By Megan PannierConsumer adoption of digital banking technologies has been steadily increasing over the past decade, moving towards the day when paper is a thing of the past. While the pace of adoption has varied by technology, in some cases it has been more tortoise than hare, with adoption rates of tools such as electronic bill payment growing 2 to 3 percent year-over-year.
The world changed with the arrival of COVID-19. Suddenly, digital interactions surged. For many who banked in traditional ways, including visiting branches to make deposits and transfers and mailing paper checks for payments, there was only one real solution: Quickly get up to speed with online banking and mobile banking, including remote deposits, e-payments and person-to-person transfers.
To support the overnight increase in consumer interest, banks needed to quickly re-evaluate their marketing of digital tools. There was a clear opportunity for financial institutions to educate consumers and drive adoption of digital and electronic payments solutions, but there was a catch. How could banks market what they had to offer without appearing to be taking advantage of a terrible situation?
There is a way to market digital tools, even in a crisis, without appearing opportunistic. In my experience, I’ve found that customer education and clear, compelling benefits have to be at the center. When done right, the payoffs include greater engagement, more actionable data and higher revenue.
Saying the same thing, differently
Banks should always tailor, and even segment, their marketing messages to appeal to the unique needs of their customer base. This becomes even more important during a crisis. Crisis situations require additional caution and care in communications, with the understanding that change, especially to routine habits, can be difficult.
After assuaging customers’ safety concerns as priority one, a number of leading financial institutions immediately rolled out COVID-19-specific marketing campaigns. The key messages were focused on solutions to immediate needs, highlighting recommended use cases. Remote deposit capture, electronic bill payment and P2P payments were presented as solutions to help customers who were social distancing or quarantining continue their financial activities.
Customers who were previously slow to adopt digital solutions were now paying attention. It’s because the message was clear and coming at the right time: Nearly everything that customers had been doing in person could be completed online.
Results from Fiserv’s most recent quarterly consumer trends survey uncovered that more than one in four consumers have changed their payment methods as a result of the pandemic, with more than 65 percent saying they expect their increased usage of mobile app payments, mobile check deposit and automatic and recurring payments to be permanent.
Beyond the current pandemic situation, focusing messaging on the how and why versus the what is a good way to connect with consumers. It’s an exercise of saying the same thing differently to highlight value propositions that are grounded in the new realities of COVID-19.
Moving the needle
As the severity of the pandemic became apparent, so did the importance of maintaining banking continuity. This resulted in the ongoing embrace of digital solutions, including P2P payments.
From a P2P perspective, we’ve seen consistent growth in adoption and usage every month for the past three years. March and April put an exclamation point on that upward trajectory with new user growth at about 19 percent and transaction growth increasing by roughly 9 percent on average.
In reviewing these stats, we found that Gen Z had the highest rate of growth in P2P users and transactions, particularly just after stimulus payments arrived. As the pandemic shifted from a health crisis to a financial one, the value proposition of real-time cash flow became even more important for sending and receiving money. This made a bank-provided P2P solution like Zelle, a fast, safe and easy way for people to send money to those they trust, a compelling alternative to P2P apps such as Venmo that charge a fee for instant access to funds. This underscores my earlier recommendation to reassess the why and how of marketing messages.
The stats also revealed significant adoption at the other end of the demographic spectrum as Boomers started using P2P payments in larger numbers. There was an average lift for new users over baseline expectations of 29 percent during the peak COVID-19 months of March, April and May. Contributing to that, one pronounced use case involved using P2P payments to reimburse friends, family and neighbors who purchased groceries on their behalf. To help make the transition to P2P more accessible for older and potentially less digitally savvy users, marketers can use demo videos in their e-communications to help new users get started.
Leveraging a foundation of data
Electronic payments data and analytics can help financial institutions better understand their customers to deliver more personalized, insights-driven marketing messages–and spot opportunities to drive greater engagement.
One example: Filtering electronic payments user data by age and other demographics allows financial institutions to create targeted email campaigns and personalized messages that resonate with each group. Millennials may be looking for solutions to help them manage financial situations they’re experiencing for the first time, whereas boomers value security and trust in their daily banking practices and respond to messaging highlighting convenience and simplicity.
By drilling into the data—even down to a specific branch or region, as it applies—financial institutions can uncover trends by usage, demographics and more. As with the P2P use case of boomers leaning on others for their grocery shopping during the pandemic, banks that identify usage trends within their own customer mix can better tailor their marketing messages for maximum impact.
Flexing for the future
The rate of change we’re seeing now is really quite significant. Consumers haven’t just been rethinking their financial management methods during weeks of being stuck at home. They’ve radically rewritten their lives to adopt digital solutions for everything from work to school to shopping. As we all look to land on what our “next normal” will be, there’s reason to believe consumers won’t immediately abandon their more digitized lives.
In fact, digital systems that work better than their pre-pandemic analogs will likely see continued staying power and even gains in usage. The good news is that the ongoing digital shift in banking will provide more opportunities to unlock better customer experiences.
Banks that continue to refine how they market their digital solutions will be set up for future success, will stay engaged with their customers and ahead of the competition.
Megan Pannier is Fiserv’s VP, marketing and analytics, enterprise payments solutions.