Marketing is essential. It drives revenue and is a big investment for banks. But marketers cannot grow the size of the pie – only their slice of it. With Big Tech entering the fray, competition over those slices has become even more intense. Those that can use their data more effectively will stand a better chance of winning – those that do not will most likely die. But this is not a battle that the CMO can fight alone. All functions need to work together and discuss data consistently at board level to succeed.
Richer conversations drive more value, identify better opportunities and more innovative products. They can help banks to escape the quagmire of slow growth and declining margins. Failure to do so, and quickly, will see the opposite. Banks that do not extract value from data will slip further back into decline and, at best, be constrained to low margin ‘financial plumbing’ supporting innovative, high margin services offered by Big Tech.
CMOs are charged with driving revenue – the lifeblood of any organisation -- but they must also control costs. Banks face a conundrum; they have already acted to cut costs but still need additional savings especially in the post-COVID digital environment. At the same time, they need to work harder to understand customers better, and provide a more attractive and responsive service to fend off Big Tech. An orchestrated data platform is the brain that automates listening, understanding, decision-making and execution of customer marketing. This can no longer be a manual process or require swivel-chair integration between applications.
Used correctly data can touch and solve many of the challenges faced by banks. Data-driven intelligent conversations can effectively fill the gaps created by the thousands of people and hundreds of branches lost as banks downsized over the last decade. Automating processes and scaling to millions of customer contacts without ballooning costs is critical to drive new revenue and margin. This demands a joined-up data strategy in which data flows across the business and is shared, combined and improved by all to generate value.
CMOs must not consider the data and the platforms they need for to make this happen, but also how they structure their functions around data. Individuals and teams have become accustomed to ‘winning’ budgets to support their campaigns based on simple metrics; spend $x million on marketing to sign-up a few hundred thousand new credit card customers. Teams are incentivised to push products. In the bank of the future decisions on investment will be driven by customers themselves – money will flow to where the customers are.
To survive, the rest of the bank must follow this lead. Every part of the bank from treasury and balance-sheet management, to fraud prevention and risk should be automating intelligent conversations to drive revenue and save cost. CMOs
have the opportunity to establish the model for these deeper and more joined up interactions across the whole bank.
New skills, new roles and new incentives will be needed. Data literacy must be enhanced. Close partnership with CDAO and their teams of data scientists will help marketers break out of established approaches to data and ways of working. Consideration of much wider data sets, integration of insights from across the business, and creation of not just campaigns, but entirely new products to satisfy customer needs, will become the essential day to day work of marketing teams.
But even that will not be enough. This is an all-out battle for survival, and it is a zero-sum game. There are only so many customers and service opportunities to capture, the only way to grow is to grow at the expense of others. Marketers and the CMO are on the frontlines in this battle with their responsibility for revenue but they can’t win alone.
Chief Data and Analytics Officers will play a crucial role in connecting, translating and aligning the organisation around the data strategy, but the CEO needs a battlefield general with the oversight, authority and credibility to make this a whole bank effort. It’s time for the CFO to reinvigorate their strategic role with data as their core competence...