In a fast-changing digital landscape, incumbent banks in Asia will need to scale up their capabilities in digital marketing to win in a world of digital banking, said McKinsey.
The firm said with digital platforms enjoying increasing customer trust and reliance, banks need to respond by nurturing a digital brand image that places them top of mind for customers.
“Customer adoption of digital banking has gone beyond online transactions to an increased number of digital purchases of banking products. In Asia, customers rely quite heavily on the internet to evaluate banking products such as credit cards and auto loans, and to compare products, benefits, and prices before purchase.
“Customers also trust these digital resources with about 35 to 50 percent of consumers in Asia changed their mind after considering or evaluating a product online. But these increased numbers still lag those in other sectors,” it revealed in its survey entitled “Asia’s digital banking race: Giving customers what they want”.
The firm said digital sales penetration is around 65 percent in Developed Asia and between 10 and 15 percent in Emerging Asia.
“By comparison, e-commerce penetration in the two regions is around 95 percent and 45 percent respectively. For banks, a focused digital marketing effort will involve building up their online brand and presence and investing in customer acquisition campaigns and engagement through social media, internet advertising, and other media.
“If done well, digital marketing can help banks acquire customers at a lower cost than traditional marketing. A range of initiatives—campaigns; tailored, dynamic messaging; audience-specific marketing—can be monitored using advanced analytics to understand audience responses, why some campaigns work, and why others do not.
“These efforts will require a very different set of capabilities than the ones banks have traditionally used for customer engagement,” it said.
It said US-based bank Capital One has rapidly scaled up its digital marketing capabilities, running multiple digital campaigns in A/B testing mode to improve reach and conversion.
“For example, the bank conducts tens of thousands of data experiments each year, offering credit cards with different interest rates, incentives, and marketing techniques. It also uses Facebook and Instagram to connect with consumers online.
“In 2015, it launched its first Instagram campaign, in which three photographers shared photos of objects they carried in their wallet, and encouraged users to respond with their own posts.
“The campaign boosted Capital One’s ad recall by 16 percent, and gave it access to user-generated content for use in multichannel campaigns across digital, print, and out-of-home entertainment media advertisements,” it said.