The proliferation of digital channels is changing the way customers use banking services, with digital predicted to soon emerge as the primary channel of interaction.

Given this trend, banks are focusing on digital marketing initiatives to target this growing segment of customers. Location, context and behavior-specific real time event led marketing, driven by analytics will likely be the norm in the future, says information technology, consulting and outsourcing company Wipro and nonprofit organisation Efma.

“Digital technologies, social media and the explosion of data are redefining customer engagement models,” said Wipro VP and head of banking and financial services Rajan Kohli.

“If we look at the marketing spend reported by the banks in our survey, traditional advertising represented just 55 per cent of the total marketing spend. The CMOs that we spoke with made it clear that the role of the CMO is changing as banks adapt to the development of new channels and capabilities.”

According to Wipro and Efma’s first ever global retail banking digital marketing report, only 13 per cent of the banks surveyed demonstrate the highest level of maturity in digital marketing. The maturity of the banks in digital marketing was measured on eight different capabilities which include capability on data management, offer delivery, marketing processes and usage of analytics.

It was also revealed that majority of the banks do not practise real-time event driven marketing and the ability to focus on personalisation.

The study also found out that social media was not yet a part of mainstream marketing and is still not considered a key customer interaction channel. It was discovered that social media efforts were mainly managed by the marketing department followed by the branding and communications team. Also for over 80 per cent of the banks surveyed, their social media spend was less than €500,000 per annum.

Given the inevitable trend toward greater use of digital channels by consumers, the Wipro/Efma report recommends that banks should:

• Consider how they expect customers to interact with the bank five years from now, and particularly how they envisage customers will buy financial products in the future.
• Carefully assess current digital marketing capabilities.
• Develop a plan for investment in digital marketing capabilities which will ensure that the bank is in a position to get ahead of, or at least keep pace with, competitors and changing consumer behavior.
• Monitor closely the developments in “big data” and where possible take the initial steps of testing some applications of the new technologies that are available.