While all of commerce is experiencing an unprecedented acceleration of change that is shaking business to its core, the banking industry faces more top-to-bottom change than almost any other sector.
Banking is in total evolution. The composition of the world’s population is changing and the divide between the haves and the have-nots is growing. In terms of new fundamental questions, we have not seen anything yet. Buckle your seat belts – the ride will be joyful but speedy and turbulent.
First, how to market to and deal with clients who are discovering revolutionary new ways to aggregate as audiences and who are increasingly empowered to interact with brands in new ways. This is a long way from the conventional view of advertiser-initiated, one-way monologues, and it naturally raises the question ‘Is advertising dead?’, to which my response is a resounding no.
Clearly, however, the role of advertising in the overall marketing mix is being reshaped, creating a context for a broad range of marketing tools that collectively shape a brand and the way it connects with its customers.
Where banking should be the most intimate and personal of all commercial relations, for most it is the most public and exposed, conducted in a physical plant constructed for transactions, not relationships. And the cost of that physical plant continues to rise, in terms of new construction and modifications to existing branches. A recent Credit Union Journal article reported that new construction costs have risen 8% over the past year. And the attempts to provide more customised and personalised services are pushing up costs even more.
Is there another way? If we evaluate the growing sophistication and impact of internet-enabled social networks, we may find clues that point to a more viable future. Today, virtually every niche is served by a social network – a virtual community of people organised by nothing more than a common interest. Many of these communities require financial advice, whether it is graduates seeking to manage debt or newly widowed mothers managing household finances for the first time. Increasingly, smart marketers are adopting these microfocuses, tailoring products and messages to highly specialised audiences and addressing them in social network forums. It is a long way from a mass-media/physical-branch mentality. And, of course, the cost is much lower.
Enter personal finance web sites such as wesabe.com and geezeo.com, both based in the US. Wesabe and other similar sites combine the necessities of banking with the support of an online community. Members can see their various balances (credit card, current and savings statements), compare their spending habits with that of others and get tailored tips based on their transaction history. Wesabe’s instructional video plays up the customisable appeal of its services, reminding users that “these [tips] are ways to save money that are relevant to me, not some generic piece of financial advice”.
Thanks to online communities, banking is no longer a chore but an integral part of a consumer’s identity – here are my spending habits and goals, and here is how they compare with those of my friends and peers. A transaction becomes a potential way to bond with others.
Online community banking
For some, the idea of sharing personal financial information is far from appealing. Yet as the popularity of online social networks continues to grow, and as more people become accustomed to branchless banking, joining a banking community online will start to seem like a natural thing to do, especially for the MySpace generations who feel completely at ease expressing all parts of themselves online.
Just as we are not witnessing the demise of advertising, nor is the end nigh for the physical bank. But clearly financial imperatives and, more importantly, the need to better serve the specialist requirements of multiple audiences suggest that we need to rethink the physical plan – where; with what density; with what services and personnel; and with what kind of online or mobile capability?
The future of banking, from a structural and relational point of view, may soon look very different from our current conception. But then, there are relatively few commercial endeavours that will not.
Marian Salzman is chief marketing officer at JWT Worldwide.
