A clever new slogan by one of Australia’s big banks has changed the word ‘fee’ to ‘free’ in relation to ATM charges.
It is a subtle, but necessary innovation as the banking sector fights to remain relevant in the face of rising fintech start-ups that are challenging the status quo.
The Big Four of Commonwealth, ANZ, Westpac and NAB have all ditched fees at their ATM machines in a bid to save Aussies money and win some favour back.
What it also shows is that they are listening to consumer groups and their displeasure with “foreign ATM” fees within Australia, with RBA data showing that withdrawals have slumped to their lowest ebb in 15 years.
Still, the salient point is that the banks had used consumer wants and desires to engineer an outcome that favoured them. And with genuine fintech competition coming through the advent of payment platforms like PayPal, Bitcoin and other cryptocurrencies, harvesting that customer data is critical to success.
The rise of marketing analytics in finance
It is easy to look at the rapid rise of PayPal and Bitcoin as markers that the banks are ready to be challenged. The problem is, investment has slowed in fintech startups on a global scale.
This indicates that either the market is too saturated or competition is too fierce for investors to be tempted into sinking their hard-earned cash into new platforms.
With the major banks still holding significant sway, and fintech start-ups locked in a competitive war to be the next to challenge them, using numbers to understand what consumers want is the currency all financial services should be looking to invest in.
And farming this data should become practice from the first instance, not a tacked on innovation later on, digital intelligence platform CoolaData’s VP of customer success Hagit Ben Shoshan said.
“Don’t wait until your startup is big to start implementing analytics. Understand your user behavior as early as possible to be better prepared for your next high stage of growth,” he said.
Business intelligence and business analytics are big industries
The flipside of having so much competition in the fintech sphere, is that software developers are meeting the demand with data analytic farming software to meet their needs.
When it comes to business intelligence and analytics software, global sales have reached $17 billion in 2017 alone.
Velocity Marketing Analytics managing director Frank Koechlein said that BI and BA are now ‘a critical necessity’ for marketing efforts by financial institutions and fintech firms.
“If you don’t have an analytics platform, your financial institution is at a significant disadvantage,” he said.
Banks and credit unions are responding, with the Digital Banking Report’s 2017 Financial Marketing Trends showing the desire to improve analytics capabilities is one of their top priorities this year.
Crunching the numbers to deliver a personal experience
Using data to understand customer behaviour is the new world way to deliver personalised, targeted content to your customers.
Perhaps ironically, there is data that shows that these numbers are producing tangible gains when it comes to marketing.
A McKinsey report showed that using data to generate marketing solutions can increase productivity by 15-20 per cent. Another report put together by The Financial Brand showed that by delivering a highly individualised experience, financial institutions can increase their annual revenue by 14 per cent.
To produce content that works, the numbers need to be harvested. Data analytics is no longer a value-add for the finance sector’s marketing, it is an essential tool.
Which brings us back to ATM fee becoming ATM free. The Australian banking sector is at a crossroads at present, working against competition it has never faced before, the declining use of services, interest rate angst from consumers and the ever-present threat of a Royal Commission by Federal politicians.
But by listening to its audience, using the data that shows that cost of living is at the top of the concerns list for most Australians and acting with a simple measure that garners favour, they have immediately clawed some ground back.
Using data analytics for financial marketing works, and those who neglect it risk being left behind.
BUSINESS DEVELOPMENT DIRECTOR
Header image credit: Olu Eletu