Digital transformation and competition from fintechs (financial technology) has profoundly changed the financial services sector over the past decade. Today, the AI revolution is unleashing further waves of innovation, allowing banks, insurers and other financial institutions to reinvent how services are designed, built and delivered. But amid this technological revolution a fundamental challenge persists: financial services organisations are still struggling to engage with customers in a timely, relevant and trusted way.
Braze is a leading customer engagement platform that allows marketers to creatively engage with customers in real time, across channels from one platform. Recent research by the company found that 50% of consumers rank trust as their top factor in choosing a financial provider. Yet only 15% of marketing executives prioritise it today.
This ‘trust gap’ could have a major impact on financial institutions’ ability to attract and retain customers – particularly in an era of AI disruption, high-profile data breaches and ongoing competition from fintechs. As financial products become more commoditised, customer experience also becomes even more important for competitive advantage.
Making banks competitive
“Banks are starting to look alike,” says Erin Bankaitis, director of industry marketing and lead for financial services at Braze. “They may have different user interfaces or slightly different features, but checking accounts often look similar from one provider to another. With that in mind, how do you differentiate? It comes down to the customer experience.”
While some banks have upgraded their systems in an effort to improve customer experiences and compete with digital challengers, increasingly they’re no longer judged purely against competitors in the financial sector. Instead, they’re measured against every other digital experience enjoyed by consumers today – and often found wanting.
“Customer engagement expectations have been evolving for years across all industries and the bar keeps being raised,” says Bankaitis. “You’re not just competing against other banks – you’re competing against any company that provides any type of service.”
Unpacking the trust gap
Here’s the thing though: financial institutions have a fundamental trust advantage over companies in other sectors. Unlike streaming services or car hire firms, for example, they play a key role in one of the most important – and personal – areas of our lives: how we access, invest and spend our money.
“Even when fintechs were growing in trust and popularity, the reality for quite some time was that people’s primary bank was still a larger institution,” says Bankaitis.
There is definitely a gap between how financial services companies think they’re doing and how customers actually perceive their efforts
This arguably created a degree of complacency around customer engagement, which some financial institutions are trying to address through digital transformation and more intelligent marketing efforts. Others, however, are still overestimating how well their messaging resonates with consumers.
In fact, Braze found that an astounding 82% of financial services companies believe their clients are satisfied with their messaging. However, only 41% of consumers agree, hinting at a serious disconnect.
“There is definitely a gap between how financial services companies think they’re doing and how customers actually perceive their efforts,” says Bankaitis.
This is evident in banks’ messaging about data security. Having worked at a major bank, Bankaitis is well aware of the “tremendous time, effort, resources and importance” they invest in adhering to regulatory standards around sensitive data. “Where they can improve is in communicating to customers how they’re keeping their data safe,” she says.
“My mantra is: ‘no communication, no credibility.’ A bank might be doing a lot in the background, but customers don’t necessarily know that. So being proactive in communicating what’s happening behind the scenes can help to develop trust.”
Tackling the data challenge
A modern customer engagement platform and intelligent use of data and AI can help financial services companies communicate fraud alerts, security updates and compliance notifications effectively. But to build trust, marketing teams need to be empowered to deliver consistent communication across all customer channels.
“The role of marketing at financial institutions has always been critical,” says Bankaitis. “But I think the importance they play in the overall growth picture and establishing trust is more crucial than ever.”
Despite this, outdated martech (marketing technology) stacks often limit opportunities for real-time engagement, personalised messaging and more intelligent use of customer data. For instance, 70% of respondents to Braze’s Trust at every Touchpoint survey didn’t have a unified solution for their data and channels. In addition, 33% said they’re orchestrating customer experiences with multiple tools, while a worrying 17% rely on single-channel solutions to reach customers.
It’s true that delivering highly personalised messaging at the right time, on the right channel, requires a thoughtful, secure approach in a highly regulated sector. But financial services companies also need to overcome their fears around data privacy and take a more strategic approach to how they collect, analyse and utilise customer data for engagement.
“Customers are surprisingly willing to share their data,” says Bankaitis. “There’s personally identifiable information that must be secure, but there’s also data around preferences, goals and reasons for using a platform.”
Given that these organisations possess some of the richest data sets around, failure to properly make use of it for customer engagement seems like a serious oversight. Indeed, regardless of whether financial institutions have information on retirement plans, insurance policies or green investments, not acting on what this data signals about the customer is really a “huge missed opportunity,” says Bankaitis.
“Customer engagement is about making sense of all these data points, bringing them together, and sending the right message to the right person at the right time at an individual level,” she explains. “If you can interact at key moments and really help people, that can create a huge uplift in customer relationships and long-term loyalty.”
However, she adds that: “if you’re asking for information from a customer, there needs to be an incredibly strong value exchange. This should be evident from the first interaction the customer has with the company.”
Another important element is giving customers more control over their data. “A great strategy for banks would be not only communicating how customer data is being used, but also empowering customers to make choices about their data usage – then showing through clear communication that those preferences have been honoured,” says Bankaitis.
Organising around the customer
Strong organisational alignment around the customer is also essential for delivering personalised and trusted messaging. “From a customer engagement perspective, the most important thing is ensuring product, marketing, engineering, and ideally branding and creative are all working together,” Bankaitis says.
“In larger companies, everything is often siloed and segmented by teams, channels – or even formed around certain KPIs (key performance indicators) or metrics. But if you don’t organise and consolidate around the customer, you’re at a disadvantage.”
She believes it is particularly important that the onboarding and activation journey delivers an excellent customer experience. “It’s your only chance to make a great first impression,” she explains. “If you drop the ball there, it sets the tone for the rest of the relationship.”
Many legacy banks are still behind the curve here. “Digital-first fintechs typically have smoother onboarding and activation experiences compared to legacy banks, where opening an account might take some time,” says Bankaitis.
No one likes to have products pushed on them; they prefer to be guided toward actions based on what they want at the time
So what can legacy banks do to improve? “You want to get somebody set up so that they’re primed to become a loyal, happy customer. This could include agreeing to privacy regulations or setting up security measures like two-factor authentication. But it could also involve more engaging activities like setting up a savings goal,” Bankaitis explains.
Once the customer has been successfully onboarded, banks need to focus on ensuring every following interaction delivers on customer needs rather than simply pushing them toward more products and services. “No one likes to have products pushed on them; they prefer to be guided toward actions based on what they want at the time,” says Bankaitis.
“For example, if I open an account and immediately start using financial calculators to determine what kind of home I can afford, or if I’m trying to understand how to improve my credit score, that data should directly inform the next best interaction – which is very different from the next best product.”
Braze enables the kind of real-time, event-based messaging that can help customers find products that truly meet their needs. It also helps banks to deliver genuinely valuable guidance rather than simply selling to the customer, which is crucial for developing these trusted relationships.
Transparency, especially during challenging circumstances, can also significantly accelerate trust formation. For example, during the Covid-19 pandemic, banks that proactively communicated interest rate changes and customer support options saw increased loyalty, while others faced backlash for delayed responses.
In fact, one of the most significant opportunities for financial institutions today could lie in reclaiming their trusted advisor role. Instead of offering credit products to low-credit consumers, for example, they could build trust by providing educational tools and proactive credit improvement notifications.
“Across the world, some people have high financial literacy, but most do not,” says Bankaitis. “There’s a huge opportunity for companies to go back to basics and be that advisor – as we once had with branches – educating customers on options, explaining pros and cons, and offering guidance on topics like improving credit scores.” She adds that: “If banks provide personalised paths based on individual circumstances, for example, many doors will open in terms of trust.”
Companies that build these kinds of transparent, value-driven relationships with their customers will ultimately be positioned not only for near-term differentiation, but sustainable growth and long-term competitiveness. “They need to understand that trust takes time to build,” Bankaitis says in summary. “And you build trust not by pushing products, but by understanding your customers and sending helpful, meaningful communications.”
For more information, visit braze.com
Digital transformation and competition from fintechs (financial technology) has profoundly changed the financial services sector over the past decade. Today, the AI revolution is unleashing further waves of innovation, allowing banks, insurers and other financial institutions to reinvent how services are designed, built and delivered. But amid this technological revolution a fundamental challenge persists: financial services organisations are still struggling to engage with customers in a timely, relevant and trusted way.
Braze is a leading customer engagement platform that allows marketers to creatively engage with customers in real time, across channels from one platform. Recent research by the company found that 50% of consumers rank trust as their top factor in choosing a financial provider. Yet only 15% of marketing executives prioritise it today.
This ‘trust gap’ could have a major impact on financial institutions’ ability to attract and retain customers – particularly in an era of AI disruption, high-profile data breaches and ongoing competition from fintechs. As financial products become more commoditised, customer experience also becomes even more important for competitive advantage.
