How to Make a Bank Campaign 12 Times More Effective?

October 27, 2022

Understanding customer needs has always been a desired goal for most companies, not just in banking. They aim to gather more information and, if possible, replace broad campaigns with more targeted marketing actions for smaller groups of customers with similar needs. Current marketing capabilities allow for the use of “event-driven marketing,” where the trigger for engaging a customer is the occurrence or non-occurrence of a specific event. If we know the customer’s life situation and time our campaign and tools appropriately, we can significantly enhance the sales of our products and services.

Broad campaigns are costly and inefficient and can be replaced with targeted activities. The task was clear: identify events in customers’ lives where we can truly assist them, leading to increased sales and customer satisfaction. With this intention, the bank approached client communication, opting not to indiscriminately target a large number of clients.

Event-driven marketing in banking relies on knowing the specific life situation of a customer. This allows the bank to respond with tailor-made offers at the right moment. This knowledge, combined with timely marketing or sales efforts, can lead to more effective product and service sales.

However, integrating this approach into daily operations and setting up event-driven activities is challenging. It requires not just strong marketing but also a competent data team and modern infrastructure. Therefore, campaign modernization demands creativity, time, and investment.

Data Hide Informational Treasures

Where does a bank get such detailed information? Only through the analysis of large volumes of data over at least a medium-term historical perspective. This is how we can observe natural trends and cycles in customer behavior. Technology is the main driver for a comprehensive approach.

“Especially with the development of Big Data platforms, solutions have emerged that can process large volumes of data, text, and other formats. Advanced analytics thus gains entirely new dimensions and possibilities. A variety of open-source and commercial tools have been developed to extract information from data that is useful for business,” says Dagmar Bínová, consultant and head of the Big Data & Data Science team at Adastra.

Lean on Data Analytics

How does data analytics function in the real world of banking? For example, time-series analysis can be used to forecast the ending balance of a client’s checking account. It starts with identifying behavior patterns and then developing an algorithm to adjust the current balance based on upcoming deductions like payroll. Clients can then anticipate future expenses and avoid unnecessary debt.

As a result, banks boost customer loyalty by improving financial literacy and positioning themselves as fair and often preferred financial partners. Real-time data availability and updates are essential for these predictions. If data entry into banking systems is delayed by several days, the reliability of models and forecasts diminishes.

Thus, the timeliness of data is crucial nowadays, with modern analytics and application features heavily reliant on it.

Event-Driven Marketing in Action

Text data can also be effectively used for event-driven marketing. “We processed three types of data: descriptions of commands sent via online banking, personal bankers’ notes, and transaction identifiers on debit and credit cards,” explains Dagmar Bínová. The goal was to uncover new, previously unused information about clients to tailor banking services directly to their needs.

The first targeted group was parents experiencing financial strain in September. The second group included individuals preparing for vacations, who had paid for a trip, booked a flight, or purchased insurance.

For these customers, we offered a credit card as a financial safety net for unplanned expenses while traveling abroad. The resulting conversion rate was between 6 to 7 percent, which is twice as high as traditional campaigns combining call centers and direct email. The estimated sales potential for half of this group, based on the traditional banking model, was around 0.5 percent. In comparison, the results were twelve times better.

12x

higher conversion rate in selling banking products.

6-7%

was the conversion rate when offering credit cards to customers traveling abroad.

2x

more effective than using a combination of call center and direct mail.

10x

higher conversion rate compared to traditional models. Theoretical studies also show that, with proper timing, event-driven campaigns can achieve 10-15x success.

No Going Back Without Real-Time Solutions

Further applications of text analytics can be found, for example, in real-time applications for categorizing banking transactions. These applications automatically label each card and non-card transaction and assign it to a predefined category. This enables the monitoring and analysis of expenses and income for individual clients and selected customer segments. Consequently, banks gain a better understanding of their clients’ financial behavior, allowing for targeted, relevant, and, most importantly, personalized communication. On the other hand, clients can track and analyze their income and expenses down to the level of individual merchants, gaining insight into how much and in what categories they are spending their money.

Advanced Analytics Aids in Optimizing Branch Networks

“When a major Czech bank needed to reduce its number of branches, we assisted in deciding which to close and which to keep, based on geolocation data drawn from descriptions of payment transactions. By analyzing the frequency of occurrences in cities, districts, and even specific streets, combined with other parameters, we determined where and how often the bank’s clients move around. The more frequently, the higher the chance of keeping the branch,” says Dagmar Bínová.

Data-driven decision-making can advance many aspects of business. With digitization, modern IT infrastructure, and advanced data processing, you can significantly propel your business forward, potentially even outpacing the competition.