Consumer prices in the U.S. have posted their biggest annual gain since 1981, primarily driven by spikes in the cost of gasoline and other goods. Earlier this month, the Federal Reserve raised short-term interest rates by 0.50% in an effort to slow inflationary pressures currently gripping the U.S.
And while it appears the Fed will continue to raise the interest rate to combat rising inflation through the end of the year, it’s more important than ever for financial marketers to keep their foot on the gas. But how do you stay relevant and connect to customers amid this economic influx?
As the economy shifts, financial services feel the squeeze
It’s no surprise that the major areas of financial services are seeing a decline given the state of the economy. Consumers are being hyper selective about which institutions they use for their financial needs and seeking out the best opportunities to stretch their dollars as costs rise.
Credit card impact: In short, in-market customers are harder to find right now. Not only is competition increasing, but newly available options like Afterpay, Klarna, and other “buy now, pay later” services create yet another layer of challenges - preventing financial services institutions from gaining a comprehensive view of a consumer’s total debt level before extending credit.
Deposit impact: Acquiring new deposit customers will remain a key focus area for banks as interest rates rise but will prove challenging, especially for players in the mid-market. In the current economic state, consumers might be more likely to shop around for the most beneficial rates of return.
Mortgage impact: It’s a seller’s market. Housing inventory is at an all-time low and home values have sky-rocketed, though some experts predict select cities might see some relief in the next 12 months. Mortgage rates continue to rise, pricing out millions of Americans but also creating an opportunity for alternative solutions like ARMs and balloon mortgages. Concurrently, rent is also rising, creating a crunch on an already spread-thin sector.
Loan impact: Like everything else, loans are also getting more expensive. A customer interested in taking out a new personal loan will likely find themselves paying more for the same money or being qualified to borrow less. Many anticipate the market moving toward lowering credit requirements in an attempt to broaden the funnel for potential loan applicants.
In times of turbulence, what’s a marketer to do?
For financial services marketers, these economic times affect how (and why) you speak to consumers. The ability to generate business across different product lines intensifies, as customers are more selective about which financial services they are willing to invest in.
Historically, financial institutions have held onto traditional forms of marketing, often putting digital on the backburner. As a result, many are behind on strategies that aim to reach the right people most likely to convert.
Data, data, data
The best digital strategy for financial service marketers is rooted in first-party data. Building a 360-degree view of your customer—both those you already have and those you hope to attract—creates stronger affinity and develops the right messaging. How is this accomplished? Effective identity management, founded on a privacy-first framework.
And while acquisition is particularly challenging in tough economic times, retention should be top of mind. Data rich insights enable marketers to activate with their customers before they need a new service.
Engaging new tech, like AI and CTV
Financial institutions need to prioritize using technology to enhance the overall customer experience. One of those ways is through artificial intelligence.
Start by replacing stale, static data and harnessing the power of artificial intelligence to identify ideal prospects and customers in real-time. Industry-leading AI-based models offer privacy-protected views of millions of people, allowing you to create lookalike audiences of high-quality prospects using real-time intent data that is constantly optimizing.
With AI-powered models, you’ll be able to identify early behavior — including upcoming life events — allowing you to attract higher propensity candidates and stay relevant with existing customers by delivering messages that truly resonate with their evolving priorities. This technology will also keep in mind which channels they prefer to engage in. For example, as connected TV usage increases, ensure you can reach these customers where they’re spending more time and know which channel they’ll most likely respond on.
How to use identity, data and AI to achieve a lifetime of financial loyaltyGet the guide
Meaningful messages matter
The world isn’t going to go back to “normal” anytime soon. Between the oscillating rise and fall of COVID-19 infections, the war in Ukraine and the ever-changing economic landscape of the U.S., there is no quick fix for getting customers through the door. This is precisely why it’s the perfect time to start investing in strategies that do more than slap a band aid on a growing problem.
Customers demand data privacy but also want personalization and ease of use—from all the brands they interact with. By using verified transactional data and powerful AI technology, you’ll deliver timely, relevant interactions that accelerate and deepen customer relationships with your offerings. So don’t miss out on knowing the right moment to introduce new products that existing or new customers are in-market for. Be empowered to predict customers’ current and future needs to build a lifetime of loyalty, regardless of what global disruption is next.
Ready to find out more about how Epsilon can help your financial services company reach customers at every step in their journey, using AI to help acquire new customers and ensure they keep coming back for more? Get in touch with us today for a complimentary consultation.