Circumstances including reduced interest rates and increased risk of loan loss have led to significant cost control measures, including a pull back on marketing spend and discretionary capital expenditures. Additionally, FSI had to quickly support government programs such as the CARES Act and PPP, which led to a significant strain on operational processes, frontline staff and platforms.  

It has been reported that digital adoption has accelerated five years since the start of COVID quarantines. As a result, digital banking became the primary sales and service channel. Consumers were forced to rapidly adopt digital platforms to support day-to-day servicing and engagement. The sizable shift in users was reflected in search terms driving website traffic.

The industry saw a 25% increase in searches for “how to switch banks,” representing an opportunity for incumbents and disruptors. Additionally, an increased number of customers have sought out financial education content based on the impacts of COVID-19 as reflected through an increase in terms like “how to deposit a check by mobile” or “open online bank account.” 

FSI will continue to experience revenue and cost pressures due to slowing economic and market conditions in 2021. FSI brands will need to rationalize their spend across distribution channels with an emphasis on increasing precision in all forms of digital engagement and sales. They will also need to prioritize strategic investments in direct digital and digital facilitated platforms to create differentiated engagement with consumers.

FSI will no longer be able to underestimate the digital experience nor will it be able to delay digital transformation investments. CMOs in FSI cannot afford to rely heavily on branches as the hub of engagement and they cannot afford to miss the opportunity to engineer relevance into every customer interaction. These trends will likely impact regional and community banks most significantly as they typically under-invest in digital capabilities, leaving a door open for large national banks and fintechs.

 Customers expect flexibility and friction-free experiences from FSI. Research shows that focus in the importance of digital-led sales efforts post-pandemic has increased two-fold. Additionally, there must be a focus on creating a personalized customer experience while protecting customer data. 75% of people will only engage with a message that is personalized to their needs, yet 87% of the same people are concerned with how companies are using their data.

 Dynamic content optimization is currently under-leveraged but a great way to deliver on the consumers’ need for differentiated experiences at scale without a major investment in content creation or highly complex testing structures. 

• Develop a culture of authenticity.
  At their best, FSIs are seen by consumers as partners in the enablement of their lifestyle aspirations. Current cultural issues have become increasingly embedded in daily activities. Be sure to be sensitive toward current events and equity measures. Activism has more meaning now than ever. Ensure to incorporate these values at a business level.
  
  
  

• Form a strategy of engagement. 
  Companies have invested in personalization platforms but don’t have a clear unifying engagement strategy. FSI needs a plan with a focus on the consumer to drive the cultural and organizational changes needed to take advantage of these platforms. CMOs will need to focus on moving from personalization to engagement.  

• Rethink and redefine audiences.
  Changes in consumer economic conditions, needs and behaviors require FSIs to refine their target segments and, in some cases, explore new ones completely. According to the dentsu CMO survey 2020, 44% of ‘prepared’ CMOs in the U.S. expect understanding temporary consumer shifts vs. permanent behavioral change to be their top challenge in 2021. CMOs need to look at new data sets including behavioral and contextual data.
  
  
  

• Focus on integration and orchestration.
  Product and channel silos are a reality of how FSIs are organized. This is not going to change. Companies need to develop cross-functional teams and integrated platforms in order to abstract consumers from this complexity.
  
  
  

• Renewed focus on measurement. 
  To go beyond in-channel measurement and create a normalized view of performance, FSI should prioritize establishing a centralized approach for experience measurement at an individual customer level. CMOs need to ensure a seamless digital experience across customer touch points to present one cohesive brand.
  
  
  
  

Ultimately, CMOs cannot afford to do business as usual or use copycat tactics. Verizon, T-Mobile and AT&T have all adopted each other’s marketing strategies – touting the same claims and benefits, and as a result, only 20% of consumers are currently open to switching providers (Source: Mintel). The ‘Big Three’ can no longer afford to see each other as competitors or see themselves as mere carriers. Instead, they must become champions of purpose, custodians of data protection, and resurrect appreciation for simplicity.