Banks Optimize Engagement With a Diverse Content Mix

Many banks are amping up their investment in content development. This is being driven by growing customer demand for financial advice, changing customer perceptions of financial providers and a need to differentiate from both established and new competitors.

Traditional content channels for banks include content-and-advice portals, surveys, blogs and newsletters. But it’s becoming obvious that banks looking to develop a robust and client-centric strategy are leveraging both established and emerging contact forms and channels – including videos, infographics, webinars, podcasts and of course social media platforms
– to meet customers’ changing consumption patterns.

Established Content Forms/Channels

Portals

Most leading banks provide portals that offer a combination of advice and content tailored to specific customer segments, such as:

Recently, bank-wide portals, which are then categorized into various business segments, have started to appear. Examples include U.S. Bank’s Financial IQ and Regions Bank’s Insights.

Surveys

Banks have been using customer surveys for years to both gain insights into changing perceptions and behaviors, and to highlight the bank’s thought leadership in specific areas of the market. A growing trend is for banks to carry out recurring (annual, quarterly, monthly) surveys, which are designed to generate regular press coverage and ongoing customer engagement.

Newsletters

A number of banks have recurring newsletters that they either publish online or distribute via email to opted-in subscribers. Many of these newsletters are titled “Insights”, including Regions Bank’s Wealth Insights and Commercial Insights magazines, which reflect the content and branding on the bank’s Insights portal.

Blogs

Blogs are also well established. They tend to emphasize financial education and well-being, and often have appealing names, such as MoneyFit (BBVA), do it right (Ally) and MoneyLife (MoneyLion).

Emerging Content Forms/Channels

Banks are also starting to develop and promote content on emerging content channels, such as webinars, webcasts, podcasts, videos and social media.

Webinars and Webcasts

During the pandemic, as banks were unable to host live events, webinars and webcasts became a key channel to maintain customer and prospect engagement. These channels have been most prevalent in the commercial banking space with the rollouts of new webinar series by BMO Harris (Expert Conversations), JPMorgan Chase (Treasury & Technology Trends) and M&T Bank (Managing Through Challenging Times). In consumer banking, JPMorgan Chase launched the Chase Chats webcast series.

Podcasts

In the past year, many banks also developed podcast series – including Bank of America (Treasury Insights) and Regions (Commercial Insights) – for commercial banking clients.

Videos

Banks have been using video to spotlight local small business owners, while helping to promote the bank’s local connections. Examples include Huntington Bank’s Support Local video series featuring real small business owners and Webster Bank’s similar small business video series called The Moment.

Social Media Channels

Finally, banks are using their social media channels not only to promote content that is provided through other bank channels but also to present new content, which allows the bank to extend its reach to customers and prospects who might not use the other channels.

Key Takeaways

To develop a multifaceted content strategy, consider the following:

  • Create a dedicated unit for continual content development, publication and promotion
  • Understand target market content needs and consumption patterns
  • Develop a consistent look-and-feel; create templates and guidelines to support seamless content provision
  • Develop a communications plan to promote the value of content development to internal stakeholders
  • Maintain ongoing customer engagement with recurring content (e.g., series of webinars, recurring surveys)
  • Where appropriate, use the content as a prospecting tool by listing relevant executives (with titles, emails and direct phone numbers)
  • Brand the content (e.g., give names to surveys, podcast/webinar series)
  • Identify best practices within the banking industry and from other industry sectors
  • Establish feedback channels to identify content needs and gaps

Strategies for Marketing Your Financial Literacy Program

As financial institutions seek to position themselves as trusted providers of financial advice and solutions, one of their key areas of focus is financial education.  Many of these firms have focused attention on establishing comprehensive financial education programs.  However, equal attention should be given to how these programs are communicated.  If you want to maximize the impact of your financial education program, consider the following methods to build client awareness and engagement.

  • Partner with national and local organizations seeking to grow financial literacy. Partnering with these organizations can take many forms, including publishing surveys or providing funding. In June 2017, Wells Fargo announced a $100,000 donation to Junior Achievement of Chicago.  Operation Hope has partnerships with a number of leading banks (including SunTrust, Regions Bank and First Tennessee Bank), who all offer the Operation Hope Inside financial well-being program in several of their branches.
  • Host or sponsor events.  Events constitute one of the key ways for firms to build direct engagement with their financial education programs.  Firms have many options on how they wish to scale and direct their investment.  MassMutual hosts FutureSmart Challenge events to provide financial education to middle school students, reaching 40,000 students in 17 cities to date.  In June 2017, SunTrust launched the “onUp on Tour” to promote its onUp movement in 45 cities.  And In October 2017, American Century Investments partnered with Investopedia to launch a Financial Fitness Tour, featuring a 45-foot bus, called “The Financial Coach.”  These firms have extended the impact of these live events with tweets and postings on online portals, and also host virtual events, including podcasts and webinars.
  • Generate engagement through games and contests.  In our highly interactive world, online games and contests can be very effective in enabling people, especially the younger demographic, to gain important financial knowledge in entertaining ways.  For the past four years, H&R Block has been running the H&R Block Budget Challenge, an online game that teachers can use to teach financial concepts to high school students.  In December 2017, The Hartford partnered with Junior Achievement USA to launch JA MyBiz Builder, an online experience that teaches entrepreneurial concepts to teens.  And GOBankingRates recently launched a competition (with a top prize of $1,000) to identify the best tips, tricks and tactics for navigating one’s personal finances.
  • Reinforce the financial education message via social media.  A number of financial firms are using Twitter hashtags to generate interaction around their financial education programs. Examples include Ally Financial’s #WalletWiseWednesday twitter series and Regions Bank’s @FinancialFitness hashtag (part of its Financial Fitness Fridays program).  Other ways of using social media to promote financial education include events (Jump$tart Coalition’s Facebook Live event to discuss deposit insurance) and social communities (Canvas Designed by Citi, a beta-testing community that enables Citi customers to co-create products and digital capabilities promoting financial wellness).
  • Leverage online and mobile banking platforms.  As consumers become comfortable with using online and mobile banking to perform a wide range of financial activities, some providers are starting to incorporate financial education tools into these platforms.  Bank of America recently added a money management and financial education tool into its mobile banking platform.  And Wells Fargo is planning to launch Greenhouse by Wells Fargo, a mobile banking experience that includes financial management tools.

 

Issuers Report Strong Credit Card Loan Growth Across FICO Segments in 2017

According to the latest FDIC Quarterly Banking Profile, U.S. credit card loan growth accelerated in 4Q17, rising 8.2% to $865 billion.

Given the strong overall growth in credit card receivables, are issuers focusing their growth ambitions on particular FICO Score categories? To address this question, EMI analyzed 10K SEC filings for leading credit card issuers.  Overall, we found that issuers reported strong credit card loan growth across their FICO Score segments. We also studied trends in different issuer categories.

  • In the aftermath of the Financial Crisis, the three leading issuersChase, Bank of America and Citi—focused attention away from near-prime and sub-prime segments and towards superprime consumers.  This led to significant declines in both outstandings and charge-off rates.  More recently, as economic growth and consumer confidence returned, these issuers have refocused on loan growth and are once again targeting lower FICO Score segments.  This is seen in the chart below that shows changes in outstandings by FICO Score segment between end-2016 and end-2017.  As these issuers are pursuing loan growth, their credit card net charge-off rates have also increased (+26 bps y/y at Bank of America, +30 bps to at Chase, +59 bps at Citi-Branded Cards North America).  However, charge-off rates remained below 3% for each of these issuers in 4Q17, and issuers should continue to focus on loan growth while charge-off rates continue at these low levels.

  • Second-tier national credit card issuers—Discover, Capital One and Synchrony—reported relatively strong growth, but with different FICO Score segment trends.  Discover reported 9% y/y growth, with no y/y change in share of outstandings for the <660 and 600+ segments.  Capital One had a similar overall growth rate (8%), but this was driven in part by the acquisition of the Cabela’s card portfolio, which boosted the >660 FICO segment’s share of outstandings.  It is also worth noting that the <660 FICO segment accounted for 34% of Capital One’s credit card portfolio at the end of 2017, compared to 25% of Synchrony’s portfolio, and 18% at Discover.

  • Regional credit card issuers present a mixed picture when it comes to the FICO Score segment composition of their credit card portfolios. This is driven by a number of factors, including a large variation in portfolio sizes, as well as their credit card underwriting standards.  Most issuers report growth across their portfolios, with strong growth rates in the low FICO Score segments.  Fifth Third reported very strong growth for its <660 segment, but this segment only accounts for 3% of its portfolio.  Regions’ 20% growth in its <620 FICO segment was driven by its launch of a credit secured card in July 2017.

Finally, as most issuers reported strong growth in their credit card portfolios in 2017, charge-off rates are also on the rise, growing 45 bps y/y to 3.61% at the end of 2017.  While the overall charge-off rate has risen from a low of 2.19% in 3Q15, it is down both from post-recessionary highs of 13.13% in 1Q10, and even the 4% levels in 2007, prior to the Financial Crisis.  With charge-off rates still below 4%, the leading issuers continue to be comfortable with promoting credit card loan growth.