BAI Banking Strategies: Cognizant’s Digital Banking Partner Says New Digital Capabilities are Dramatically Expanding Marketing’s Role in Banking

“Many bank executives still view marketing as the champion of brand building, essentially a middleman that funnels leads to sales and adds little value to the bottom line,” writes Steven DeLaCastro. “But new digital capabilities are dramatically expanding marketing’s role in banking. Instead of a cost center, marketing is morphing into an engine for top- and bottom-line revenue growth.” Excerpts:

“Perhaps more than any other banking function, marketing holds the greatest potential for direct revenue capture because of its ability to create immediacy and relevance for customers.

Marketing’s rise is rooted in multiple factors, including changing demographics and the digital disruption that’s upending all segments of the financial services sector. It’s also traceable to the complexity of the task at hand: connecting with profitable, older customers while communicating value and relevance to younger consumers. Only marketing’s laser-like outreach and engagement can strike that careful, nuanced balance.

How can banks make those targeted customer connections? Driving revenue means not just rethinking marketing, but also banking’s identity. It means understanding how customers see you, from the outside in. In the digital era, banks are increasingly becoming marketplaces. The result is that we’re starting to see bank websites that feature non-banking services in addition to traditional products and services — a mash-up that leverages the ecosystem of intermediaries and services in the quest for customers.

Banks are forging partnerships that enable them to offer insurance for products that require it, or extended loyalty programs that offer banking customers points and awards from travel and hospitality providers. The goal is to keep customers on banking websites, even as banks battle for customers among themselves and with financial technology (FinTech) startups and non-bank competitors such as Google and Amazon.

As digital disruption challenges banks externally, marketing often proves to be an internal disruptor, pushing engagement and distribution models that support new strategies such as event-driven marketing. For example, once a customer pays off a car loan, a bank might offer another loan or an investment recommendation based on the customer’s spending patterns and financial goals and deliver it via personalized messages through mobile or online channels.

Getting to event-driven marketing, however, remains a challenge for banks, which still organize themselves in silos. Successfully extending relevant offers to customers assumes that the news of a customer’s auto loan payoff reaches the mortgage and investing departments — and that the department can act on it. To capitalize on the new revenue opportunities, banks have to accelerate the process of dismantling their organizational silos. Every digital step moving forward depends on it.”

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