“A Day in the Life” is the iconic final song on the Beatles’ Sgt. Pepper’s Lonely Hearts Club Band album. The song is comprised of two main tracks composed independently by John Lennon and Paul McCartney. The first track is an inspiration from John who constantly read newspapers about world events while the second is from Paul reflecting a typical hectic day in a working man’s life. This duality of combing macro trends while diving deep into the micro of a single consumer’s life is a consummate challenge of any marketer in today’s digital age, and even more so to those in the rapidly evolving field of financial services.
From buying a pair of shoes to taking out home financing, creating an investment portfolio to paying a gas bill, banking plays an important role in the life of any consumer. And yet these fundamental services are just the beginning: the future of any financial institution is tied up in the recognition that to become truly integral to a customer’s life, they have to become deeply integrated within it.
So how to do that?
For one, by understanding consumer lifestyle trends and developing services, applications, and marketing efforts that not only align with those trends but that anticipate their future direction. Staying ahead of the curve equals staying relevant in the day-to-day life of the end user.
Big Data.
Thanks to the incredible growth of online activity, more data about every customer is available than ever before. Even more exciting than the sheer volume of data is the increasingly sophisticated range of tools and methods to interpret, analyse and make use of that data.
In the banking world, data about a customer’s spending habits can be used to anticipate their future needs — allowing products to be pro-actively offered to them before they have to seek them out. A customer approaching their credit limit, for example, could be presented with a simple opt-in offer to extend it, with the new limit, terms and rates being customised based on that person’s credit history and spending habits.
Big data benefits the consumer as well as the provider, since processes are made simpler and are tailored to their needs. It can also empower them to make better financial decisions by supplying insights and advice on how to better spend, save, or invest.
Artificial Intelligence.
The medium for delivering such insights and offers is also something to consider. While smartphones are one obvious, and highly ubiquitous, device to be present on, reports on future consumer lifestyle trends point to the rise of Artificial Intelligence (AI) and wearable tech.
Think of it this way: how many of us carry and use our smartphones so consistently that we may as well be wearing them on our arms? Wearable technology, accompanied by AI, is anticipated to boom in the near future. Forecasters expect it to also integrate with other systems such as smart home systems — think automatic purchasing of household products and management of appliances. As this technology becomes more integral to consumer lives, business and institutions who fail to adapt to it will lose relevance.
Bring together the concepts of big data and AI, and financial applications have the potential to be vastly more beneficial to consumers. In the Ericsson Consumer Trends Report for 2016[1], 41% of people surveyed thought that an AI financial advisor would be beneficial.
Networking & The Sharing Economy.
These days services aren’t necessarily hindered but actually bolstered by a high volume of users. In other words, services become better the more people there are using them. Consider crowd intelligence: consumers relate better to user reviews than reviews by experts, so providing peer reviews on products and services is important.
The “sharing economy” meanwhile has caused something of a shake-up across multiple industries, from Uber to AirBNB. In their survey of over 45,000 people across 24 countries, Ericsson reports that “34 percent already participate in various forms of the sharing economy, from rooms, cars and bikes to internet sharing and person-to-person loans.” This new way of doing business can cut institutions like banks out entirely, for example crowdfunding a project rather than approaching a financial institution for capital.
The key here is to accept that the trend exists and work with it, rather than against it. View customers as individuals, but also see them as an interconnected network. Consider ways that consumers can leverage off each other and the sharing economy, and look for ways to be an active facilitator of this.
One example might be using big data to match business customers with individual customers based on their interests, spending habits, and geographic location. Customers can be presented with promotions and offers at those businesses — for example a deal at a local restaurant — with big data analysis ensuring that the offer is both exciting and relevant to them.
In their report on “Smarter digital banking with big data”, IBM[2] describes this kind of merchant-program scenario and points out the follow-up benefit of social media spread. A customer shares this kind of deal across social media platforms, marketing both the business and the bank in the process.
Social Discovery.
Social discovery also has broader implications. The ability to share information about purchases, activities, lifestyle choices, etc, is highly important to consumers, and people are increasingly using this social media data as a foundation for decision making.
“Increasingly an experience isn’t meaningful until it is shared,” says a report by Bord Bia Consumer Lifestyle Trends. “Brands that facilitate sharing in innovative ways will gain traction and engagement.”[3] This kind of social sharing allows people to see where friends have been, what they’ve bought, what kind of deals they’ve discovered, and more. If sharing an experience — be it a holiday, the financing of a new home, or an online purchase — makes it more meaningful to both the sharer and their peers, simplifying the sharing process is more important than ever.
Towards Integrated Banking.
What comes to mind when we think about online banking? For most customers, it’s a simple, unappealing web or phone application that they only visit to occasionally make a payment or check a balance. That picture can and must change.
Financial services can be integrated into consumers’ lives in a much more rewarding way. One that makes use of big data to optimise promotions, advise existing customers and attract new ones. One that facilitates social sharing and discovery. One that looks towards the future of artificial intelligence and technological integration.
So, to lament on John’s final verse chastising the British government for spending a fortune counting potholes in the streets of “Blackburn Lancashire” rather actually fixing the streets, let’s stop counting data and start fixing things to, most importantly, make banking integrate seamlessly into the daily lives of consumers.
[1]https://www.ericsson.com/res/docs/2015/consumerlab/ericsson-consumerlab-10-hot-consumer-trends-2016-report.pdf
[2]http://www-935.ibm.com/industries/banking/digital-banking-with-big-data/#/main
[3]http://www.bordbiaconsumerlifestyletrends.ie/shared-experiences/