Customer Acquisition Challenges: Web 2.0 Could Hold the Keys
For some time, even those entrenched in Internet marketing and technologies struggled to define the term (brings to mind "GRC"), and nowadays it seems more appropriate to describe web 2.0 by giving examples of specific websites. For example, MySpace.com is a web 2.0 website. iGoogle and Netvibes, which offer users the opportunity to personalize their home pages, are examples of web 2.0 applications.
The easiest way to describe web 2.0, though, is to look at the evolution of websites and web services. We all remember a time when websites were simply static pages of content. Perhaps there were a few animations here and there, but for all intents and purposes you would click on a link, read something, then click on another link. There was not much interaction going on. Today if a website does not have some kind of communication channel, marketing "widget" or interactive feature, it's not considered a modern website. This is the core of web 2.0 - giving users some features that enable them to contribute and communicate.
Today if a website does not have some kind of communication channel, marketing "widget" or interactive feature, it's not considered a modern website.
What does this have to do with banking?
I've already covered the reasons why Generation Y should be a marketing target for financial institutions today, given they make up the largest part of the current population in the U.S. And Generation Y is the main proponent of web 2.0 technologies. They demand it. So, it makes sense to market to this generation via venues they are familiar with and embrace. This is a generation that has given in to privacy concerns - they know they are being watched, and almost everything they do online can be traced. So, there are fewer barriers for this generation to let their voice be heard and contribute, especially via web 2.0 applications.
Facebook is currently a very popular website, and I've often heard it referred to as a "more mature" MySpace. At its heart, Facebook is a social networking website where people can connect with friends and find other people with similar interests. What's important is that the user demographics of Facebook show that, on average, the typical user is a bit older than the typical MySpace user. This may correlate to, for a financial institution, a person that might have their financial stability top of mind vs. younger counterparts that are just getting a taste of personal finance.
What's even more important for financial institutions, though, is that a recent study by WorkLight shows that 1 in 4 Facebook users would switch banks if they were able to obtain online banking via web 2.0 gadgets. In addition, almost half of the 1000 respondents indicated that yes, they would take advantage of web 2.0 gadgets to access online banking.
So, to summarize what's going on: We have a huge population of upcoming potential customers for financial institutions accessing, using and asking for more web 2.0 type applications. And there are two leverage points for the proactive financial institution: Reach these users where they are likely to go online, and create banking applications that can be accessed on newer devices - the advent of banking 2.0.
I'm convinced we will look back 5 or 10+ years from now and say that 2007/2008 is clearly the time period the Internet and web applications moved into a new realm. As relatively new as online banking is, with the advent of web 2.0 applications and devices we are heading into an even newer environment. Take the recent announcement of the software development kit (SDK) for Apple's iPhone. It should be only a matter of time before we start seeing targeted applications developed to allow iPhone users to access their finances via their phone. I won't believe Apple is the only company that will allow these types of applications to be developed, and, in fact, mobile banking has already hit the masses.
Larger financial institutions have already begun meeting to discuss how to take advantage of web 2.0 applications and gadgets, and many of these services have already made it into production. For the small and mid-sized institutions it will become an even more important goal when it comes to customer acquisition to utilize these types of applications and services to ensure they are reaching a huge potential pool of future customers. This will ultimately give proactive financial institutions leverage over their slower-to-react counterparts when it comes to customer acquisition.
Tell me, has your financial institution embraced web 2.0 and incorporated these types of applications and services into your marketing initiatives?