Time for financial services to change the message

In Mintel’s Payments Marketing Trends 2016 thought piece we discuss the trend “Wallet Wellness” where we predicted that the “financial health” message would become central to the core value proposition when marketing payments (and banking products), not only to Millennials, but also to the millions of Americans who are struggling with their finances. Recent developments suggest that this trend is unfolding as we predicted and financial services brands need to evolve their messages sooner rather than later.

1. Delivering a New Message

In February, SunTrust chose the most expensive Super Bowl airtime in advertising history to launch its onUp campaign, with the aim of encouraging consumers to take control of their finances. The bank subsequently sent more than 1 million emails, as part of the campaign, according to Mintel ePerformance/eDataSource, and 105,000 consumers have since joined the “movement.”

“We are starting the conversation to encourage people to gain control over their finances. Similar to physical fitness, people need motivation and support to improve their financial well-being. Across all income levels, people who are financially confident report being three times more satisfied with their lives,” said SunTrust Chairman & CEO William H. Rogers Jr.

 2. Incorporating Fitness Trackers

In Dubai, Emirates NBD just launched the first fitness account designed for the Apple Watch.  Customers earn interest of up to 2% per year on their savings based on the number of steps that they walk or run daily. Beginning with a base rate of 0.25 %, the interest rate rises to 0.50 % for 5,000 steps, 1 %  for 8,000 and 2 %  when they accumulate 12,000 steps.

“The Emirates NBD Fitness Account heralds a new stage in digital banking as it efficiently integrates customers’ health and lifestyle goals with their banking requirements. In conjunction with leading brands in the fitness area, we are providing clients a holistic value recommendation where health, wealth and innovation merge to offer a truly distinct consumer experience,” said Suvo Sarkar, Senior Executive Vice President & Group Head, Retail Banking and Wealth Management, Emirates NBD.

3. Consumers are Tired of Cross Selling

According to the 2015 Retail Banking Vulnerability Study, published by management consultancy cg42, consumers are frustrated by aggressive cross-selling tactics by banks. Most major banks have tried to emulate Wells Fargo, which is well known for setting a goal of 8 products per customer and providing cross-selling updates in its quarterly earnings reports. For the past decade, cross-selling has been the key to profitability but research suggests that it might be time to change this product-focused approach.

“Despite the improvement in vulnerability levels from 2011 to today, a majority of customers continue to believe that banks don’t act in the best interests of their customers. With hundreds of billions of dollars on the line, banks need to reevaluate how they treat their customers and understand the substantial financial impact of failing to address customer frustrations,” said Stephen Beck, Found and Managing Partner, cg42.

 4. Americans are Still Struggling

Despite a growing economy, Americans are still struggling financially. According to the Center for Financial Services Innovation (CFSI), 57% of Americans – approximately 138 million people –  are struggling to meet their financial obligations. According to Mintel, seven in 10 Americans agree that becoming debt-free is their main financial priority. The sheer scale suggests that this isn’t just a problem for low income consumers or the unbanked, and, at the same time, it represents a major opportunity for financial services innovation .

“…what consumers really want is to get healthy – physically, environmentally, and financially. To remain relevant in a 21^st century, technology-driven, post-Dodd Frank world, financial institutions need a new competitive edge. We believe financial health represents a new and powerful basis of competition. After all, it’s what their customers really want,” said Jennifer Tescher, President & CEO, CFSI.

What we think

Cross-selling is necessary in order to create profitable customers but the banking industry’s approach to cross-selling has tilted towards a product-focused approach rather than being customer-focused – at least in the eyes of consumers themselves. Americans need to build their financial health and banks need to create products and evolve their cross-selling strategies with this objective in mind. At the same time, growing consumer interest in monitoring health and fitness as well as an appetite for wearables provides the ideal opportunity to leverage new technology to provide engaging solutions that connect both physical and financial health.

Andrew Davidson is SVP/Chief Insights Officer for Mintel Comperemedia. He is an expert in data-driven cross channel marketing intelligence, consumer behavior and global trends. As a thought leader and expert speaker, Andrew has consistently predicted the evolution of payments marketing for the past 23 years. He speaks at high profile industry events and has presented at conferences in the US, Canada, Australia, New Zealand, Hong Kong and Taiwan. Andrew is passionate about the global role of payments as the first step on the path to financial inclusion.