Wednesday, September 08, 2010

Online Marketing Scenario in Banking Business

Majority of the bank marketing executives surveyed (include 49 retail banks and 93 credit unions) are not aware of how much their bank spends on online marketing. As per the Financial Brand’s author Jeffry Pilcher,

“Most financial institutions invest almost nothing in online marketing (or have no clue). This suggests one of two things. Either banks and credit unions don’t take online marketing seriously enough yet to invest in it, and/or they believe that online marketing doesn’t require a significant investment.”

Not only these. There are many more data points to look at.

  • They allocate around 5% of their marketing budgets to online activities
  • 22% do not track or measure their online activities, while only 8% do so all the time
  • 32% were not sure if their organization invests any money in online marketing
  • While most financial institutions embrace email marketing, a surprising 31% don’t.
  • 45% of banks and credit unions do not have online marketing staff at all
The other data points from the survey are 57% of banks invest in search engine optimization (SEO), while only 36% of credit unions do the same - a difference of 21%. By an even greater margin, banks are much more likely to utilize search engine marketing (SEM): 57% vs. 23%. Banks are 20% more likely to have microsites, and are 36% more likely to run banner ads than their credit union peers. Credit unions are less likely to have a mobile phone app. They are, however, more likely to have a blog, an online newsletter and ads in their eStatements. So, online marketing guys you sure have more business here. Catch them soon and if you get it, do not forget to call me for a drink.

What can be the reason as to why these banks are not using online marketing activities as other businesses do?

They seem to think that their customers and prospect already know them and their website and they hardly need to use Google to reach their website. They should understand that if they are not on top in Google or any other search engines for their business related keywords, then their competitors will sure be there on the first page and will be losing business to them. Lead generation for banks is the main source of generating business. Be it generating deposits, insurance, loans or credit cards. People still search on internet for better rates and services. If your website is not on top then your competitors website will sure be.

Being on Twitter or social media really helps to reach the public in much better way. It is a perfect channel to provide better customer service. But, it may hit you back if not done in a proper way.

PPC, banner ads, lead generation, blogging… there are many more channels to promote the banking business. They surely need to understand the results this media can get.

I will be interested to know what the readers will feel and please do comment your thoughts. Online Marketing channels is sure to be the low-hanging fruit opportunities for banks to further engage with their customers and the prospects but it is not being done.

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