By Mark Gibson
The banking industry has weathered the storms of 2023, although it is still dealing with the implications of elevated interest rates. The almost ubiquitous search for deposits, combined with depressed margins, placed pressure on bank marketing teams in 2024. The new year promises to be equally full of surprises, given the start of declining interest rates and a new political climate. However, one thing is not expected to change – the need for low-cost deposits to fuel (hopefully) increased commercial loan growth.
CPG clients ranked ‘Deposit Growth’ as the number one strategic objective again in 2025.
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The six emerging trends these sources agreed upon are:
1. Personalized hyper-targeted marketing
2. Performance marketing
3. Customer data analytics
4. Marketing automation
5. Relationship and loyalty
6. Generative AI
Taken together, these six trends indicate a significant shift towards more customer-centric, flexible and technologically integrated marketing approaches in the banking sector as we move into 2025.
Approaching a target market of one
Let’s be honest. While every publication talks about the importance of personalization, for most banks, it’s very elusive. It requires a vast amount of data and a complex marketing technology (‘martech’) stack. However, put a different way, “analytics-driven audience targeting” was one of the top trends mentioned by bank marketers we spoke to. This was particularly true when applied to the use case of “cross-sell and relationship deepening.”
CPG clients ranked ‘Cross-Sell and relationship deepening’ as the most impactful trend in 2025, and ‘Analytics driven audience targeting’ third most impactful.
Going back to our primary objective of growing deposits, several bank marketers shared that they were able to use data analytics to determine which existing customers were likely to have deposits at other institutions. This allowed them to partner with their sales teams to be very targeted, gathering millions of dollars of new funds without repricing existing deposits.
So, while ‘personalization’ will remain elusive in 2025, marketers will become much better at targeting their efforts more precisely. Because this makes their marketing more relevant and timelier to customers and prospects, it increases response rates and drives down acquisition costs.
Marketing needs to drive revenue growth
Bank marketers agreed that they are being held more responsible to help lines of business achieve their revenue growth objectives. This trend emerged following the recession of 2009, when bank marketers were required to prove the value of their programs, or see their budgets slashed. Now, whether it is attracting new customers, growing deposits or identifying lending opportunities, marketers are being asked to work more closely with bankers to develop programs that improve the bottom line. CPG has noticed this shift from ‘brand marketing’ to ‘performance marketing’ for several years. While brand marketing builds consistency and awareness, performance marketing is designed to sell products to customers and prospects in a way that is measurable and predictable.
Performance marketing is different from brand marketing in several important ways. First, it’s designed to grow revenue in a profitable manner. Second, data is used to identify prospects or customers who are likely to respond to a marketing message. Third, marketing partners with bankers to enhance the conversion rate. And finally, measurement is put in place allowing bankers to see the impact (and ROI) that marketing programs are having on revenue growth objectives.
A related topic is ‘Revenue Operations,’ which was the focus of our session at the 2024 ABA Bank Marketing Conference. RevOps takes performance marketing to the next level, suggesting that marketing, sales, operations, and customer service collaborate to maximize growth, customer satisfaction and ultimately customer lifetime value.
No matter what we call it, creating marketing programs to help achieve revenue growth objectives in a measurable way is a trend that is here to stay.
It all starts with data!
Astute readers will notice that both the previous trends are dependent on marketers having the right customer data available. You can’t refine your targeting without customer and prospect data. And you can’t measure the results of your marketing programs without data! To quote one of our bank marketers: “As marketing shifts to be more heavily involved in revenue growth, I’m anxious about having the correct data in order to do so.”
Data analytics is not a new trend – in fact, ‘customer analytics’ was on the ABA’s list of bank marketing trends last year as well! However, it remains a top trend because it’s a critical ingredient to smart marketing, and it remains a ‘work in progress’ at most institutions.
What ‘data’ are we talking about? The basic requirements are: grouping accounts by customer or ‘household’ and appending segmentation data to your customer file. These two data elements allow you to compare what products your customers have with your institution, compared to what they are likely to have elsewhere. That is the heart of an effective cross-sell program. Layering in transaction data is a nice enhancement, because it allows you to determine which customers are ‘primary checking’ customers, so you can encourage those who are not to become one. Transaction data also helps you identify which of your best deposit customers may be thinking about leaving you so your banker can reach out and retain them.
Regarding new household growth, you will need to obtain data on the people (and/or businesses) who live in your branch trade area. Which of them are likely to need the products you are selling? How many are there? This type of data allows you to put together a performance marketing program which is targeted, and which is measurable. For instance, if you spend $25,000 to target 10,000 households and sell 100 of them, you know that your response rate is 1 percent and your cost of acquisition is $250. This allows you to calculate an ROI on your program and predict the results a similar program will achieve in the future.
Remember: Perfect is the enemy of good. In other words, don’t wait until your bank has pulled together all the different sources of customer data into a data warehouse or data lake. You can do these basic and effective campaigns NOW! And if there are not sufficient data analytics resources within your institution, you can ‘rent’ them by hiring a qualified vendor or agency. But buyer beware! Make sure they have the analytical horsepower you need, or you will not capture the performance improvement that this trend promises.
Is it time for marketing automation?
Marketing automation is another trend that has been around for a while. According to a recent ABA survey, 35 percent of banks have invested in marketing automation technology. And another 27 percent said they would in the next 12 months. There are three key questions here. First, what does marketing automation allow you to do that you can’t do without it? How do you determine whether you need it or not? And, if you have it, how do you fully leverage it?
Contrary to what many MAP salespeople tell you, marketing automation is not a panacea that will allow you to easily automate hundreds of campaigns. What marketing automation WILL do is allow you to automate any successful campaigns you have, and build new ones in the system, one at a time. Therefore, over a period of time, MAP will allow you to run many more campaigns simultaneously than you can do manually today.
Given that, MAP will eventually allow you to tailor specific campaigns, or treatments, to different customer groups, based on their demonstrated interests and behaviors. For instance, if a customer explores checking accounts on your website, but does not complete the online application, MAP can automatically reach out and ‘nurture the lead’ until it converts.
Marketing automation can also create reports telling you, for each campaign, how many customers were contacted and how many took specific actions (clicked, downloaded content, began an application, asked for a meeting, etc.).
If that sounds good, is it time for you to invest in MAP? It depends. Do you have successful campaigns documented that you can easily build in a MAP? Does your team have the capacity to build others into the system? Do you have someone on your team that has the capability and capacity to ‘administer’ the system?
If the answer to any of those questions is ‘no,’ but you still want to move forward, it might be smarter for you to ‘rent’ MAP than to buy it. In other words, there are many marketing agencies that have a MAP that they can run on your behalf. This means that the agency will need access to basic customer and product information, so you will need to get your risk officer comfortable. However, this can be a very practical solution for small marketing teams, or teams that lack technical expertise in-house. This is often done for new customer onboarding or specific cross-sell programs.
Rewarding loyalty
It’s only natural for bank marketers to focus on acquiring new customers and products. That’s what many of our internal clients (line of business leaders) are focused on! However, the marketing mantra that it’s easier and cheaper to sell to an existing customer than to bring in a new one has never been truer than in banking. That’s why more marketers than ever are giving serious thought to rewarding loyalty to deepen and retain relationships.
Improving loyalty can take many forms, from explicit loyalty programs like the airlines use, to relationship pricing, and finally to other types of customer engagement. Most of us have studied Bank of America’s comprehensive loyalty program, which includes a wide variety of products and has four different benefit levels, depending upon the customer’s combined balances. It does not take much imagination to see how this type of program motivates a customer to consolidate their relationship to get discounts, rewards or a better interest rate.
Bank of America’s Preferred Rewards program has four tiers and includes deposits, loans, credit cards and investment products.
Relationship pricing can be a stand-alone benefit as well. In its simplest form the bank adds checking, savings, money market and even CD balances, providing customers with better rates or a higher level of service as certain thresholds ($25,000, $100,000, etc.) are reached. Some banks include consumer loan or mortgage balances as well, and innovative banks have even included business balances to encourage business owners to have their personal banking and business banking at the same institution.
Finally, there is a myriad of engagement programs that can build loyalty to your institution. An old standby is an event, where clients, prospects and community leaders are brought together to learn about a topic or just to meet socially and professionally. With the advent of technology, this type of ‘community building’ can take place through webinars, podcasts, blog posts, social media posts and even the creation of online communities within a bank’s website. The goal with all of these should be to build a sense of community and membership, making the customer feel special and providing something of value that is only available to your customers.
Will 2025 be the year of generative AI for bank marketers?
There has been considerable hype ever since OpenAI launched ChatGPT 3.0 in early 2023. However, the banking industry has for the most part taken a cautious approach, due primarily to fraud, privacy and other risk management concerns. As a result, marketers in other industries have been much more aggressive in experimenting with these new tools.
While artificial intelligence in its broadest sense has numerous applications for marketing and other departments in the bank, that which provides most immediate promise is using generative AI tools like ChatGPT and Claude to help develop creative assets. One bank marketer who responded to our informal survey for this article enthused that she has been able to dramatically shrink her agency retainer because basic creative assets like press releases and brochures can be drafted quickly and easily using AI.
Best practice suggests that marketers use AI as a tool rather than a replacement for subject matter expertise, copywriting or editing. But ‘with proper supervision’ generative AI can dramatically speed up the creative process, reducing cost in the process.
Other common use cases for which you may already be relying on AI include social media monitoring and digital media programmatic buying. Most of these tools available to you or your agencies have built basic AI functionality into them and are increasing both efficiency and effectiveness.
Other AI use cases, like sifting through large amounts of customer data to create propensity models and truly personalize communication, are not readily available to community bank marketers yet. But they will be!
Marketing embraces technology and the full customer life cycle in 2025
Marketing budgets are tight right now, but there is light on the horizon. The coming year promises lower interest rates which should make deposits a bit more affordable for banks, as well as boost loan demand. The six trends outlined here will put marketing even more in the driver’s seat, in terms of driving customer insight, and leveraging it to help the institution deepen customer relationships and grow revenue. Technology and data analytics underlie five of the six trends as well. Marketers will need to continue to use both sides of their brain – the creative and the analytical – to thrive in 2025!
Mark Gibson is the marketing practice leader at Capital Performance Group, a strategic consulting firm that assists banks in improving the return on their marketing investment. He can also be reached on LinkedIn.
