- Product innovation on its own is insufficient if you can’t communicate benefits to customers in ways that are personalized to their needs.
- Customers are tired of being sold to—financial services brands need to shift from pushing “next best product” to encouraging “next best interaction” in order to effectively drive acquisition, retention, and monetization
- Financial services brands, from challengers (FinTechs) to incumbents (big banks), must rethink their monetization strategy to ensure long-term sustainability
Erin Bankaitis | Interview
Erin started at JPMorgan Chase as a college intern and worked in human resources planning and analysis and investor relations. She eventually moved into a technology strategist role, where she focused on enhancing JPMorgan Chase’s digital wealth management offerings through strategic partnerships. She later helped define the firm’s technology strategy with the CIO and identified key startups across finance, marketing and sales technology.
Inspired by her collaborations with these emerging technologies, she jumped at the chance to join Braze in September 2019 as a Strategic Business Consultant. Massive Rocket sat down with her to discuss where banks are currently falling short, how she thinks about growth strategy, and what the path to sustainability through modernization looks like.
Hi Erin, thanks so much for joining us. Can you first tell us a little more about your career to-date?
My career’s been centered around data analysis, with the goal of communicating large-scale, data-driven insights to help companies and investors make credible, informed decisions. In my previous role, I focused on assessing and building partnership operations between JPMorgan Chase and tech companies, covering everything from wealth management tech (think “robo-advisors”) to marketing platforms.
I’ve always been very curious about industry disruption and back in 2016 I noticed that investors were starting to question what, exactly, big banks were doing to compete with financial technology (FinTech) brands. From my perspective, big banks really weren’t doing enough—they were mostly resting on their laurels, especially when it came to customer engagement tech. And because I was eager to be part of the conversation, I decided to move over to the startup world and tackle this issue from the other side.
Can you tell me about Braze?
I first encountered Braze while researching customer engagement platforms on behalf of JPMorgan Chase. I was impressed by their brilliant product, standout culture, impressive funding, and ability to scale with well-known, reputable clients.
Truly understanding each customer and using that understanding to add tangible value to customers’ lives is crucial for banks, because most customers aren’t particularly interested in hearing from these brands unless they’re adding value or helping them avoid financial pain. Banks talk a good game about the importance of knowing your customer (KYC), but many do a mediocre job despite investing millions in the effort—ending up with only basic, regulatory-mandated insights that can’t support modern customer engagement.
Our product is built to help banks—and all industries, for that matter—build trust and humanized connections with customers in a scalable, secure manner. You have the ability to understand how each customer’s behavior is evolving and to reach them in targeted, responsive ways across the full range of messaging channels, all without sacrificing security or privacy. On the commercial side of things, Braze doesn’t limit itself to being a technology partner; instead we’re all-around business partners, helping household names like Venmo, Intuit, Stash, Chime, and Yolt achieve their larger business goals.
And what does your role specifically entail?
As a Strategic Business Consultant on the Braze team, I’m focused on advising our most strategic prospects and clients on growth strategy. We provide data-driven industry perspectives, support growth framework implementation, and carry out business case analysis, all with the goal of helping our clients make well-informed decisions that can help them grow more effectively. That means spending a lot of time analyzing the impact of Braze across our customer base and working to understand what makes some campaigns and strategies more impactful than others. It’s really rewarding, especially when we’re able to show clients how to make their customer engagement efforts more effective.
Did you decide to join Braze because you felt that banks were falling short when it came to customer engagement?
In short, yes. I’ve always found it strange that banks spend billions on product innovation but fail to prioritize communication and retention strategies around those products. The end result is often that consumers are unaware of key products and/or don’t know how to use them in ways that will provide the most value.
Consider rewards. Consumers love them and have proven time and again that they’re willing to switch providers based on rewards—but many great rewards fly under the radar. I remember going on vacation in Florida and discovering that my credit card would have covered my rental car insurance only after I’d splashed out a pretty penny. The fact that my bank could have told me about this benefit but failed to do so made me feel betrayed, honestly. These broken customer experiences erode trust, and this kind of story isn’t unique to me.
This lack of communication and transparency exists throughout the industry and it compounds situations that are already troublesome for customers. Think about the sheer amount of time it takes to open an account or apply for a mortgage. For regulatory or logistical reasons, it may not be possible to complete these processes faster, but it’s possible to make the experience feel better by communicating. I always use the analogy of ordering a pizza: You may not necessarily need the pizza delivered faster, but you want to know when it’ll arrive, so you’re not worrying about it unnecessarily. I encourage banks to seek inspiration outside of their own industry—in this case, the Domino’s pizza tracker—to find ways to enhance how they communicate with consumers.
Let’s talk about growth – how does your team advise on growth strategy at Braze?
At the end of the day, a best-in-class growth strategy requires brands to ensure that the acquisition, monetization, and retention efforts are working in tandem. We see a lot of marketing teams over-index on acquisition and neglect retention, which drives up costs and hurts business results in ways that are often unsustainable.
Retention is essential to long-term growth and maximizing it requires brands to identify and encourage key behaviors—we call them “high-value actions” (HVAs)—that have disproportionate positive impacts on their downstream metrics (e.g. if a user setting up direct deposit within their first week leads to higher LTV). These HVAs usually aren’t product upsells; they’re steps toward a better customer experience and are often driven by clear, effective customer communications.
HVAs can be significantly impacted by the right organizational structures. Banks often have many different departments touching the customer experience, which can lead to a disjointed user journey, harming engagement and retention. We’ve noticed that when brands remember that it’s a single journey and prioritize reducing silos around team structures, technologies, and data, they tend to see stronger results.
Tell me a little more about the three levers of growth – acquisition, retention and monetization. Aside from High Value Actions, what else can banks do to optimize in these areas?
Using a new personal finance app can be an alienating experience. Often you’re dealing with tons of permissions and passwords, and then finding yourself dumped into an unfamiliar dashboard that can take days or weeks to see any value from. These cumbersome onboarding experiences are unfortunately the norm in banking due to regulatory requirements, so if you can reduce the number of fields that customers have to fill out and then use messaging to educate them on how to make the most of the app upfront, you can do a lot to improve the user experience.
Once a customer is through onboarding, take that first month to understand the customer’s goals and be careful not to bombard them with messages before you know what they’re looking to accomplish—that’s a surefire way to annoy new users. If you hold off non-essential messaging until you genuinely know who you’re speaking to and why they’re using your service, you’ll have a much greater chance of communicating effectively and retaining the customer going forward.
There are so many different reasons someone might choose to use a financial services app—paying a friend, tracking their spending, setting up automated payments, etc.—and that presents brands in the space with opportunities and challenges alike. If you want to retain and build relationships with your customers over the long haul, you need to identify not only who they are and what they’re looking to do with your brand, but also why they’re trying to do it and how often they’re interested in hearing from you.
This kind of insight requires the right technology and a thoughtful data strategy, as well as a willingness to challenge assumptions and conventional wisdom and can be particularly hard when you’re operating in the kinds of highly regulated, heavily siloed organizations that are common among banks and financial brands. Prioritize data agility and technologies that can easily integrate with other solutions to help to minimize these friction points and make it easy to provide customers with the kind of exceptional experiences that make them want to stick around.
Monetization is a burning topic for a lot of FinTech brands these days—but it’s important to remember that monetization is only in reach for your brand if you’ve build a history of trust with your clients. It has to start with you knowing your customer, understanding their goals, and being there for them, so that when the opportunity for an upsell presents itself, you’re in a position to effectively make your case. That said, once you’ve established trust, there are a lot of things that can be done to encourage your customers to adopt products that will increase their lifetime value. For instance, if you’re looking to get a user to activate and use their debit card, you’d likely want to:
- Make it personal: Use transaction history to surface the right incentives. If a user spends a lot of money on travel, you might consider highlighting a debit or credit card’s travel benefits in your outreach.
- Segment your users: Each user is different and has different motivations when it comes to personal finance management. It’s imperative to message different segments of users based on their engagement frequency and product adoption (casual, core, and power).
- Test the core value proposition: Test whether different value props will yield better results. “Let’s make this your rainy day card” is one way to get them through the door, without having a customer feel like they’ve overly committed.
- Learn from your best customers: Identify customers who have activated the debit card and use it regularly. Once you have identified this group of people and understand their habits, use messaging to encourage your other customers to be more like them, driving stronger customer health overall.
Keep in mind, the job doesn’t end when a customer signs up for a debit card—companies must drive usage. Here are some strategies to ensure customers are engaging with the card:
- Incentivize with Rewards: Maximize usage by making your solution more valuable the more often customers use it (e.g. funding your bank account gives you access to more personalized insights)
- Special features: Encourage users to round-up savings to drive higher card usage and generate interchange revenue
- Prime for Alerts: Transaction alerts can drive card usage and generate interchange revenue
- Refer a Friend: Increase referral reward for users who are more engaged with your cards
What are the other major challenges that are defining the financial services industry?
Personally, I’m very interested to see the long-term impact of the rise of FinTech brands. As a result of the 2008 financial crisis, we saw consumers begin to lose trust in large-scale traditional banks that do a bit of everything—and that, in turn, has led to an unbundling of many of these services. Suddenly there are specialist alternatives providing great customer experiences and innovative solutions focused on their core value prop. This differentiation has helped FinTechs acquire new customers, but the jury’s still out on how effectively they’ll be able to monetize.
By the same token, it isn’t like the big banks are on the verge of going out of business. They’ve mostly adopted a fast-follower approach, learning from what does and doesn’t work for FinTech brands and then pouring money into developing their own solutions based on strategies that have proved successful. It’s not clear yet if it’s more sustainable to be an innovator or a fast-follower, but it is undeniable that an effective monetization strategy built on a foundation of trust will be a crucial component for any future industry leaders.
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