How Big Banks can compete with Big Tech

/ 3 January 2024

Revolut, Monzo, and Starling have upended traditional lending, and now Amazon, Apple, and Meta want a slice of the action. In 2024, this threat is set to materialise as more Big Tech brands draw on their global reach and resources – not to mention consumer data – to diminish the banks’ monopoly power.

For traditional banks, this signals a clear and present challenge: evolve or risk losing significant market share. 

This blog post is your guide to fighting back, armed with innovative marketing strategies that can help traditional lenders to not just compete, but thrive.

What BigTech brings to the table

The financial sector is no stranger to competition, teeming with well-established players offering a wide range of products and services. In such a crowded market, new entrants like Big Tech firms face the daunting task of differentiating themselves. 

But what Big Tech lacks in industry tenure, it makes up for in seamless user experiences, robust data analytics, and global brand power. They offer the convenience and speed that modern customers crave but might not always find with traditional financial services.

For example, it will soon feel the norm to send money via smartphones to known contacts without leaving a messaging or social media app or logging into a bank account. 

The bottom line: Understanding the edge Big Tech has can guide traditional banks in formulating effective counter-strategies.

Marketing strategies to compete with Big Tech

With the right strategies, Big Banks (and other traditional lenders) can compete effectively. Here’s our round-up of the core strategies you can use, plus real-life examples:

Strategy 1: Personalisation at scale

In today’s competitive landscape, a generic approach just won’t cut it. Personalisation is key. The good news is that Big Banks have the data to make it happen. Plus, sophisticated tools and game mechanics can be harnessed to create highly personalised customer journeys.

For instance, consider a customer who frequently travels abroad. Banks could offer individual real-time currency exchange rates or even special overseas spending perks. Another example is identifying customers who are nearing major life events, like buying a home. Tailored mortgage or insurance offers could be sent their way, precisely when they’re most likely to need them.

Side note: It’s not just about slapping on a “Recommended for You” tag. It’s about understanding your customer’s needs and preferences so deeply that your services seamlessly integrate into their lives, much like how Big Tech operates. Zero-party data can play a key role here. (Psst. here’s everything you need to know about zero-party data)

Personalisation is a key part of American Express’ business model. For their B2C customers, this includes personalised videos which accompany their credit card statements every month. 

The video helps customers learn new ways to manage their account, while sharing financial tips and tricks. 

Strategy 2: Gamification

Rewards and loyalty programmes are good, but gamification takes customer engagement to a whole new level. It’s more than earning points; it’s about creating an experience that’s genuinely enjoyable, immersive, and engaging. (Something Big Tech does very well).

There are plenty of examples of how to bring gamification to banking. Picture this: a mobile banking app where customers can unlock features or earn rewards through interactive challenges related to saving or investing. Not only does this make financial management fun, but it also educates the user in the process.

Gamification serves a dual purpose—it keeps users engaged while also promoting healthy financial behaviour, making it a key tool in the arsenal against Big Tech.

For example, NatWest created a gamification campaign to help customers learn about ring-fencing by answering 16 critical questions and collecting ‘missing’ belongings along the way. 

📙Read more: Gamification in marketing: The complete playbook (+ examples)

Strategy 3: Content marketing 

In a world where consumers are increasingly wary of “salesy” messages, the role of content marketing has never been more critical. Forget about pushing your products or services. Instead, focus on producing non-promotional, value-added content that addresses the real challenges your customers face.

For example, create detailed guides on understanding credit scores or offer webinars on financial planning. By solving problems or enhancing understanding, you build invaluable trust. Over time, this positions your brand as an authority that people turn to when they’re ready to make financial decisions.

The aim is to transition from being just another bank to becoming an indispensable financial resource.

For example, TD Bank teaches customers about personal investments through webinars and how-to videos. They even won the 2022 Content Marketing Award for creating TD Stories – a digital hub where TD Bank provides financial tips and advice with thought leadership from the company’s executives. 

Strategy 4: Seamless digital experience

If there’s one thing Big Tech knows how to do well, it’s creating frictionless digital experiences. Traditional banks need to catch up, and fast. Your digital platforms should offer intuitive navigation, quick load times, and easy-to-find information.

Consider simplifying the account creation process or streamlining the mobile banking app. Each interaction should leave the customer feeling satisfied, not frustrated.

Also, think about how you can make the digital experience more engaging with gamification.

By optimising digital touchpoints, you enhance customer satisfaction, fostering long-term loyalty and trust that can be your armour against Big Tech’s takeover.

Strategy 5: Community engagement

Trust doesn’t build overnight, and in the financial sector, it’s gold. Instead of traditional advertising, consider community engagement as a way to connect on a grassroots level.

Host events, sponsor charity drives, or create online forums where customers can share financial tips.

Community engagement doesn’t have to be complicated. Even a well-moderated Twitter Q&A session can provide value, answering common questions and debunking financial myths.

The goal here is simple: be more than a service provider. Be a community member that people know, respect, and trust.

One example is Prudential’s novel social media strategy. The company developed a ‘Thought Leader of The Week’ campaign, which includes interviews, whitepaper, and articles from senior staff. 

Stay ahead of Big Tech disruption

Big Tech’s foray into financial services poses a serious challenge, but it’s far from a death sentence for traditional banks. By adopting strategies like personalisation, gamification, quality content marketing, seamless digital experiences, and community engagement, traditional financial institutions can hold their ground.

These approaches don’t just serve as a defence mechanism. They set the stage for proactive growth, customer loyalty, and a robust brand identity that can effectively compete with Big Tech’s appeal.

Bottom line: It’s not about keeping pace; it’s about setting it.

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