Banks and insurers are losing money by not tailoring their communications.
Financial services firms miss out on £113bn per year by ignoring the wants and needs of female customers, research by Kantar has suggested. This disregard for tailoring communications for women is symptomatic of a wider problem in customer engagement in the sector, says Optimove.
Kantar’s report shows financial advertising and marketing strategies fail to communicate trustworthiness, dependability or understanding – particularly to women, 65% of whom report low confidence in their financial institutions, compared to 55% of men. This amounts to a huge loss of potential revenue, as women, who are generally more responsible borrowers than men, are more discouraged from using additional financial products.
“Financial services companies haven’t always had to worry about reaching out to individual customers, in particular due to the low switching rate between different providers,” comments Alon Tvina, Managing Director of EMEA for Optimove, the relationship marketing hub.
“But just because a customer hasn’t taken their business elsewhere does not mean banks are offering optimal value to them. To build stronger relationships with clients, banks and insurers will increasingly need to mould their services, and the way they communicate, creating a dialogue tailored to each individual.
“Kantar’s study shows that gender is a big consideration in this, and there are many other differentiating aspects which financial providers can use to understand different types of customer. Account size, spending power and age are major factors that can affect communications. All customers are not the same, and financial institutions cannot take a one-size-fits-all approach to their relationships.
“The Open Banking initiative, with the Second Payment Services Directive coming in next year, will make it much clearer for customers to see which financial service companies are available to them, and make switching providers simpler. The aim is to make the financial services market more competitive, resembling the retail industry much more closely.
“Our research has shown that targeting marketing at more individualised groups of customers, based on their preferences, can raise customer spending in retail by 50%, and these findings may soon become very relevant to banking and insurance too.
“Soon traditional banks and insurers will have to make the most of the data available to them to tailor marketing to their customers, communicating with them in an emotionally-intelligent way to make them feel encouraged and valued as individuals.”