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Financial services firms face challenges with marketing automation

  • Financial services have been slow to adopt marketing automation.
  • That's changing as firms experiment and import new talent.
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Financial services firms face challenges with marketing automation

The financial industry hasn’t always been an early adopter when it comes to new technology. That’s beginning to change as startups and imported marketing talent from other industries begin to embrace best practices. Marketing is one of those places where the industry is surely changing. As such, financial services is incorporating greater levels of automation and marketing technology tools into its tech stack.

Marketing automation, used widely across the ecommerce sector, is an entreprenuer’s wet dream and wildly popular with startups. 67 percent of marketing leaders report using marketing automation tools. With marketing automation, instead of employing scores of marketing specialists, a financial services company can program most of its marketing to be responsive to its customers’ and prospects’ needs. Marketing automation platforms like Marketo, Pardot, and Hubspot are experiencing strong growth as companies new to the space migrate to these platforms.

The promised land of automated marketing

Large financial institutions face a tension whenever they do mass marketing. To speed marketing operations and keep costs low, firms typically create a handful of customer buckets and send similar messages to all customers in a given bucket. It’s not great targeting, but it does provide positive ROI.

But customers respond best to communication, experiences, and offers that they feel are on message at the right part of their customer journeys. As such, marketing automation enables personalized messages at scale.

“As we all yearn to deliver the right message to the right target at the right time, marketing automation tools can help us determine what a customer is interested in based on their actions and serve up the appropriate response as a follow-up consistent with the company’s brand and tone,” said Christian Hughes, President of Cutwater, a creative agency in San Francisco.

“In an industry with as much skepticism from the consumer’s perspective as financial services, marketing automation can help institutions offer something of value to people at the right time, ultimately helping to build trust between the customer and the company.”

Automating messaging through omnichannel

One use case for marketing automation is lead scoring. Lead scoring assigns a numeric score to prospects in a firm’s pipeline based on how warm the firm believes the prospects are. Marketing automation rules can then trigger an email or a phone call to a prospect when she hits a specific threshold score.

“For example, institutions could automatically stop sending messages to people who repeatedly don’t respond to their messages,” said Joel Lee, a marketing specialist at Trumpia, an SMS marketing automation platform. This would ensure that prospects weren’t pummeled with marketing messages they’re just not interested in.

Another way marketing automation can be used is in smart targeting, according to a customer’s industry, interests, or behavioral history. A bank could have a reminder automatically sent to customers who are routinely late with their payments. Marketing automation can also optimize communication channels according to customer preferences. Trumpia’s Lee claims that as 98 percent of text messages are read, sending via specific channels can help ensure that customers and prospects actually see a marketing message.

Marketing automation’s challenges

As with any new technology, the financial industry tends to approach it with skepticism, opting to take a wait-and-see approach before diving in. And that makes sense, given how highly regulated the industry is. Marketing automation’s use of personal information can prove to be a hurdle.

“One of the biggest challenges in any regulated industry, like finance, is implementing required controls on data protection as you scale operations,” said Matt Heinz of Heinz Marketing, an agency specializing in B2B marketing automation.

“This means having a tight handle on customer information, what’s shared where, integration of that information and its recency across systems. In other words, as companies in the financial space scale their use of marketing technology, having those security controls in place needs to be a high priority.”

And it’s not just data integrity that financial firms bump up against. Years of technology debt and aging technology platforms provide hurdles for the various systems to talk to one another. Data ends up residing in different silos, making it difficult to accurately profile customers.

“One of the biggest challenges we run across in the fintech and financial services industries revolves around lack of data integration, either for legacy, regulatory, or compliance-related reasons,” said Andrew Becks, the cofounder and COO of 301 Digital Media, a Nashville-based digital marketing agency. “That makes leveraging consumer data for marketing purposes a lot more complicated than it often is for less regulated industries like where personal information is regulated with a lot less
complexity and, in general, businesses are more comfortable with the idea of using transactional data for marketing purposes.”

AI is the next realm for marketing automation

Marketing automation rules need to be written by someone. Marketing teams spend a lot of time building out customer journeys, if-then statements, and the rules behind marketing automation. If marketing automation removes the need to do push marketing, new AI technologies ease the need for human oversight.

Indeed, AI-powered marketing automation tools are already on the market for the financial services industry. About 50 percent of marketing leaders are already using AI, with more than a quarter planning to pilot it in the next two years. In addition, almost three-fourths of high performers say that they are already using AI technology in their marketing programs, according to Salesforce.

Early tools to market like Kasisto, Drift and Personetics focus on providing technology that engages prospects on a firm’s website with what feels like a conversation with a real sales person. From there, AI can elevate a conversation to a human customer service rep, if a situation calls for it.

Marketing automation is still in its infancy within the financial services industry. As more firms adopt tools to provide personalized messaging at scale, look for these platforms to employ some level of AI to improve optimization.

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