What About Marketing?

Banks, in most cases, have always been profitable and it has been easy for the banks to get clients to open accounts. Even though the banking industry is very competitive, banks have always had the customer coming to them for banking facilities. Banks hardly win customers by going to the consumer; with a presentable branch and great customer service, the customer is easily won.

Now bankers are being threatened by the likes of retail outlets such as supermarkets that have so much information about their customers. Most of these customers would visit these outlets whether offline or online than go to their local banks. Some banks are struggling to get their customers to log on to their websites and use the online banking facilities but these same customers will be found online visiting online retails sites such as amazon.com.

In the western world, supermarkets such as Tesco and Sainsbury’s are offering banking facilities, a competition that is leaving the banking world quite unsettled. With the innovation of technology, banks would have to come up with creative ways to be profitable consistently.  Some banks in the United States are going direct to the consumer with the use of technology than waiting for the consumer to come to them, while still adhering to privacy laws.  Bank of America, Citigroup and credit card companies, for example, are using technology to increase their revenue. Bank of America has developed a system to analyse the data of consumer spending and are selling such targeted information to retailers. Citigroup is also monitoring their customers’ transactions in some Asian countries and with that information, they send text messages to the customer, offering special deals from other stores. So for example, if a customer is buying clothes, they will offer a discounted beauty treatment at a salon nearby.

Another concern for banks is the information that social media platforms have on customers. Think about Facebook. Facebook definitely has more information than the banks. They have their customers’ personal details and conversations can be tracked to establish the customers’ likes and dislikes. Nothing stops Facebook from offering financial facilities.

Michael Jordaan, CEO of FNB who is known to be a strong advocate of Social Media said, “Social Media allows our bank to reinforce our core brand value of helping our customers achieve success and positions our organization as Africa’s most approachable, trustworthy and technologically-savvy retail bank.” He was also interviewed by ABN Digital and was asked about the state of the banking sector in the next 5 years, and this is what he had to say, “I believe that banking worldwide will change more in the next 5years than it has in the past 100 years. The reason for that is technology. We are getting challenged by technology providers from all over the world. So let me give an example, when you use apple, you can go to iTunes and you’ve got an iTunes account. What stops apple from making that iTunes account a bank account? They have already got a brand that lots of people love, they are all over the world, people are already using that account to buy lots of apps so it’s just one step further for apple to become a bank and that is hugely threatening for traditional banks. I believe we just have to keep on innovating. We have to be paranoid about the advantages of technology and we have to defend ourselves.”

With the above statement, it shows that banks should not be complacent and come up with innovative ways to get the consumer. Banks should embrace technology and Social Media. Technology should not only be focused on e-banking. The traditional way of how banks used to be profitable is gradually waning and banks must step up their game. They should be more aggressive by building more relationships with the customer, find out what the customers’ wants and offer alternatives, using technology which would lead to an increase in profits.