18 August 2020
Digital transformation is happening whether we like it or not. COVID-19 has forced urgency and highlighted just how many financial institutions are not set-up to easily compete with this new accelerated pace.
According to the Temenos Digital Experience Survey, large US banks have invested $162bn to-date in all of their currently live digital transformation initiatives. Yet only 25% of customers say that they have noticed any discernible improvement in their banking experiences. That’s a whole lot of money for not that much change. It begs the question, why are banks not seeing the kind of results you would expect from large financial investments?
I’ve worked with many companies about to embark on a digital transformation initiatives and have noticed a pattern. If I walk into a boardroom ready to discuss digital transformation and find there’s no senior marketer present things become much more difficult. It becomes my job to be the customer voice in the absence of a marketing representative from the company - who is arguably the one best placed to tell the rest of the room about their customers.
It’s on this experience that I have based the hypothesis of our latest research. I theorized that if marketers were more involved in the transformation process, we’d be able to achieve the sort of improvements one would expect for investments of $162bn.
To test this hypothesis, we surveyed 500 senior financial marketers in the US and Europe between April 27th and May 17th. The results revealed compelling evidence that applying a marketing mindset to digital transformation initiatives can release the true potential of any investment. We defined institutions taking a marketing mindset as those who involved the marketing function as active decision makers when defining their overall digital transformation strategy.
What we also found is every institution we spoke to had faced an issue as a result of COVID-19. Issues almost no one was prepared for. Of those surveyed:
We asked respondents how easy it was based on their current systems, processes and culture to adapt during the pandemic. There was a marked difference between those organizations who invited marketing to the digital transformation table and those who didn’t. Those who applied a marketing mindset to their digital transformation were more equipped to pivot quickly and better serve their customers when faced with COVID-19. When looking specifically at overall customer experience, 32% of those using a marketing mindset found it easy to pivot immediately the crisis hit, compared to only 25% of those not taking a marketing approach to transformation.
The wave of change has well and truly hit financial institutions. And keeping your head above water is no longer enough. Of the marketers we surveyed only 17% felt either extremely or very optimistic that their banks can provide what customers need in the next 12 months.
In June we revealed the initial findings of our latest research on digital transformation as part of Temenos’s webinar series “The Power of Marketing in Uncertain Times”, and invited financial marketing leaders to join us. During June’s webinar we polled attendees. One of the questions asked was: “How would you rate your digital banking capabilities to your immediate competitors?” Of those who attended our webinar, 40% said they are behind.
This lack of optimism suggests that a large number of banks and credit unions are struggling to keep up. Life is different and we need to find a new way forward.
Any digital transformation aimed to improve customer experience must have marketers involved, but right now marketers don’t even make the meeting. Forrester asked financial services brands who is responsible for digital transformation within their organizations. The results were telling:
None of the positions listed speak for the customer. Marketers do not only represent their respective brands to customers, but represent their customers to others the within brand. If they’re not at the table how can we really make meaningful change that improves customer experience?
We also asked our webinar attendees: “How important will the role of marketing be in securing a strong future for your institution post COVID-19?”
The overwhelming majority see how important marketing is for financial institutions looking to pave a future in the new normal. Digital transformation is no longer a question of “when” and now a question of “how”. Those that bring a marketing mindset to their initiatives will not only close that gap between investment and results but will be left with more satisfied customers.
Marketers need to be ready to adjust their strategy accordingly, and quickly. With so many feeling behind the curve it’s important to be able to lean on expertise where necessary.
At Metia we’ve got lots of experience working with mid-size banks and credit unions to find a more impactful route to market. In response to this situation we’ve created Marketing Strategy Re-Start to help banks and credit unions by equipping marketing teams with everything they need to respond to the changes around them. We recognize how critical speed and flexibility are in these circumstances. As such, we’ve set up this program to deliver in six weeks.
In addition, we have shared our findings in our latest report “Mindset Matters: Redefining Digital Banking Transformation with a Marketing Mindset” which you can download here.
We’re here to help and would love to talk to you about re-starting your marketing strategy. Get in touch.