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As mobile financial journeys increase, so do gaps in customer understanding

There’s never been a more urgent time for financial service providers to effectively connect with banking consumers—with bank branches closed and consumers at home, that means going digital. Research mobile banking has risen 50% since the end of 2019.

But digital connectivity proves challenging thanks to mobile-first consumers operating across devices and channels of communication; piecing together data across multiple touchpoints is a difficult task unto itself, and it has only become more challenging with that it’s deprecating third-party cookies in the next two years.

In an increasingly mobile-dominant industry disrupted by an event forcing consumers to stay at home, it stands to reason that banks who get the mobile experience right will increase conversions and lower acquisition costs. A KPMG study showed exactly that: Enhanced mobile messaging decreased media friction by up to 25% and reduced acquisition costs by 21% to 24% for new loans.

Read on for insight into what causes media friction for today’s mobile-first banking consumers, as well as tips to enhance your digital messaging in this new normal.

The lending path to purchase

Consumers are constantly bombarded with generic messaging on their TVs, radios and devices. Although they are more in control of their media experiences than ever before, the advertising blitz is never-ending. In the 1970s, the average consumer was exposed to roughly 500 ads a day; today, that number can range from 4,000 to 10,000. No surface or space is safe from branded messaging.

Lending customers are goal-oriented and high-intention. Once they are ready to shop for a loan, they have endless options at their fingertips to research and compare lenders—and they are accustomed to the seamless and convenient digital onboarding process they see in other industries. For example, consumers can choose from multiple custom cell phone plans, select a new phone and activate service with just a few clicks from the comfort of their homes. They expect the same frictionless experience from their financial providers.

During the awareness and consideration stages, consumers are highly receptive to targeted ads and personalized offers, yet the financial services industry has been slow to deliver. McKinsey & Co. discovered the majority of new banking customers enter the funnel through digital channels, but a suboptimal experience results, with a leakage rate of 90%.

The path to purchase is digitally dominant until the consumer is ready to close the loan. At this stage, even omni-digital consumers often seek personalized information from a bank representative. KPMG found that as many as 25% of these high-intent consumers drop out due to media friction—in many cases, the bank failed to respond to a request for information or offered no convenient way to connect with a representative.


Read more: Forrester Financial Services Spotlight: Approve efficiency and improved satisfaction with identity resolution


 

Sources of media friction

While these friction points occur at every stage and in every channel, they are particularly noticeable on the digital path to purchase, specifically:

  • Messages are not served to the decision-maker
  • Prospect doesn’t see the ad
  • The message is irrelevant to the consumer’s situation
  • The offer is not clear
  • The medium is ineffective at targeting the consumer
  • The message doesn’t make it easy for consumers to check eligibility or get additional information
  • The prospect finds it difficult to take the next step (request information, speak to an agent, complete the application.

According to the KPMG study, media friction at the awareness stage occurs when ads don’t correctly target the decision-maker or aren’t relevant to the prospect’s situation. At the consideration stage, friction is caused by unclear offers and a lack of trust in the medium.

Social media’s influence, in particular, is waning with consumers. The Edelman Trust Barometer survey showed that consumers’ trust in information on social media is at a new low, dropping to just 30% in 2018.

Financial services who still rely on social media marketing are hampered by Facebook’s recent privacy updates, which limit their ability to reach people for credit-related products. This adds considerably to media friction: Banks are unable to target decision-makers with relevant offers or even know with certainty that the ad was seen by the prospect.

As prospects move from consideration to intent, media friction occurs when consumers are unable to easily find additional information, check eligibility, complete an application or contact a representative. Many prospects at this stage attempt to contact the financial institution before purchasing a lending product.

Identity reduces media friction

In the context of FinServ, mobile messaging applies to the entire mobile ecosystem: Surfacing ads and marketing content, the in-app experience, text messaging and notifications, and mobile-optimized email. Leveraging mobile to reduce media friction means harnessing the capabilities of the channel as a whole.

But connecting a customer’s many mobile touchpoints isn’t easy, particularly with Google just announcing its deprecation of third-party cookies in the next two years, making reaching and understanding the average consumer that much harder (unless you go through Google).

How can financial marketers solve for this? Through marketing that is based on customer understanding. Using a solution that is based in real people, not just their cookies or devices, ensures financial brands can deliver the customer-centric experience that overcomes media friction points.

Most organizations recognize that identity is essential to their marketing strategies; our Forrester research shows that 66% of brands have had an identity solution in place for at least a year. However, the majority of them still struggle with maintaining accurate IDs over time and understanding what percentage of their addressable audience is active and reachable.

Consumer-based targeting, lookalike modeling, and high-intent digital signals tied to PII-compliant identity mean banks can reach motivated consumers with clear, customized offers.

Comprehensive identity resolution recognizes individuals across multiple devices and browsers and ensures that targeted messages are served to decision-makers, slicing through the fog of generic ads. Targeted messaging powered by an identity program—one that can handle consistent identifying the right consumers across digital, physical, SMS/text, email, banking app, digital media, mobile and desktop—eliminates mobile friction points and also provides a connected experience for the consumer.

The right identity solution gives financial brands first-party data enriched with third-party data insights in an ECOA-compliant environment, unleashing the power of mobile messaging and reducing ad waste.

Mobile plugs the relevance gap so consumers don’t fall out of the funnel due to messaging that doesn’t apply to their situation. Leveraging mobile’s unique functionality enables on-demand access via click-to-call, click-to-text and chatbots connecting motivated prospects with the information they need to close the deal. This overcomes leakage due to slow response times and streamlines the process for accessing customer service. 

The bottom line

The financial services marketplace is no longer at the branch, it’s in the digital channels. Even before COVID-19, banking consumers were already heavily considering the digital experience on the lending path to purchase. Now, it’s crucial.

To create frictionless digital journeys, brands must optimize the mobile experience. This means understanding who exactly each person is across their various devices and channels of communication—an understanding derived from comprehensive identity resolution.

Interested in learning more about how financial brands fare with identity? Download Forrester’s research.