By Stephenie Williams
Inflation is hitting record highs and continues to impact not only consumer spending, but consumers’ relationships with financial institutions as well, according to a recent survey.
Vericast’s recent Financial Services TrendWatch survey found that rising inflation – combined with market volatility, clogged supply chains and a looming recession – has formed a gap between consumers and the financial institutions they partner with.
According to findings, the gap was formed due to changes in privacy practices, consumer expectations for personalization, social changes and (a lack of) marketing innovation. To achieve business goals and ensure long-term survival, credit unions must seek to repair this void and successfully engage with consumers.
Top Financial and Marketing Trends
The most successful financial institutions seek first to understand and empathize with what consumers are experiencing--the market is far too competitive and unstable for guessing or assumptions. Once they understand the underlying forces at play, credit unions can achieve selling authenticity and deliver what consumers truly want.
Based on survey results, here are five of the top financial and marketing trends for 2022, which shed light on how to close the gap:
1. M&A threatens loyalty. A majority of consumers (75%) say they are very or somewhat likely to leave their financial institution after a change event like a merger or acquisition. If (and when) credit unions experience change events, they should focus more heavily on delivering consistent, high-quality customer service knowing that consumer loyalty could be challenged.
2. CTV is an untapped acquisition tool: Traditional channels like social media, email and direct mail ranked high for marketing usage, while the channel least used – connected TV (CTV) – holds the most promise. Industry data show that about two-thirds of the U.S. population are monthly CTV users. And while CTV is more popular among younger generations (80% usage for consumers aged 25-54), four in ten baby boomers also watch CTV regularly.
This is a largely untapped account acquisition tool that financial institutions must form an engagement strategy around to be successful in 2022 and beyond.
3. More privacy, more personalization: Search engines are increasingly eliminating third-party cookies, but survey data found that fewer than one third of financial institutions are prepared for a cookie-less marketing strategy.
While consumers demand more privacy, they also demand more personalization. With that in mind, financial institutions must figure out how to use the data they do have to serve enticing, personalized recommendations and offers to consumers.
4. Corporate responsibility is important for relationship-building: Financial service marketers don’t currently view corporate responsibility as an important part of their strategy. In fact, they ranked local brand awareness and social and environmental responsibility quite low on their list of priorities.
Conversely, consumers ranked community/ civic involvement and social responsibility high on their list of priorities and said they are more likely to partner with firms who match these values. Unfortunately, the disconnect between consumers and financial institutions will only get wider unless financial marketers start appealing to these important consumer values.
5. Loans are the competitive battleground. Consumers are open to working with different financial institutions, particularly to secure home and auto loans. Beyond loans, however, most consumers (86%) are not inclined to make a switch in their financial institution.
Yet, 72% of financial institutions identified account acquisition as a primary driver of revenue this year. While loans might help institutions get a foot in the door with consumers, it’s unlikely to lead to a full relationship, highlighting a divide between institutions and the audience they are trying to target.
The Right Message at the Right Time
When it comes to forming deeper relationships with consumers, knowledge is power. Without research to understand underlying market conditions and the rise of new trends and patterns, credit unions are flying blind.
While there’s no one-size-fits-all solution, if credit unions are intentional about getting the right message to the right consumers at the right time, their relationships will be stronger for it.
Stephenie Williams is VP Financial Institution Marketing Product & Strategy with Vericast.