Banking on change

Implementing change and innova­tion at any organization are import­ant tasks.

But they’re perhaps even more challenging in financial insti­tutions, which are notoriously risk-averse.

For the past five years, that’s been David Howard’s biggest professional challenge as the president of digital strategy and innovation at 118-year-old OceanFirst Bank, headquartered in Toms River, New Jersey.

For the past 30 years, the bank’s marketing has been conducted via TV, radio and print. Now, as Ocean­First expands its geographic reach—moving into New York City and Philadelphia and acquiring seven banks since 2015—transitioning to digital, intent-based marketing has become a necessity, Howard says.

“Intent-based marketing is about marketing our products based on consumers’ intent to adopt, purchase or consume banking products. That intent may have been either explicitly or implic­itly conveyed by the subscriber,” Howard says. “As the customer base is moving toward digital transac­tions and interactions, we felt that we had to keep up with our existing customers and find new custom­ers—and that means ramping up our digital efforts.”

Howard discusses how the bank built its digital strategy to focus on what matters most: the customer.

What business forces have led OceanFirst to try to diversify its reach, both geographically and demographically?

David Howard (DH): We’ve been growing dramatically in the past few years on an organic basis as well as on an acquisition basis. We want to make sure that we’re providing bank services all the way across the demo­graphic spectrum.

With the rise of fintech companies and online challenger banks, how does a regional or community bank stay competitive?

DH: There are some really domi­nant players in the digital bank­ing space: the big national banks. Then there are a whole bunch of tech companies that are operat­ing like banks, and they seem to be getting a lot of press and a lot of growth. It could be daunting to regional and smaller community banks to start this process if they have not already begun to focus on their own digital strategies.

When I look at us, a midsize regional bank, I say: The online channel is the most important channel that we have for bringing in new customers. That’s where every conservative, old-school bank should be. So I’m intrigued at how many banks seem to be missing the importance of digital marketing and taking care of their digital customers.

How have your internal teams changed as you made the transition to digital?

DH: We’ve been working on this for almost five years now. We started off with just three or four people. Now, we have almost 80 people working on digital marketing, digital strat­egy, artificial intelligence, data science and our digital customer service. So the investment is big. We’re taking the time to make sure our digital tools are up to speed, our staff knows how to train our customers to use them and the customers like them.

How important is digital marketing to a brick-and-mortar chain of banks?

DH: They will never land future digi­tal customers without having great digital tools. We’re now opening up more accounts through our digital channels than in 25% of our brick-and-mortar branch locations.

We need to be really good at digi­tal. Otherwise, we’re only getting people that drive by our buildings.

As you’ve supplemented your traditional marketing, what have you learned by moving into the digital space? What are some pieces of data that have been really illuminating to you?

DH: Having the ability to determine ROI on our marketing spend is some­thing that, frankly, we have always wanted to be better at doing. We can now understand how many times we’re reaching individual prospects before we get them to take action. We can then follow that prospect’s jour­ney all the way through coming to our website, applying for an account with us, opening up that account and then expanding that customer’s wallet share.

As you move into more urban markets, your potential customer base becomes younger. How are you appealing to them?

DH: We’ve worked on the style and image on our website and then on our marketing materials incor­porating fresher, younger, more modern content.

In the world of banking, our customers generally like what’s solid, safe, steady, reliable and conservative. And so shifting too far down the road to what millen­nials and younger generations want may not necessarily work well for the banking space. If more old-school customers aren’t recep­tive to this approach, and it is not exciting new-school customers either, we will reevaluate.

You’ve shifted your strategy to focus more on intent-based signals. How has that benefited your marketing overall?

DH: It’s a much more productive use of our advertising budgets. Before we started doing trigger-based marketing, we were doing a lot of digital advertising that was just so broad: everybody at all times, simi­lar to the old-fashioned style. The return on our marketing investment is significantly less with a broad approach than when we are target­ing the right person at the right time with the right piece of content.

Image credit: Illustration by Denise Nestor