This doesn’t mean that the traditional will die at the hands of the new. It means that the monumental changes in technology, demographics, customer expectations, regulation and operating models where competitive reach is no longer determined by branches or office will demand agility, transparency and innovation to remain relevant, and arguably, survive.

In the last 5 years, the ‘neobanks’ such as Monzo, Revolut and Starling have changed the game with new interfaces, mobile tools and data,  indeed according to AT Kearney’s research, European ‘neobanks’ customer base has grown by more than 15 million since 2011. On the other hand, retail banks’ customer base has declined by 2 million. It is projected that by 2023, Europe’s ‘neobanks’ will win up to 85 million customers, reaching over 20% of the population over the age of 14. With the pace of change as it is, nobody can predict the future but the challenges are clear – the question is, how are FS institutions going to meet them and thrive in a highly exciting and opportunistic era?

At Vivaldi, we understand the intrinsic bond between business and brand and how to succeed in this age of disruption. Brands and businesses need a new roadmap, one that harnesses technology and data to connect more deeply with customers, and rethink how to work within the larger ecosystem to create impact in times of change. As such, here are 3 areas we believe FS should consider to take advantage of present opportunities:

1) BE MORE (CAREFULLY) HUMAN CENTRED

Being customer centric isn’t just about providing great products or great customer service, it’s about creating a culture that lives and breathes your customers and intrinsically understands their needs and wants. Forrester recently found that brands that have superior customer experience bring in 5.7 times more revenue than their competitors. Companies that invest in customer experience win new (and more importantly retain and grow) existing customers especially when ease of switching suppliers is increasingly automated and simple.

These companies need to place data and insights at the heart of their business to really get to know their customers, what they want and what they value. According to the World Retail Banking Report, the key elements customers look for in finance are centred around relevance and simplicity they are looking for lower costs, ease of use and faster service and better communications. Simple, right?

This means that finance companies need to consider the creation of tools to help manage money more effectively based around lifestyle choices including the integration into people’s lives including  elements such as voice, more effective apps and chatbots. However, customer data must be used responsibly. Data security and data privacy are paramount in customer expectations. But this also presents a ‘Catch 22’ –  Whilst 41% want data collected for greater convenience and to prevent fraud, there is also concern around the collection and retention of personal data, IBMX says that ‘FS and insurance are the most targeted areas of business for cyber attacks over the last 3 years’.

Great examples of financial services companies embracing this approach include Citizens, who map the customer journey and predict what customers will need next, Ally Bank ,who partner with other digitally minded companies to provide convenient end-to-end customer solutions and Charles Schwab who leverage data to understand customers, track trends and changes and Discover who combine AI with strong human interaction to predict when customers will need financial help.

How can Vivaldi help?:

Talk to us about how…. we can help you put the customer is at the heart of your thinking and your methodologies – understanding what they want and more importantly don’t want is imperative. Being ‘customer obsessed’, focusing on customers and declaring a devotion to customer centricity plays a key part in the ‘Customer centricity PLUS mindset’ we identify in our platformization study

In addition, working on organisation and culture also engenders this approach. Vivaldi works to transform businesses from the inside out by conducting cubicle anthropologies, designing and rolling out employee engagement programs, facilitating action-learning workshops and building marketing capabilities and teams.

2) PEAK FINTECH OR OPPORTUNITIES ABOUND ?

According to Shachar Bialick, the founder and CEO of Curve, there are now more than 10,000 Fintech startups around the world, indeed many are calling that we have reached ‘peak Fintech’ and that the industry needs to enter a period of maturation and integration in order to survive. That said, this is also driving huge developments in the industry. According to EY, 37% of Global FS institutions claim to have a Fintech product available, 22% claim they have a pilot, and 40% are at R&D stage. This spans a huge variety of services ranging from money transfers, payments and insurance, to savings, investments, budgeting, finance planning and borrowing.

So where to focus? Interestingly, often the fastest growing and changing economies in the World show the way for the future. Africa is an excellent case in point where mobile phones are increasingly relied upon to send and receive money. In fact, 10% of GDP in transactions now occurs through mobile, which has given rise to a huge growth in companies such as MPesa.

Mobile is also at the heart of our becoming an increasingly cashless society using mobile wallets, cashless cards and digital payment options. Some countries are leading the way in this – Vietnam has 10% cash target for all transactions by 2020 (Philippines set 20%) however, in the Western World, this move is marked by demographic patterns, with the Pew Research Center finding that those with a household income of $75,000 or more, are more than twice as likely as those earning less than $30,000 a year to say they do not make any purchases using cash in a typical week (41% vs. 18%).

A large part of the Fintech revolution is driven by Blockchain technology and whilst the promise is yet to be fully realised, it is increasingly used daily across the world, even by Facebook, whose Libra product shows that the mainstream is almost here. Existing trust issues caused by bitcoin and hacking incidents are offset by the opportunity to create a cheaper infrastructure, more speed and increased protections – like  IP protection and combating fraud and cyber crime. Transparency and ease of tracking will enhance areas including FS settlement across the board, part ownership of items such as cars / houses (which is on the increase), as well as more effective encryption of data and blockchain, which is being used to help solve sustainability and low-carbon emissions tracking.

Interestingly, Fintech (and in particular blockchain technology) has itself created a rival to many mainstream FS products that use the very same foundation to create a platform for people and businesses to engage with each other and transact. The sharing economy, demonstrated through companies such as Lending Club, Zopa, Prosper and SmartyPig, is already reshaping the industry through peer to peer lending, social payments, crowdfunding and P2P insurance, and this will only become more prevalent as it requires less cost to facilitate and therefore provides greater equality of opportunity. The challenge for FS institutions is that this disruptive nature and its disintermediation means they stop being the intermediary and therefore need to reconsider their space in the ecosystem.

How can Vivaldi help?:

Talk to us about how…..the biggest barrier to implementation of many Fintech opportunities is interoperability and unification of systems across financial institutions. If this unification can be achieved the network effect can become exponential. At Vivaldi, we can help you through our focus on platform economics that harnesses technology and data to connect more deeply with customers and to rethink how to work within the larger ecosystem. Our proprietary platform thinking methodology can help show you how to reframe challenges and opportunities from the customer’s perspective by leveraging the dynamics of a customer-first & digital-first world.

 3) CONSIDER THE IMPORTANCE OF BRAND AND HAVING A PURPOSE

In late 2019, The Business Roundtable – a group of CEOs from major U.S. corporations (including many FS institutions) issued a statement with a new definition of the ‘purpose of a corporation’ dropping the age-old notion that corporations function first and foremost to serve their shareholders and maximise profits, but instead that it should be about investing in employees, delivering value to customers, dealing ethically with suppliers and supporting outside communities. In an industry that has traditionally focused on shareholder value, this has big implications for financial institutions and most importantly their wider brand.

One of the signatories, BlackRock’s chief, Larry Fink, wrote in his 2019 annual letter to shareholders that “Purpose is not the sole pursuit of profits but the animating force for achieving them.” This is a big step and provides a new paradigm and platform from financial services companies can build and thrive, however it can be a real challenge to build a strong brand in the commoditised, regulated and often homogenised world of financial services. As products and solutions are often very similar across asset managers, corporate banks and pensions providers, marketers are looking to brand purpose as their differentiator. But what exactly does that mean, and can it be considered a silver bullet?

Deutsche Bank’s initiative  #whybanksmatter  looks at the charges happening around us and what they mean for bank’s role in the economy, the planet and the platform revolution. This includes how banks can become valuable partners for businesses, households and investors focusing on what is changing, what needs to change and how banks can help make great things happen – including investing in people and projects that make a positive difference in the world.

The most important aspect is that FS institutions need to avoid ‘woke washing’ by using the language and imagery of worthy causes to increase sales, without backing up this rhetoric with action. Companies need to ‘walk the talk’ and ensure that there is a strong employee engagement. It is fundamental that employees understand the brand purpose and their role in delivering this purpose, from executives down to customer service staff, and connecting to an idea of mission is hugely strong in motivating employees, inspiring new and existing customers and in setting the bar for all partners.

To ensure that the purpose is clear and becomes an ongoing commitment companies also need to communicate this consistently and repeatedly and integrate into all products and initiatives including physical and digital interactions to increase mental availability as well as ultimately build into company metrics of success.

How can Vivaldi help?

Talk to us about how……For over 20 years Vivaldi have been an impact advisor to the C Suite by helping them define the bond between business and brand today. Vivaldi’s strategy-to-action approach helps build strong brands with purpose that operate at the speed of business today. However, strategy does not drive growth if it isn’t implemented  in the right way – from customer journey mapping to content marketing to campaign development, to transformation through digital product design and platform development, the world’s most interesting companies work with Vivaldi to create and grow brands with purpose.

So in the revolution or evolution debate which would you choose? If you would like to chat more about this or hear more about how we can help you then please get in touch directly ARoberts@vivaldigroup.com / https://www.linkedin.com/in/andrewjroberts/

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But a perfect storm of turbulent times combined with a heady rush of data meant marketeers chased short term sales – because without immediate results they feared there was NO future.

It also had the lucky side effect of helping them be accountable to the marketing cynics at board level. Often they over-invested against their better judgement – resenting big players like Google holding them to ransom to bid on their own names or lose it to their competitors.

So in 2020 let’s stop criticising CMO’s for falling into the performance marketing trap and pitting brand and creativity against digital.

The Binet and Field 60:40 brand to sales investment ratio is great – it is widely publicised but now is the time for action. In 2020 CMO’s need to be planning how to move forward with this information and make it work for their business.

Over the years many attempts have been made to get it right  – until around 2009 brand and direct response teams often sat separately and worked in silos with different agencies. Then it was all about integration and silos were removed, but a more complex media and agency mix meant a lot of mixing and matching. Now data allows us to see how customers really react and it is as much emotional as functional – a mix of brand and product messages which varies by segment, category and occasion. Brand work uplifts performance marketing results and performance ads need creativity, because at the end of the day everything a company does affects how people see the brand.  

Silos have long been dead. In the last few years a new era of brand and performance working together, powered by data which integrates and measures both, has begun. This new era means CMO’s need a new type of partner – one who is as passionate about brands and creativity as they are about data and performance. A team that is not siloed but has brand strategists sat with creatives working alongside performance media managers. Thinkers and doers from different backgrounds collaborating, working on both a brands future as well as the here and now with only one person at its heart the customer. To keep you centred there are 3 principles which will help you seize the opportunity analytics, customer experience design and creativity offer…

Data is table stakes – it is not what you have but what you do with what you have that matters. With so much data available there is a need for smart people to decode it, to really understand triggers in a path to purchase and emotional reactions and use it to inspire media and creativity TOGETHER.

Everything is brand – take care with EVERYTHING that you create because every single interaction contributes to brand perception. And everything means everything-  the language in search – from a link click ad in social to a promotional sales poster, and if you have times when you can only afford to do sales-focused work, remember to emotionally engage.

Measure what matters – do not judge everything by the same yardstick or get lost in multiple metrics without meaning. Work out the pieces in the mix and develop them with a plan of what success looks like now and in the future. Define ideal handoffs and the long term measures that need to be tracked, and build an understanding of this information widely – with creatives and the CEO.

A new era is upon us, but uncertainty and tight times may not be over quite yet. There’s definitely a case to be made for a more holistic marketing function with respected representation at board level and proving commercial success is key to achieving this. However, CMO’s should take things a step further – educating everyone in the organisation on the relationship between marketing principles and the dynamics of trade. If we accept customer-first thinking we can all move on from the brand v’s performance debate.

If you would like to know more about how we can help you then please download our Guide or get in touch directly with Jane via email Jhovey@vivaldigroup.com or LinkedIn. 

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Our CEO Erich Joachimsthaler spoke with CNN Business in October 2018 to discuss Volkswagen transforming Bugatti into a modern, 21st-century brand. Read the full article here.

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