Banks have never seen transformation happen as quickly as it has since 2020. With new standards set in digital adoption since the pandemic, banks can’t afford to live in the wake of trends—it’s time to look ahead and be ready for what’s next. 

Here are the trends for banks that deserve your attention for the rest of this year and will set you up for a strong 2023.

Bank Trends for 2023

1. Generation Z is too valuable to ignore.

If your bank hasn’t already, it is time—now—to invest marketing dollars in Gen Z (individuals born after 1996). Their future financial power and willingness to spend cannot be ignored. More than any previous generation, GenZ is actively involved in making financial decisions for a more secure future. They’ve been through the 2008 recession and then a pandemic; it’s no wonder they’re seeking financial security.

To gain their attention and loyalty, think about what matters most to them—the global and socioeconomic issues that impact their lives, and the questionable financial futures they face. These are platforms on which to establish authentic messaging that will resonate.

Beyond that, reaching GenZ requires new tactics—gamification, influencer marketing, and invitations for in-person conversations should be integrated with your strategy. 

2. The metaverse is happening. It’s time to face the trend.

McKinsey predicts metaverse worlds could generate up to $5 trillion in impact by 2030. Brands have invested more than $120 billion in the metaverse in the first five months of 2022. 

Banks may question the true potential of the metaverse, but given the brands who’ve invested in it and the technological advances promised, it would behoove every bank to, at the very least, analyze its viability against long-term growth goals.

But hype and allure aside, why should the metaverse even be a consideration for banks?

There are several reasons banks should be thinking about the metaverse:

• Future customer base: We talked about the importance of attracting Gen Z. The subsequent generation, Generation Alpha (individuals born between 2011-2025), should be on your radar as well. They will be the wealthiest, most educated, and most tech-savvy generation in history—and in just a few years, they are going to open bank accounts.
• Gamification: In the same way Web 2.0 made every brand and company a publisher, Web3 (Web 3.0) will force every brand into the entertainment space. Entertainment is a nascent trend for banks, but you can count on it to drive future engagement.
• Brand image: Early adopters are viewed as innovative, cutting edge, and ahead of the curve—qualities people want in their financial institutions.
• Customer service: Face-to-face virtual experiences will offer new levels of convenience for customers while allowing banks to shift away from an FTE in-branch mindset.
• Virtual banking: The metaverse promises “what’s old, is new again.” Imagine customers whom you have only had online/in-app interactions with showing their digital faces in your virtual branch? Welcome back to the world of customer intimacy and relations.

3. Social media storytelling is the cornerstone of acquisition and retention.

Consumers believe brands are more cynical than ever. It is time for some honest brand soul-searching. Do you think customers and potential consumers trust your brand?

To earn trust, banks have to think beyond marketing posts and transition to a narrative  mindset, where moments are strung together, connected across platforms, occur over time, and are delivered authentically. 

A great story is all about showing, not telling. Scrap the ad and tell a tale. Here are a few tips to consider when crafting your story:

• You will sell more products if you stop trying to sell products.
• Incorporate empathy by thinking about real life when you produce content; skip the phony or idealistic narrative.
• Seventy-three percent of consumers say brands must act now for the good of society and the planet, so highlight your commitment to corporate social responsibility (CSR).
• Build engagement opportunities into your stories; there is a strong trend around interactivity across digital touchpoints. 
• Think carefully about your channels and the content that goes on each. TikTok viewers are in a different mindset than someone browsing LinkedIn.
• Always create custom audiences. Sharing the wrong messages to an audience can tarnish your brand.
• Content should be bite-sized. You have to determine easily digestible ways to make an instantaneous impact.

4. Building on the aforementioned theme of interactivity, adding helpful tools to your bank’s website will positively impact customer experience.

Modern design grows antiquated quickly. Utility, however, is always in style for websites. 

Interactive tools can help your bank’s customers understand your offerings. A few ideas for interactive tools—all of which Phase2 can help ideate, design, and develop—include:

• Credit card comparison tools
• Product recommendation pathways
• Account comparison tables
• Real-time loan rate tables
• Financial calculators
  • Mortgage calculator
  • Rent vs. buy calculator
  • Home affordability calculator
  • Savings and retirement calculator
  • Loan calculator (auto, equipment, home repair, etc.)
  • Debt payoff calculator

5. Customer data platform (CDP) implementations will help banks compete with fintechs and rivals.

Bank marketers struggle to leverage integrated customer data to improve customer acquisition and conversion rates. CDPs make real-time data accessible and actionable, giving marketing teams the ability to resolve identities, present relevant stories, and personalize product recommendations.

As customers navigate a bank’s product ecosystem—jumping from online banking to an in-app transaction to a question about lowering their mortgage rate—it’s imperative for bank product and marketing teams to analyze those touchpoints. CDPs can help identify opportunities to improve cohesion and customer experience within products, while bringing forth ideas for product strategy and prioritization. 

If your bank’s analytics posture is antiquated, and particularly if you’re failing to track users across browsers, mobile devices, and other connected devices to devise person-based insights or campaigns, then a CDP could be a technology to explore.

6. Artificial intelligence is not the future—it’s the present.

As consumer adoption of smart technologies and artificial intelligence (AI) grows, banks must identify investment-worthy use cases for the technology advancements. The approach to getting started isn’t technology-first, though; looking at Bank of America’s Erica and trying to emulate their strategy will only leave you in the dust (and broke). Instead, start by identifying your pain points. 

Banks are using AI to solve challenges in risk management, credit card fraud detection, cybersecurity, new product development, customer service, customer acquisition, and staff turnover. If AI is very new to your bank, Phase2 can brainstorm ideas around any of these challenge areas with you. 

Consumers are using AI to access and manage their finances. The onset of robo advisors, availability of 24/7 support, automated account alerts, and incorporation of natural language processing (NLP) text/SMS services, are part of the revolution.

7. The demand for self-service will continue to increase—don’t ignore it.

In 2022, the number of digital bankers will surpass 200 million. 

Banking leaders have to ensure their institution is equipped to serve customers across all platforms; convenience for customers cannot be undervalued. Access to services, products, support, and information must be readily available in all channels in order to cater to a customer’s digital preferences.

There is long-term value for banks that invest in digital self-service now. The ability to decrease high-cost/low-value transactions, satisfy modern customers, and strategically reshape your branch footprint all have substantial returns.

To support the growing demand for digital self-service banking, your institution should be designing processes and platforms for:

• A super app with a host of services and support, driven through a premier user experience that can rival any fintech
• An easy-to-find service portal, rich with content, inside the online banking platform—something that goes beyond FAQs and even uses AI-driven search to understand the nature and intent of a search query
• Video banking incorporated into ITMs (interactive teller machines), Universal Associates, and ATMs with advanced transaction capabilities
• Extended customer service hours and the ability to easily contact customer support from mobile devices
• Chatbots and live chat agents with 24/7 availability

Finally … 

When the dust from this pandemic fully settles, there are going to be clear winners and losers in the world of banking. The winners will be those that rethink digital opportunities and position themselves for the customers of tomorrow.

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