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Improving relationships - Making the most of indirect banking consumers

By : Jason Weinick

March 08, 2018 08:00 AM

Competition for members among financial institutions has grown especially fierce within banking, prompting many to begin implementing more innovative ways to reach new and existing members, boost member loyalty, and ultimately increase wallet share for the FI. This, of course, is easier said than done, especially when dealing with minimally engaged, or indirect consumers.

 

The challenge with disengaged consumers
One increasingly common reason for the lack of engagement between consumers and financial institutions is they may not have a direct relationship with their main provider. This issue is quite common among credit unions, which often aim to increase their reach by partnering with other organizations in order to obtain new members.

 

For example, one strategy is to develop relationships with auto dealers to provide car loans to consumers. These buyers will often secure their financial product directly through the dealer and therefore not develop any real connection to the financial provider itself. They typically pay their bill every month through an online or mobile platform, essentially bypassing any opportunity to build an established relationship with said institution.

 

This practice places the financial institution in a position where hundreds - if not thousands – of indirect members never encounter the brand digitally or in person. In some cases, the financial institution may not even have a valid email address to contact the member directly, as it's likely the only communication indirect members receive is a quarterly statement.

 

This is clearly far from ideal for FIs, in that it poses a serious challenge for them to promote other products and maintain these members once their loan period has expired. This is especially true for those consumers who don't live near a branch, as this means the FI will have even fewer opportunities to engage them as an ongoing member.

 

The tools to reach indirect consumers
Indirect consumers don't necessarily have to be that difficult to reach. Marketing and communication tools, such as NCR's Digital Insight™ Promotion Suite Plus, can give financial institutions a powerful way to connect with indirect users via online and mobile channels.

 

Simply put, this solution gives financial institutions the power to deliver personalized messages directly to users through existing digital channels, including online portals and mobile banking apps. The content can be tailored to an individual's profile or preferences, and can even be timed to ensure users are getting messaging that's relevant to their specific needs and interests. With the right messaging and approach, this solution has been proven to reach, engage and convert indirect consumers toward products such as checking accounts.

 

Turning indirect consumers into new business
One financial institution to experience great returns on this solution is Indiana-based Evansville Teachers Federal Credit Union (ETFCU). Prior to implementation, the FI had been particularly challenged with reaching indirect consumers, to the extent that 58 percent of its member base were obtained through indirect channels. Additionally, more than 70 percent of these members weren't physically located near a branch, contributing to consistently low levels of engagement.

 

Digital Insight Promotion Suite Plus was instrumental in helping the institution reach these consumers and present targeted, real-time messaging that it otherwise couldn't. One prime example is how ETFCU used the solution to highlight offers such as monthly cash rewards and free ATM transactions for out-of-network machines.

 

This use of direct messaging proved to be particularly effective in engaging members and helping increase indirect to direct member conversions month over month. For details about ETFCU's successes using Promotion Suite Plus, you can find their story on our case studies site HERE.

 

For financial institutions looking to innovate how they're reaching existing members while also growing wallet share, digital marketing tools like Promotion Suite Plus can help deliver targeted right-place, real-time messaging, turning short-term consumers into what every institution wants – a long-term, sustainable relationship.

Author

Jason Weinick

Business Data Manager

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Jason Weinick is a Business Data Manager with NCR and leads the initiative on financial institution profitability analyses, providing banks and credit unions with valuable insights into the value of digital banking and other related NCR solutions. His background includes 20 years of experience within the financial services sector – having spent the last 11 years with NCR, focusing on consumer behavior, risk modeling, data analytics, reporting, and financial analysis. He holds a Bachelor of Science in Finance from Clemson University.