Our Financial Services Practice

The Challenges Facing the Financial Services Industry

The three greatest challenges for financial services marketers—whether they provides insurance, banking, wealth management—are: understanding the needs of your customers and prospective consumers; being able to position your brand(s) in a differentiated and unique way; and consistently developing new products and services that address your customers changing needs.

Let’s take them one at a time.

The first challenge—understanding your customers—requires you to go beyond the industry accepted classifications such as age, account balances and household income. You need to gain insights into customers’ attitudes, behaviors and future intentions as well,

When you have both the quantitative and qualitative data it becomes relatively easy to prioritize and target worthwhile market segments—and what you find may surprise you.

For example, you may discover that segments that you thought were attractive (such as current customers) may not be profitable to serve, while other seemingly less attractive groups (such as the newly-immigrated) could be seen as a worthwhile investment for the long term.

Every firm wants to access people with significant assets to invest, but by creating marketing strategies that treat everyone the same, you may the opportunity to best address their individual financial needs.

The second challenge—differentiating your brand—is more difficult in the financial services industry than in some others, since in many cases there are few distinguishing features or benefits to highlight. To oversimplify, one company’s CD is much like another’s.

Industry leaders, however, are able to find a way to distinguish their brands, make them memorable, and carve out a niche in the otherwise commoditized marketplace through such things as faster transaction times or providing more convenient online account access.

Finally, companies have to innovate to constantly respond to customer changing needs. For example, consumers are increasingly fed up with what they view as a lack of privacy protection. Firms that have addressed this need with better security have risen to the top as Citicard did when they showed 94% increase in the volume of transactions after launching their Virtual Account Number program CAN YOU EXPLAIN WHAT THIS IS IN A PHRASE?.

Markitecture believes that success in the financial services industry only can come from a) dedicating the time and effort to developing a sophisticated process for understanding your most profitable customers and having done that, b) targeting those customers precisely with new and/or repositioned offerings.