The Acceleration of Digital Marketing Transformation in Financial Services
When Alexander Hamilton founded America’s first bank, The Bank of New York, in 1784 he couldn’t have possibly imagined becoming a Broadway sensation. But Broadway is just one of many starring roles he has played in the past 250 years. Not only was he a founding father of the US financial system, but also of the country itself, as well as the US Coast Guard and the New York Post. Hamilton was an orphan who transformed his life to become one of the country’s most important historical figures. The financial services industry (FSI) he founded is also going through important transformation today – digital marketing transformation.
Like other heavily regulated industries, FSI has been slow to embrace the cloud. Driven by data security concerns, regulation, and culture, it has maintained a white-knuckle grip on legacy, on-premise technology. That grip is finally starting to loosen and it has a lot to do with accelerating digital transformation and technology.
Digital Marketing Transformation Accelerates in the Last Two Years
We have started to see an acceleration in digital marketing transformation. Marketing and IT executives have brokered a peace between the need for security and the requirement for deep engagement.
Financial Services and MarTech-led marketing transformation are a match made in heaven. With fierce competition, an increase in products to sell, and a desire to lower costs, the conditions are ripe for today’s digital marketers to thrive.
The key drivers enabling this transformation are client expectations, changing demographics, and the capabilities of advanced digital marketing platforms.
Changing Engagement Habits
Across the spectrum of FSI clients, from retail banking consumers to institutional investors, how people engage with them has changed dramatically over the past ten years. Relationships remain important in this industry, but increasingly people are turning to digital channels and content for education and interaction with critical services.
Digital has exploded in every capacity of our lives. B2B financial services customers are also consumers and they expect a better digital experience today across the entire client lifecycle. Financial services organizations that are ahead of the curve use data from digital engagement to gain a 360-degree view of their audience to turn prospects into customers and customers into advocates.
FSI firms have increasingly looked to reduce costs given perpetually low interest rates, the shift to passive investing, and the cost of compliance with regulations enacted in the 2008 financial crisis. Digitization has offered this opportunity for cost reduction.
Marketing and Sales Alignment Enables ‘One-Team’ Engagement
One of the major challenges for firms has been marketing and sales alignment. For so long, this industry has been dominated by sales. Marketing’s job was to build the brand.
Today, they use technology such as Marketing Automation Platforms to drive targeted engagement in each stage of a client relationship. They are now speaking the language of MQLs, SALs, and SQLs. To truly service their clients, marketing and sales have to align their efforts in educating, inspiring, and driving new business opportunities.
We are seeing many of our FSI clients start to embrace this “one-team” notion but at the same time are struggling to figure out how to make it real. Senior marketing executives in many of our FSI clients spend a lot of time influencing others to drive change and make change happen on an individual level – both within sales and marketing.
Demographic Shifts are a Major Catalyst
We do a lot of work with asset managers who work with a financial advisor channel. The demographics of advisors and brokers and dealers is changing significantly today. The baby boomer advisor your parents relied on for decades is now retiring. They are being replaced by second career professionals and junior associates.
These two demographic segments are younger, more female, and are much more interested in engaging digitally with asset managers.
Marketing Automation and other digital platforms are providing this opportunity for deep digital engagement. In forward-thinking organizations, marketing is activating advisors who are doing limited business with them. They are also engaging with active advisors, augmenting the efforts of the distribution team to increase net inflows.
Technology Maturity Accelerates Adoption
Unlike industries such as technology and telecommunications, Financial Services is not typically an early adopter of technology.
Spurred by the maturation of the cloud and digital marketing platforms such as Marketo we are now seeing a stronger comfort level to embrace them. Still, it’s an industry that requires leaders with a vision and the ability to play the long game.
The regulatory environment FSI operates in requires a lot of patience and perseverance to drive transformation. They have also had to adjust to things like GDPR. Internally, change management is a major challenge. FSI firms need to build the business case to invest in digital transformation – in terms of the technology, internal resources, and the consulting help required.
Lessons Learned in Digital Marketing Transformation
Along the way, we have learned some important lessons. First and foremost is finding the right group of internal partners.
One of our big FSI clients’ underscores that digital marketing transformation in Financial Services is a team sport. “Sometimes you have to make change happen yourself and bring others along with you. It’s critical to find internal champions who will partner with you, do a pilot, and then expand the use case from there.”
We think that’s an approach Hamilton would have liked.
Hear how BNY Mellon is Driving Digital Marketing Transformation
We recently hosted a 30-minute webinar with Adam Koster, BNY Mellon’s VP of Marketing Automation for Investment Services. It was a fantastic discussion between Adam and our own Bill Anderson. Watch it now to hear how BNY is embracing digital marketing transformation. Adam shares his insights on change management, building partnerships, and the path they are taking.