Growing consumer expectations for personalization. Fintech companies stealing market share. Increased privacy and regulatory restrictions.
These growing challenges present a lot of opportunity if you focus on one foundational element: identity resolution. But what is identity resolution? True identity resolution fuels personalized messages at the individual level and delivers them seamless across devices, apps and browsers. Identity resolution helps brands deliver the right message to attract and keep customers from steering towards competitors and even ensures that opt-out or opt-in preferences are maintained for individual customers. But mastering identity resolution can also be the most difficult piece to get right.
To understand how financial marketers are doing with identity resolution, we commissioned Forrester Consulting to assess how brands are using identity resolution to better their marketing. In the Forrester identity research, they surveyed more than 200 brand marketers across industries—including financial services—on their identity resolution strategies and how they apply to their marketing efforts.
Looking at the responses from financial services marketers, Forrester’s findings indicate that many financial brands’ identity resolutions programs are not set up to sufficiently encapsulate the entire customer journey. These identity resolution programs also fail to truly measure business and marketing performance—which has a huge impact on financial marketers’ bottom line.
Below, we share a recap of how financial services marketers responded in the research, noting the best opportunities for growth and how better identity resolution can help.
Download the Forrester research: Achieve Efficiency And Improved Satisfaction With Identity Resolution: A Spotlight On Financial Services
Financial CMOs are wasting marketing spend
CMOs globally are set to increase their digital marketing budgets to over $146 billion by 2023. And the US financial services and insurance industry will spend more on digital marketing than any other industry between now and 2023.
But despite this massive investment, marketers still often find themselves unsure of the efficacy of their marketing efforts. In other words, marketers are spending big bucks on digital, but they can’t account for performance. This is a big problem. Following the old axiom of not knowing which half of your marketing is working and which isn’t, too much is at stake for financial CMOs to be wasting up to $73 billion on marketing that isn’t working for them.
Identity resolution is key to eliminating waste and measuring success
Robust identity resolution is key to understanding performance and eliminating waste. Unfortunately, our research indicates that financial services marketers have more issues in this area than other industries.
Let’s take a look at a fictional friend named Katy. Katy’s bank knows she is a good customer and wants to upgrade her to a premium account, so they start sending her emails about the benefits of upgrading. At the same time, the bank is executing an outbound acquisition campaign that is focused on reaching new eligible candidates—Katy also receives this message on her phone. Even though she is already a customer, her bank is talking to her as a prospect because they can’t accurately connect the data points across Katy’s touch points.
Katy’s example illustrates a problem with accuracy—one of the five pillars of identity resolution. Her bank is not messaging the correct customer across devices, browsers and touch points. Poor accuracy results in both a poor customer experience and wasted spend. Despite broad adoption of identity resolution strategies, our study found that financial services companies face significant challenges in each of the five pillars of identity resolution, with accuracy right at the top of the list.
In fact, our research shows that only 4 in 10 firms are very confident that their current customer ID profiles are complete and accurate. As a result, fewer than half are very confident they’ll be able to retarget this year’s customers over the coming two years. A lack of full confidence in customer ID profiles is likely to lead to wasted spend and an inability to measure channel success.
With a successful data management platform, financial brands can more effectively leverage the most accurate, complete customer data points available to deliver one-to-one customer engagement, fully measure performance, and therefore eliminate wasted marketing spend.
Bad resolution identity also means lifetime loss of dollars
To grow deeper relationships with customers, financial services marketers need to reach qualified people in meaningful ways at the most opportune moments. With a solid identity resolutions program, connected to email, loyalty and outbound digital campaigns, they can manage the full financial lifecycle needs of each customer. Not only does this help engage new in-market prospects, it also helps to stop customer attrition, increase engagement and be a better financial partner to customers over their lifetimes.
That being said, Forrester’s research indicates:
- 52% of financial services marketers struggle to determine the right audiences for online campaigns
- 46% struggle with optimizing online campaigns
- 52% can’t prove marketing performance
In other words, about half of financial brands can’t find the right people to talk to, don’t know how to improve, and can’t prove that anything’s working.
This is a missed opportunity to grow, cross-sell and retain valuable customers—which could result in a significant lifetime loss of dollars. Forrester offers the example of investment firms: they’re fighting for roughly $30 trillion in new assets for individuals at the same time as “robo-advisors” land on the scene. Identity resolution helps marketers reach the right individuals in real time with the offers they’re looking for, driving customers to the next action. By serving the in-the-moment needs of the customer, identity resolution can help financial services brands demonstrate their differentiation and help achieve their top business objective for the year (according to the study): improve customer satisfaction (46%).
When it comes down to it, financial brands must actively support the individual financial lifecycle stage of all individual customers—or risk losing them to one of a growing number of competitors.
Don’t forget privacy and compliance
Let’s pretend another friend John is receiving offers from his auto insurer’s partners—even though he has opted out of data-sharing with partners. His wife Elaine is receiving messaging from her bank that is so highly personalized that it includes information that is out of compliance with regulations like GDPR or the Equal Credit Opportunity Act.
Both of these scenarios mean the brand has failed at privacy and compliance, another of the five pillars of identity resolution. It’s all about ensuring that opt-outs and customer privacy controls are in place. While only half of financial firms say they struggle with this pillar, it’s significantly higher than the average company we surveyed (+10). This is a problem because:
- Customer preference management ranked as the top use case for identity resolution in financial services.
- This is a vertical with higher regulatory hurdles than most, creating greater legal risk.
- Trust and customer advocacy go hand-in-hand—and customer advocacy is a key driver of loyalty at financial services brands.
There’s no way around it: financial brands must get privacy right. Robust identity resolution is the best path forward.
How to confidently move forward with resolution of identity
The good news is that wasted spend, lost lifetime dollars and privacy infractions are not a forgone conclusion. These challenges also present opportunities for financial brands to excel.
Forrester’s identity resolution research offers recommendations and solutions for improving your identity resolutions program—so you can both take control of your marketing spend and impress the heck out of your customers at every interaction, throughout their interactions with your brand.