In a world full of distractions, attention is an increasingly scarce commodity. The constant flood of content, advertisements, and information swirling through today’s “attention economy” has made it harder for financial institutions to engage and form connections with their target customers. It’s not just that your ad is one of the thousands of ads a consumer sees on any given day; every click, scroll, and second spent on another app on their phone pulls attention away from your banking products and services.
Attention scarcity is an issue for every industry. However, consumers spend less than 2% of their time each month on banking and financial services activities, which means the window for financial institutions to capture and maintain their customers’ attention is already relatively small.
Research shows that the attention economy may be shaping consumer behavior in ways that will benefit certain brands in the long run. Nearly 80% of consumers said they would prefer to get more ads in exchange for paying nothing for websites or apps. Meanwhile, 87% of consumers said they are more likely to click on ads for products they’re interested in or shopping for. In essence, consumers aren’t opposed to seeing more ads; they’re just more likely to pay attention to the ones that feel personalized to their needs.
How can financial institutions capitalize on these shifts in consumer behavior? Increasing their digital advertising spend is one option (and many companies are doing just that). However, to get more out of their advertising dollars and build meaningful digital connections with their customers, financial institutions may need to lean on a powerful asset already at their disposal: their customers’ data.
If you want to understand the dynamics of attention scarcity, look no further than Generation Z (adults born between 1997 and 2012). Growing up as digital natives, this fast-growing segment of the banking population - which will represent one-third of the U.S. workforce and 17% of global retail spend as soon as 2030 - expects convenience and personalization across every digital experience. As a result, it takes just 1.3 seconds for Gen Z consumers to skip past an ad that does not intrigue them or align with their interests.
Meanwhile, 64% of Gen Z values personalized banking experiences with product and service recommendations relevant to their unique banking needs. Considering these two trends at once, banks and credit unions have less than two seconds of every digital interaction to serve financial products and services that resonate with young consumers and address their banking needs.
Neobanks and fintechs are winning over Gen Z with digital-first strategies, but the fact that nearly half of Gen Z continues to shop for new banking relationships tells you that the fight isn’t over. As financial institutions prepare for the generational shift over the next decade, they must find ways to engage this digitally-savvy segment of the banking population. Furthermore, winning the war of attention with Gen Z may create a roadmap for how banks and credit unions can evolve their marketing strategies in more innovative and cost-effective ways.
It takes just 1.3 seconds for Gen Z consumers to skip past an ad that does not intrigue them or align with their interests.
Data is essential in winning the war for attention. It is the key to unlocking the level of hyper-personalization and relevance that consumers (especially Gen Z) expect. The great news for financial institutions is that consumers are already willing to share their personal and financial data - particularly with established brands - as long as it is secure and leads to more personalized banking experiences. The institutions that can harness their accountholders’ data are better positioned to deploy it in ways that meet their customers’ digital expectations.
According to a recent MX study, the top three personalization expectations among banking customers are:
Essentially, customers want their banking partners to use their data to deliver hyper-relevant products, services, and rewards while helping them better understand and manage their finances. This simple value exchange cuts to the heart of how financial institutions must evolve their marketing strategy. Every ad, email, push notification, and digital engagement with a customer needs to feel like a personalized experience.
Customers don’t want to see ads for lending products they won’t qualify for or features and rewards they won’t use. At the same time, when customers log on to your banking app, they don’t just want to see their account balance - they want insights on how they can improve their financial wellness.
Most importantly, the value exchange your customers expect needs to happen in real-time. Remember that consumers spend just a few minutes managing their finances every day, and the younger cohort tunes out ads and content after a few seconds—that’s a tiny window of opportunity for financial institutions to capture buying intent signals and churn out hyper-personalized offers.
A recent BCG study found that when personalization is executed at scale it can lead to “annual revenue uplifts of 10% for banks.” Furthermore, “for every $100 billion in assets that a bank has, it can achieve as much as $300 million in revenue growth by personalizing its customer interactions.”
87% of consumers said they are more likely to click on ads for products they’re interested in or shopping for.
How can financial institutions achieve that level of personalization across their customer base? By unlocking the power of their data. At our recent Narmi Uplift conference, industry leaders discussed the pivotal role data plays in creating personalized digital experiences, including Brian Reilly of digital marketing firm BankBound. His presentation, Unlocking Growth Through Marketing, provided financial institutions with a series of best practices in growing an existing customer base’s commitment, including strategies that are especially relevant for community banks and credit unions. Smaller banks unable to outspend their larger competitors must still dedicate significant spend towards marketing, while calibrating their efforts in the form of data segmentation and intentional campaigns.
Beginning with how customers discover your products and services to their digital account opening experience and how they engage with your digital banking solutions, data becomes the key to building a single, connected experience for the end-user. The importance of data-driven personalization across the entire customer journey cannot be understated, as it is the key to narrowing the widening gap between customers’ dwindling attention and the digital banking experiences they anticipate.
Download Narmi’s latest guide to learn how your bank or credit union can cut through the noise with expert segmentation and hyper-personalization so you can create customized experiences and provide financial counsel tailored to each new member – while you’re still top of mind: https://www.narmi.com/get/2024-guide-to-smarter-segmentation
