The demographics of digital marketing

In some institutions today, the term "digital banking” is still synonymous with Internet banking. But at a growing number of banks and credit unions, digital banking means much more.

For example, most executives we talk to about digital banking use the term to describe innovative technology they are utilizing to streamline operations and improve account security. Or, they get excited talking about how digital marketing can be used to identify new prospects, get a jump on competition, expand into new markets, or create spin-off businesses.

In some institutions today, the term “digital banking” is still synonymous with Internet banking.  But at a growing number of banks and credit unions, digital banking means much more.  

For example, most executives we talk to about digital banking use the term to describe innovative technology they are utilizing to streamline operations and improve account security.  Or, they get excited talking about how digital marketing can be used to identify new prospects, get a jump on competition, expand into new markets, or create spin-off businesses.

So where is digital banking actually headed?  

In our opinion, digital banking will eventually encompass both the digital marketing and digital delivery of every deposit, loan, and ancillary service that you offer.

If you look closely at your major customer groups, it’s easy to see the impact digital banking has already had on them.

Consider these markets, for example;

* Millennials 

* Middle-Aged Adults

* Boomers 

* Seniors 

Millenials: Without question, the 40 million millennials who are in today’s workforce provide the driving growth and acceptance of digital banking.  

For example, these 20- to 32-year-olds:

• Don’t go into banks or branches, but prefer to do their banking online.

• Quickly switch institutions to get a better rate on a credit card or other loan.

• Have grown up using computers, smart phones, and social media.

• Regularly use digital tools, such as Google.

• Are open to new or different ways of banking.

• Pay almost all of their bills with cards or phones, and carry little if any cash.

Middle-Aged Adults:  The people in this market segment typically began their banking relationship with a savings or checking account that was opened in person in a local bank or credit union. 

These late 30s to mid-50-year-olds:

• Still make some personal visits to their bank or credit union.

• Like to use mobile services because it saves them time. 

• Utilize direct deposit for their paychecks.

• Like the convenience of mobile phone deposit.

• Use their phone to monitor stock and retirement portfolios.

• Like using credit lines and online loan apps.

Boomers:  This market still values the personal relationships they have built with their bankers over the years.  However, they are still open to the benefits of digital banking, and provide bedrock deposits at many institutions.  

These mid-50s to early 70-year-olds:

• Have a long history of doing their financial business face-to-face.

• Use online and mobile banking services 50 percent or more of the time. 

• Use debit and credit cards and pay off the balances monthly.

• Like rewards programs.

• Appreciate personal financial advice, especially during life-changing events.

• Are less likely to change institutions, unless they are shopping CD rates.

Seniors: For this market, account security is often the biggest concern.  They also value personal financial help whenever and however they can get it.

These mid-70s and older people:

• Still think digital banking is a great way to lose your money.

• Will use mobile banking, especially if they’re snowbirds.

• Don’t want banking to be more complex. 

• Are typically more concerned with deposit offerings than loans.

Digital marketing opportunities  

To maximize your return from new digital products and services, consider how they will impact each of your major customer groups.

And as you know, this is not always easy.

If you are marketing a new mobile deposit service, for instance, you could easily assume that it will have more appeal to millennials than boomers.  But on closer examination, you might determine that boomers value this service just as much, but are simply apprehensive about using it.

A digital solution to this marketing challenge would be to create a short YouTube video, that features one of your star CSRs explaining how to use mobile deposit.  This way, boomers could learn how to use it from  a familiar and friendly face—and even watch the video several times until they understand.  

Almost every boomer already watches “how-to” videos, so marketing a short instructional video to them would be easy.  Of course, boomers also typically have more money to deposit than millennials do.

Once you have your instructional YouTube video, offer it to your other major markets.  You might be surprised at how people in each group react.

For example, my 91-year-old father, who lives in a rural community, recently had his VA physical. 

After being examined by the nurse practitioner, he was told to wait a few minutes until the doctor was ready to talk with him.  Five minutes later, the nurse practitioner came back into his room, pulled open a curtain, and turned on a big-screen TV.  Then she introduced the doctor—who began speaking to my father from a city 250 miles away. 

When I asked my father what he thought of this, he said, “The doctor on the TV was really nice and friendly.  Plus, she had a sense of humor.  It was just like she was in the room. I actually liked her better than the nurse who first examined me.”

If health care can be successfully delivered to a 91-year-old by a physician who is 250 miles away than digital banking should be a snap.

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