Shop for a new car, a cell phone plan, a cable TV package or a major appliance these days and you’ll find one consistent and very successful product strategy–Good/Better/Best (GBB).
When Beneficial Bank, well known as one of the oldest banks in Philadelphia, Pennsylvania, set out to revamp its brand in 2013, they also shifted their entire culture to be more relevant to the Millennial audience. By deeply defining this group of people through consumer research, introducing purposeful creative focused on serving Millennials’ financial needs and working to change the mindset of every employee from top to bottom, they created a brand that enhanced their most traditional values and gained the attention of this new, valuable audience.
Recent report from Accenture shows customers want advice-driven banking, including 54% of customers interested in banks locating discounts.
"Most consumers (79%) define their banking relationship as transactional... This trend is bad news for banks. It reflects a fundamental problem for the industry. When customers think about what the bank offers, most think about commodity banking products and services rather than unique value for their broader financial lives."
By out-marketing and out-innovating retail products, larger banks know the battle is on to attract profitable or quick to be profitable customers, traditional ones right down to millennials, by offering an attractive “earned” incentive to move and providing better mobile products along with a wider variety of other retail products and services.
Big banks have been committed to working out their mobile strategies over the past two years and are now unveiling the dramatic results they’ve achieved. According to AlixPartners, big banks controlled 67 percent of the primary banking relationships by the second quarter of 2014, while credit unions had 14 percent. Mid-size banks controlled 11 percent, community banks 4 percent and all others at 4 percent.
For consumers, having an interest checking account these days is, well, uninteresting.
Financial institutions only pay a few basis points of an interest rate at most, which requires a significant balance to generate meaningful interest income to customers. Even high-yield checking accounts average just 1-2 percent, but with qualifying balances capped around $10,000, customers annually make barely enough to go out for a nice dinner for two.
Facebook isn’t just satisfied with having more users than any other social media in the world. They’re craving their piece of the future of mobile payments. With the recent announcement to offer peer-to-peer payments through its Messenger app, Facebook is seeking to establish a deeper connection to users’ finances and to take a bite out of traditional financial transactions.
Originally posted on CUBroadcast.com April 7, 2015
According to StrategyCorps Partner Dave DeFazio, there are five mobile banking "must haves" today:
- Mobile banking
- Mobile bill pay
- Mobile deposits
- ATM/branch locator
- P2P payments
If you have those, you are meeting the needs of today's increasingly mobile consumer. If not, you better get on the stick. But, as we all know, the FI market continues to evolve at a breakneck pace and CUs must be ready for it. So we asked Dave what's on the not-so-distant horizon when it comes to mobile services -- venturing beyond the big five, if you will, that keeps your members happy and loyal to your credit union.
The five biggest retail banks — recognized by the brand names U.S. Bank, Chase, Bank of America, Citi and Wells Fargo — control over 50 percent of total assets in the U.S. and are driving the mobile banking agenda. In a race to meet the mobile transaction needs of their customers, these banks have all conquered the most basic services that soon almost all banks will have—mobile banking, mobile bill pay, mobile deposit, ATM and branch locators and P2P payments. Now in phase two of mobile banking, these banks are in an arms race to further engage with customers’ mobile lifestyles, particularly by helping people save money when they shop.
Startup companies like Birchbox and Uber are winning the game of consumer marketing because of one single variable – they are marketing in the year that we actually live in. Unfortunately, too many financial marketers continue to promote messages in places where consumers are less likely to see it, hear it or feel it.
Toronto-Dominion Bank’s (TD) recent partnership with Moven is a material strategic move to help the bank’s customers advance their personal financial fitness. Moven, along with other nontraditional mobile banking providers like Simple and GoBank, are challenging the financial industry’s line of thinking of what a mobile banking app can be. These types of bank apps offer budgeting tools that can help customers prevent overspending and learn how to more effectively save money.
Nearly every financial institution (FI) has the Big 5 of Mobile Banking or is planning to have it in the next 12 months — Balance inquiry / funds transfer, Mobile bill pay, Mobile deposits, ATM / branch locator, P2P payments.
The top five largest banks in the country, which collectively own a majority of the checking account customers in the U.S. and represent the major competition for most community FIs, have had the Big 5 for quite some time. So getting the Big 5 is really just “table stakes” to play in the mobile banking game — a game which continues to occupy the hearts and minds of retail bankers as consumers are now more actively figuring mobile banking functionality into their decisions about where to bank.