insight from numerous research studies, this post made it clear that relying on traditional age, income, occupation and education parameters is no longer enough. Instead, the post shows the power of advanced segmentation that leverages behavioral insight like channel use, product ownership, transaction levels and types, etc. While many bank and credit union marketers are already using these expanded sources, others continue to use only standard demographics with limited success.

A lot of changes occurred in the financial services industry in 2013, and it appears that the disruption will continue in 2014. I hope my blog brings some clarity to what is happening in our industry and that I can continue to be a resource that you can rely on going forward.

I am humbled by the number of readers I had in 2013 and am committed to sharing insight and observations I have as I travel and visit organizations globally.

Happy New Year!

Top 8 Financial Marketing Resolutions For a Successful 2014

For the past three years, I have published an article on resolutions bank and credit union marketers should make for the upcoming year. While these posts have always been extremely popular and well read, many marketers still have difficulty achieving some of the most important resolutions.

Despite this lack of success by some, I am again providing suggested resolutions for financial marketers since research shows that people who make resolutions are ten times more likely to attain their goals.

When I published my first financial marketing resolution post in 2011(Ten Bank Marketer Resolutions for 2011), the primary emphasis was on replacing lost fee income caused by the Card Act, Reg. E and the Durbin Amendment. Most of the other resolutions addressed ways to either generate new revenues or reduce costs. I did discuss the need to test social media marketing, deliver on the mobile banking promise and reconfigure the branch model, but these were not the highest priorities in 2011.

My resolution post for 2012 (10 Resolutions Bank Marketers Can't Ignore in 2012) enlisted the support of more than 20 global banking industry leaders to help develop suggested strategies for the upcoming year. While the focus of many of the resolutions were similar to the prior year (communication channel mix, customer centricity, social media testing and building share of wallet), discussion expanded to include the importance of leveraging big data and embracing innovation.

As with any list of resolutions, last year's banking industry leader crowdsourcing post (22 Industry Leaders Provide New Years Resolutions for Bank Marketers) included several resolutions from prior years that still presented a challenge, such as enhancing the customer experience, improving measurement of results, integrating the mobile channel and continuing to innovate. The major difference last year was the increasing importance of focus and grabbing the lower hanging fruit due to all of the distractions caused by new regulations and compliance initiatives.

This year, I again collected ideas from some of the most prominent names in the banking industry in the development of my top resolutions for financial marketers. I also researched trends in other industries that are served by my firm, New Control. While some of the suggested resolutions are similar to those in the past, the impact of digital shopping, big data, the mobile channel and a contextual customer experience is evident.


Resolutions are intended to represent major transformational shifts in behavior that will impact personal or professional success in the future. With that in mind, the following resolutions are what some of the best global marketers believe are important for financial institution marketers in 2014.

1. I will move some budget from offline channels to digital channels.

With limited budgets and reduced response rates for almost all traditional marketing channels, there has never been a greater need to optimize marketing spend for bank and credit union marketers. One way to improve results is to supplement your investment in offline channels like direct mail, email and mass media with online tools that can improve results while decreasing costs.

One highly effective way to take advantage of the shift in the consumer's purchase funnel, where they begin their shopping experience online as opposed to in the branch, is to leverage digital retargeting. First discussed in a Bank Marketing Strategy article entitled, 'Banks Include Retargeting as Part of Digital Marketing Strategy' and also written about in a guest post for The Financial Brand, retargeting allows a financial marketer to improve the results of traditional marketing by reaching customers and prospects across their digital footprint in real time as they search the web on their computer or mobile device.

Providing additional touches at a fraction of the cost of traditional media, retargeting allows financial marketers to improve the results of direct mail acquisition or cross-sell campaigns, email programs, social media initiatives or other digital marketing programs while also reaching those prospects and customers who visit your web site or do searches in the financial services category.

While not stopping traditional direct mailings, customers of New Control have moved as much as half of their direct marketing budget to digital channels for one reason . . . it works in conjunction with offline media. That is why this is the first resolution for financial marketers in 2014.

2. I will engage with my customers on mobile channels. 

While referenced in previous resolution posts, the need to engage customers on both web and mobile channels has usually been more talk than action. Another relatively inexpensive initiative for bank and credit union marketers, the need to build engagement and sales across mobile touchpoints is akin to the first resolution regarding retargeting. 

Financial marketers need to leverage the mobile banking platform they already control to reach out to customers with contextual offers that reflect their current relationship, transactional behavior and potentially even their location. With the advanced tools and technologies available, banks and credit unions are in a position to integrate highly personalized offers within mobile banking applications that reflect the next most likely product or service needed by a customer.

As discussed in my post entitled, 'Banks Accelerate Mobile Banking Innovation', the most progressive banks are already monetizing their mobile channel by including custom product offers within their mobile banking application. In 2014, we will begin to see many more financial institutions enhance their merchant funded reward programs by taking advantage of location optimized offers that reflect both the customer's buying behavior as well as their specific location. 

3. I won't get distracted by 'big data'.

Thankfully, much of the hype has died down over the past 12 months, but there are still those who want to chase the next shiny object around big data. The key for 2014 is to capitalize on the ever growing silo of data already available within your organization. Sometimes referred to as structured data, this includes customer demographics, product ownership insight, transactional data, channel usage behavior as well as digital and social interactions with your organization.

In addition to narrowing the scope of data to more easily accessible insights within your firewalls, the importance of moving from data manipulation and reporting to data usage and application has never been more important. As I mentioned in my BankDirector.Com article entitled, 'When It Comes to Big Data, Start Small', competitive advantage is achievable through the better use of data in the development of lifestage trigger cross-sell programs, optimal branch configuration, pricing decisions and risk and fraud monitoring.

In my travels, I have seen that only the very largest of financial institutions are effectively using unstructured (big) data in the development and implementation of marketing programs. For the rest of us, it is better to focus on using the data at our fingertips to improve targeting, communicating, building offers and measurement of results on a real-time (vs. campaign-based) basis.

4. I will innovate through simplification.

According to Siegel + Gale's Fourth Annual Brand Simplicity Index, 75% of customers will recommend brands that provide a simple experience and use simple communications. In other words, if you offer products and services that make it easy to do business with you, your customers will spread the word.

Unfortunately, banks and credit unions sometimes equate innovation with 'adding on new bells and whistles'. Instead, 2014 should be the year we eliminate steps, simplify communication, and even simplify processes within your organization that can foster simplification and innovation.

Over the past few months, I referenced important innovations that simplified the customer experience when I reviewed the way Mitek Systems has leveraged the picture taking capability of a smartphone to remove steps from depositing checks, opening an account, transferring a credit card balance or completing forms ('Banking Innovation for the Fat-Fingered'). I also discussed research by A.T. Kearney and how Fifth Third increased sales and revenue by reducing their deposit services portfolio from 42 to 8 products ('Bank Product Proliferation: Too Much of a Good Thing'). 

Innovating through simplification is not simple. It just takes a dedication to stripping away legacy steps and messages, leaving behind only key elements. But it is a necessary role for financial CMOs in the future as we try to respond to the needs of the digital consumer.

5. I will maximize the value of my current customers.

Similar to the resolutions that most people have around losing weight or getting fit, the financial marketing resolution of maximizing the value of current customers needs to appear on each year's list of resolutions. This is not because bank and credit union marketers don't already make attempts in this area. It is because so many of the basic tenets of success are either missed or not allocated the appropriate human and/or financial resources.

In 2010, 2011, 2012 and again in 2013, I provided the business case and steps required to implement a successful new customer onboarding program. In the next few weeks, I will update some of my recommendations to include digital and mobile components that can improve the important welcome process. Despite this emphasis (and documented financial success in the marketplace), more than half of the financial institutions still haven't introduced a multitouch, multichannel onboarding program that encourages engagement in the first 90 days of the relationship.

In addition, many financial institutions are not leveraging the customer insight they have at their disposal to build a real-time cross-sell process that is based on customer insight as opposed to product goals. It's time to break down the product silos at your organization and use trigger marketing to communicate to customers when their needs are highest as opposed to when your institution's needs are highest.

6. I will get actively involved in branch transformation efforts.

As noted in my Top 10 Retail Banking Trends and Predictions for 2014, while we may not be moving to a branchless banking environment anytime soon, it is clear we are moving to a 'less-branch' distribution structure due to the rapid acceptance of online and mobile banking and the resultant reduction in branch-based transactions.

Bank and credit union marketers may or may not be at the table during the discussions around branch transformation, but the outcome of these discussions will definitely impact customer communications. So make a resolution to get involved.

In the future, a customer will engage with our bank or credit union using multiple channels based on their needs and channel preferences. As noted in two 2013 posts entitled, 'Migrating Banking Customers to Digital Channels' and 'Rethinking the Multichannel Banking Experience', it is not a good strategy to 'force' a customer to use a specific channel. It is also clear that as a customer uses multiple channels (including digital channels within a physical branch), they will expect marketing communications to be consistent across channels.

Its time to become a holistic financial marketer, moving from developing programs for specific channels to supporting real-time marketing experience across all channels the customer may use.

7. I will increase my use of email.

I realize that my resolution of moving budget from offline channels like direct mail, email, and other traditional channels to digital channels may sound counter to a resolution of increasing email, but it comes down to segmenting lists and improving the content of email, resulting in better leads. As one of the most important tactics in achieving the share of wallet goal in resolution 5, personalized emails can improve open rates by 14% and conversion rates by 10% according to recent research by Hubspot.

Despite Google's assault on email last year, the power of personalization, improved segmentation, linked videos ('Improving Bank Onboarding, Cross-Selling and Retention With Personalized Video') and improved response tools positions email as one of the strongest marketing tools for communicating to current customers.

It is time for financial marketing CMOs to demand the ability to effectively leverage the email channel at those institutions that have either restricted or severely limited the use of this channel.

8. I will assume the role of Chief Experience Officer.

At the end of the day, all of the above resolutions will fail if your customer has a poor experience when engaging with your bank or credit union. Unfortunately, as technology has advanced, communication channels have multiplied and the customer has assumed control of the sales and engagement processes, the ability to 'manage' the customer experience is no longer viable. Instead, it becomes the CMOs role (or a designated team) to view your organization from the customer's perspective.

The good news is that the customer has the ability to share their (good or bad) feelings about your organization whenever they desire through a vast array of social channels or using various channels we have developed for transacting and communicating. The bad news is that most of this sharing is now done in public where the interaction can be viewed by hundreds of thousands of other unrelated people.

While the ultimate responsibility for the customer experience needs to reside in one place, the ongoing responsibility needs to be shared with everyone within the organization. When everyone feels empowered to 'make things right' with the customer, the customer usually wins.

My Resolution

Resolutions are usually only successful when they are embraced and measured. I only scratched the surface on resolutions I believe are important for 2014. I may have listed too many and I am sure I missed several.

The key is to make whatever resolutions you set central to what you want to achieve in the new year. In the meantime, I will be collecting research and insights on all of the resolutions above to help readers achieve the above goals using the experiences and findings of others.

My resolution (beyond losing weight and becoming more fit) is:

I will be the 'go to' resource needed by C-level executives and their teams for insights into the constantly changing retail banking marketplace.

Good luck on your resolutions in 2014 and feel free to provide input into how I am doing on my resolution.

Additional Resources

Ten Bank Marketer Resolutions for 2011 - Bank Marketing Strategy (Jan. 2011)

10 Resolutions Bank Marketers Can't Ignore in 2012 - Bank Marketing Strategy (Jan. 2012)

22 Industry Leaders Provide New Years Resolutions for Bank Marketers - Bank Marketing Strategy (Jan. 2013)

New Years Resolution Statistics - Statistic Brain (Jan. 2014)

5 New Years Resolutions for Marketers - Mashable (Dec. 2013)

7 Marketing Resolutions to Start The New Year Right - Hubspot (Jan. 2014)

9 Marketing Resolutions for 2014 - Eloqua (Jan. 2014)

Marketing Predictions Hits and Misses for 2013 and 2014 - Hubspot (Jan 2014)

5 Marketing Resolutions for 2014 - The O'Hara Project (Jan. 2014)

Digital Marketing: 12 Predictions and Resolutions for 2014 - eWeek (Dec. 2013)