How financial brands can leverage the rise of the Platform Economy
Look up any brand study over the last few years. Chances are some of the top brands belong to the financial services industry, particularly here in Asia. In Singapore, DBS, OCBC and UOB make it to the top of the list, while in Indonesia, Bank Central Asia (BCA) and Bank Rakyat Indonesia (BRI) are the most valuable. In Malaysia, Maybank, CIMB and Public Bank make the list of top 10 most valuable brands.
Banks have been able to build powerful brands over the years because of their extensive network and the strong trust customers have placed in them. However, they can’t rest on their laurels. According to an EY report, while consumers’ trust in banks continue to remain high over the years, non-traditional providers have received parity on the foundational dimensions of trust and moved ahead on relationship-driven and differentiating dimensions of trust that matter most. As such, even though banks have strong brand value, they need to gear up to face the challenges presented by a changing financial ecosystem.
One of the biggest changes in consumer purchase behaviour is being brought in by the emergence of the platform economy. Online marketplaces such as Amazon are becoming the go-to site for consumers, as they are faced with more choices than ever before. We are beginning to see the same trend in the financial services industry. According to a report on disruptive forces transforming financial services, prepared by the World Economic Forum with support from Deloitte, ‘platforms that offer the ability to engage with different financial institutions from a single channel may become the dominant model for the delivery of financial services’.
While the shift may be seen as disruptive in the short term, banks can leverage the move to platforms to further market their products and strengthen their brands. Here are some of the opportunities:
· Focussed digital spends: Digital spends are increasing across various industries and the banking industry is no exception. However, with a plethora of digital channels and growing number of players in the market vying for the customer’s attention, focussed digital spends are key. Marketplaces provide an ideal platform for banks to reach digital customers who are engaged and have the intention to apply for financial products. Banking brands also stand to benefit from the digital marketing expertise marketplaces have developed. For instance, BankBazaar has built strong Search Engine Optimisation (SEO) and Search Engine Marketing (SEM) capabilities to target relevant customers and drive high intent consumer traffic to its website. In India, traffic has grown nine times over the past two years and today BankBazaar receives more credit card and personal loan applications online than any bank.
· Using data analytics to customise offers: As customer usage of digital channels grows, there is a treasure trove of data that banks can leverage to enhance their offerings and drive brand value. According to the findings from EY’s Global Consumer Banking Survey, banks need to enhance customer understanding by adopting new data streams and more advanced analytics, segment customers more granularly and develop tailored propositions, and improve personalisation and targeting capabilities.
While banks have a wealth of data, operations tend to be complex and siloed. As such, it is challenging to put together relevant data from different departments to provide a comprehensive picture.
Marketplaces offer a holistic view of the customer journey from search, all the way to approval and beyond. This opens up avenues for banks to personalise the customer experience by offering real-time offers based on the customer profiles. At BankBazaar, we provide an ‘Offer Deviation Engine’, that leverages customer analytics to mimic the bank’s back-office offline deviation process in real time, allowing banks to utilise customised offers to acquire new customers and also retain existing customers who may be shopping around.
· Seamless customer experience: The modern consumer interacts with brands across multiple channels and touchpoints. In such a scenario, creating a seamless customer experience can play an integral role in building brand equity. According to a customer experience study commissioned by Accenture and conducted by Forrester, a 1 percent increase in customer experience scores can translate into $10-$100 millions in annual revenue. Customer experience high performers also saw higher rates of digital success, including a 21% improvement in brand relevance.
Online marketplaces not only allow banks to provide an end-to-end experience for customers but also help reduce turnaround time by providing instant and paperless access to financial products, leading to a frictionless customer journey.
In the world of digital there is constant change in consumer behaviour and buying patterns, evolution of current products, and emergence of new ones. Banking brands need to adapt to keep pace with their customers. With the rise of the platform economy, it will be more important than ever to be on marketplaces, especially if the competition already is. By working together, banks and marketplaces can create a path to mutual success.
— Vipin Kalra is the CEO of BankBazaar International based in Singapore. BankBazaar is a leading online marketplace that helps consumers compare and apply for financial products such as credit cards, loans, insurance and mutual funds.