Is Data the Key to Enhancing Bank Customer Relationships?

While megabanks can pour nearly unlimited amounts of money into marketing, community banks need to focus on two things: their overall strategic goals and which channels yield the best results. Without data, banks have limited ability to identify opportunities for growth and measure the results of various marketing campaigns. 

Financial services are fragmented across many institutions, so banks might find the most “bang for their buck” by investing in expanding existing relationships, rather than chasing new accounts. 

In a 2023 survey by GOBankingRates, more than half of consumer respondents said they would have different types of accounts across various banks. Whether community banks are optimizing for interest rates, perks or other features, they should ensure that existing customers are aware of their full product offerings—and target customers in a way that feels relevant and personalized.

“You have limited opportunities for mind share,” says Rob Birgfeld, ICBA’s executive vice president and chief marketing officer. “You have to take that responsibility or that opportunity seriously and make sure you’re as effective and engaging as you can be with that moment in time.” 

To do this effectively, community banks need to dig into the data to recommend the right products to the right customers. 

Audit your available data

Any data-driven strategy has to start by identifying what problem the data is looking to solve and what action or decision it will drive as a result. You may not have a perfect end-to-end experience, but the data examination process can help you evaluate an approach to identify and validate use cases.

However, sometimes, banks have underlying data quality issues, such as duplicate customers in the core. In some cases, an outside solution or company can help with cleanup or making sense of the data, suggests Brian Bauer, CEO at Revio Insight, a fintech and ICBA ThinkTECH alum that uses data to provide revenue and deposit opportunities. 

Bauer cautions that banks need to be clear about what data they need and why. “A data lake or warehouse is a very expensive proposition and often involves hiring multiple people and a lot of expensive services,” he says. “Do you know the strategic questions you’d like to have answered?” 

“Community banks inherently have so much data at their fingertips. I would start by talking to your core provider about what reporting tools they have to help you better understand your data.”

—Julie Waddle, FNB Community Bank

Data bolsters existing tactics

Gabe Krajicek, CEO at fintech and ICBA Preferred Service Provider Kasasa, points out that another important data point is understanding the profitability of the products you’re promoting. 

“You can compare your total marketing acquisition costs with the total product profit and make sure you’re in the money on that,” he says. “A lot of financial institutions don’t effectively track profitability, and if you’re going to be a data-driven marketer, that’s a huge data point to be in the dark on.”

Birgfeld suggests that community banks don’t need to run disparate campaigns on multiple channels but can instead focus on what’s most effective based on conversion data. “Getting better is not worrying about your peers or your competitors,” he says. “Look at yourself against yourself. … Identify the data points that you feel most confident in and represent success.”

FNB Community Bank in Midwest City, Okla., uses data to customize emails to customers without certain account types, such as those with no checking account or no auto loan. 

The $460 million-asset bank also uses a digital engagement product called Micronotes to target specific customer segments that have a high propensity for an auto loan, may need additional funding for an upcoming project or might be interested in moving funds to a CD. Often, identifying the right customers means simply looking at historical data and identifying the core attributes that customers with certain products have in common.

“Community banks inherently have so much data at their fingertips,” says Julie Waddle, senior vice president and marketing officer at FNB Community Bank. “I would start by talking to your core provider about what reporting tools they have to help you better understand your data.” 

She also suggests identifying the top 100 customers by deposit dollars or loans and sending a letter or gift to thank them for being a wonderful customer.

Connect your products to customers

While data may drive the tactics, Birgfeld notes that all engagement should be highly personalized and more than “Hi {insert name}” in an email message. 

“It’s about putting something of value in front of the customers,” he says. “That is what data can inform. If you start a conversation with something that’s relevant, there’s more likely to be a conversation than a transaction or ‘delete.’”

Personalization and customer conversations can only happen if the product or offer sparks interest. “You’ve got to have something from the product perspective that customers [hear] through the noise,” says Krajicek. “Thinking ‘Who does this product point differentiation appeal to?’ is step number one.”