Financial institutions

How to Fix Critical Gaps Between Financial Institutions and Consumers

By Stephanie Williams, Vice President, Vericast

There is a dichotomy in current consumer attitudes towards finances: on the one hand, consumers are emboldened by more choice, higher wages and some relief from the pandemic, but on the other hand they face market volatility, rising inflation and clogged supply chains. . Market volatility, in particular, has had a significant impact on consumers’ retirement accounts, and only 18% of US adults with a retirement or investment account say they will invest more in 2022 than they would. did so in 2021.

For modern financial institutions to succeed, they must first seek to understand these underlying forces and understand what consumers are going through. Only then can they deliver what consumers want and need right now.

Amid the instability of the past two years, a chasm has formed between consumers and the financial institutions they associate with. According to Vericast’s recent Financial Services TrendWatch survey, the gap has formed due to changes in privacy practices, consumer expectations for personalization, social changes, and marketing innovation. To achieve their business goals and ensure their long-term survival, financial institutions must seek to fill this void and successfully engage with consumers.

Five Financial Services Marketing Trends for 2022

To attract and retain loyal customers, financial institutions need to meet today’s consumers where they are, not where they think they should be. The first step to building stronger relationships with consumers is to better understand their mindset and point of view.

Here are five of the top financial and marketing trends for 2022, and understanding them could help bridge the gap between institutions and consumers:

  • Change events threaten long-standing loyalties: According to the survey results, a majority of consumers (75%) say they are very or somewhat likely to leave their financial institution after a merger or acquisition. Delivering consistent, high-quality customer service is even more important during these change events where loyalty can be tested.
  • Streaming entertainment offers new account acquisition tools: Financial institutions need to keep abreast of the latest marketing channels and strategies to increase account growth. Traditional channels such as social media, email and direct mail rank highest in marketing uses, while the least used channel – connected television (CTV) – holds the most promise. Industry research shows that 80% of US homes own at least one CTV device. In 2022, financial marketers must strategize to capitalize on engagement opportunities through CTV.
  • Privacy expectations affect marketing strategies and personalization: Less than a third of financial institutions are prepared for a cookieless targeting strategy. As search engines increasingly eliminate third-party cookies (Google Chrome will become the last browser to do so next year), it is imperative that financial institutions have a plan in place to reach consumers under the new privacy regulations and preferences.

While consumers demand increased privacy, they still want a high level of personalization from the financial institutions they engage with. Consumers receive many offers from many different providers, so financial institutions must use the data they have to personalize recommendations.

  • The demand for corporate responsibility challenges marketing objectives: Consumers have ranked community/civic engagement and social responsibility high on their list of priorities and are more likely to associate with companies that align with these values. Conversely, financial services marketers ranked local brand awareness and social and environmental responsibility low on their list of priorities. This disconnect is likely to create even wider gaps between financial institutions and consumers unless financial marketers start to appeal to these values.
  • Lending will be the competitive market-making battleground: One area where consumers say they are willing to work with different financial institutions is in securing home and auto loans. Beyond that, most consumers (86%) are not inclined to switch financial institutions. However, 72% of financial institutions identified account acquisition as the top revenue driver this year, highlighting a major divide between institutions and the audience they are trying to target.

Follow the evolution of values

While consumers want excellent customer service, it doesn’t stop there – they also want their banks and credit unions to be community partners. These changing values ​​are why ongoing research is essential to understanding changing market conditions and the emergence of new trends and patterns.

Understanding the origin and reasoning behind the disconnect with consumers will enable financial marketers to deliver the right message to the right audience at the right time, resulting in improved performance in 2022 and beyond.