Comperemedia’s Chief Insights Officer, Andrew Davidson is well known for sharing the latest insights on financial services products and marketing strategies/innovations on his LinkedIn, as an event speaker and as a host on Mintel’s Little Conversation podcast. In this bi-weekly recap, he will provide you with the latest news and insights happening in the financial services industry.
Here are the 6 things you need to know:
1. Fifth Third’s marketing mantra
Embrace the quirk! That’s the mantra Fifth Third CMO Melissa Stevens leverages to guide brand and marketing strategy as revealed at the Financial Brand Forum 2024 in Las Vegas.
The bank’s name has been used creatively in marketing campaigns and community engagement for decades. It has even been used in product design to turn a perceived quirk into a strength.
- The bank has celebrated Fifth Third Day (May 3) since 1991, this year providing millions of meals to support people facing hunger across its footprint through a combination of volunteerism, donations and fundraising efforts.
- Since Fifth Third Day in 2017, 496 “Fifth Third Day Babies” have received gifts of $1,053 to go toward any 529 college savings account.
- The bank offers a credit card with 1.67% cash back (5/3 =1.67).
A message for all: There are lessons here for all but particularly for small banks and credit unions looking to find a way to compete against bigger brands with bigger budgets. Lean into your identity and amplify what makes you unique to stand out.
2. SECU brings humanity to digital
One of my favorite sessions from the Financial Brand Forum 2024 was a presentation from Becky Smith, Chief Revenue Officer at SECU – Maryland’s largest state-chartered credit union – on creating “human-centered connections.”
In 2021 SECU created its first Virtual Financial Center to combine “the convenience of digital interactions with the comfort of human assistance.”
Members can complete 95% of the activities that they can do in-branch and have the option of scheduling an appointment to speak with a Member Advisor via video whether to open a new account or set up a wire transfer or report fraudulent activity.
Members can even “co-browse” with an SECU advisor who will show them how to navigate digital banking in real time to build their confidence.
Flexible and personal:
- The choice is yours. It is fascinating to see this play out in marketing. On Comperemedia, we captured emails in May inviting SECU members to a free FINANCIAL WELLNESS CHECK with the option to schedule a virtual or in-person appointment to discuss things like unexpected expenses, budgeting, debt management, and financial goals. That’s added value and the virtual/face-to-face options show that SECU understands that its members may need the flexibility to speak with an advisor outside of traditional branch hours.
- Personal connections. SECU has reimagined digital to maintain personal connections with its members. It is a way of maintaining its credit union advantage when other financial brands fail to prioritize those human-centered touchpoints.
Source: Comperemedia Omni 05/01/2024 – 05/17/2024] as of 05/24/2024
3. Three perspectives on AI from the Financial Brand Forum
- “It’s not enough to do things marginally better. It needs to be transformative,” said futurist Mike Walsh. “Products will become platforms, transactions will become AI-powered experiences and apps will become agents.”
- Former PayPal CEO, Dan Schulman, warned of the rapid rate of change and gushed over the “poetic prose” and mind-blowing capabilities of ChatGPT5 (coming this summer) which will be a 5X improvement over ChatGPT4 and was developed in just 4 months. Imagine what it will be able to do in just a few years!
- NYU Stern Professor, Scott Galloway, predicted that the biggest impact of AI is loneliness as young men, in particular, will seek out increasingly realistic virtual companions.
Call to innovate: At the Financial Brand Forum 2024, successive speakers took to the stage with a collective warning for banks and credit unions to embrace the change that is AI. I think it’s a safe bet that AI will be the dominant theme at every industry conference right now with the technology already causing widespread disruption. One indicator – Bank of America was granted 644 patents in 2023 (a company record) of which 1 in 5 were related to AI. Whether in product or marketing and beyond the pace of innovation is accelerating and AI is the fuel.
4. Stripe promotes Tap to Pay on iPhone
Look up! It’s an ad from Stripe! I spotted this ad from Stripe above 14th Street in NYC’s Meatpacking District (just along from the Apple Store) during Memorial Day weekend promoting “Tap to Pay on iPhone” (launched 2022 in the US).
A recent survey from TD found that “one-third (33%) of micro business owners (MBOs) are currently facing challenges in their day-to-day operations due to not having the necessary payment device or hardware to accept customers’ preferred payment method,” and with Tap to Pay on iPhone these businesses can offer the convenience of mobile payments to their customers without additional hardware or subscription costs.
A win-win:
- Getting the message out to merchants. Why blast out a message for merchants across 14th Street? I’ve been noticing more financial services ads targeting small business owners – from Stripe to Shopify to Mercury – showing up in places where you might expect to only see ads targeting consumers. In 2023 there were a record 5.5 million applications to form new small businesses with sectors like food and retail, which rely on in-person payments, growing rapidly. 14th Street is not only a high-traffic area, it has an Apple Store nearby plus the Meatpacking District and Chelsea Market have plenty of small merchants.
- Race to the moon. We have seen a flurry of Tap to Pay on iPhone launch announcements recently as payment companies seek to capture this target market and banks jump on board to offer a new benefit to their small business customers. In March PayPal announced Tap to Pay on iPhone for Venmo and PayPal Zettle Businesses in the U.S. In Feb, TD announced that it would be offering the capability to its US customers via Autobooks (TD is an investor). Why? “With an offering like Tap to Pay on iPhone, we’re improving the experience for our customer, and our customer’s customer – it’s a win all around,” said Amy Dinkar-Patel, Head of Small Business & Commercial Distribution at TD Bank.
5. Capital One puts late fees back up to $40
Recently I posted when Capital One changed its late fees to $8 for new card applicants ahead of the CFPB’s ruling that was scheduled to go into effect on May 14.
It was a surprise move at the time because the ruling was still facing legal challenges and potential delay. Did Capital One know something the rest of the industry didn’t?
A federal district judge subsequently granted an injunction sought by the banking industry to freeze the restrictions and ruled that funding for the CFPB was unconstitutional.
At some point after the pause was announced Capital One switched its late fees back to “up to $40” from $8 on its website for MOST of its cards while keeping the cash advance and BT fee increases that had been implemented recently to mitigate the loss of revenue.
Capital One’s gamble:
Capital One’s decision to pre-emptively lower late fees to $8 was a gamble but the aim was to hit the ground running for what seemed a likely, if still uncertain, outcome and would have positioned them favorably with consumers had the rule gone into effect. The switch highlights the risks associated with anticipating policy.
6. Chime’s “Dear anyone” letter
Chime went old school during Memorial Day weekend leveraging print media to create awareness for its new MyPay feature.
The fintech took out a 2-page ad in Saturday’s New York Time’s framed as a letter to “Dear anyone” addressing “most Americans” who are “stretching their funds until payday.”
By scanning the QR code those interested could enter their email address to join a waitlist in anticipation of the launch this summer.
MyPay allows Chime members to access up to $500 within two days for free or instantly for a fee ($2 per advance).
Generating Buzz:
This is a great example of finding a new way to generate some buzz and excitement around a new financial product launch. Chime was already out there promoting the MyPay waitlist via email and with ads on Facebook/Instagram but, ironically, it is the print ad (reinvented to connect with digital) that stands out as unique. Financial services brands need to build excitement and a strong narrative for their product launches to stand out in a competitive market and gain traction.
