What is the Australian Market for Financial Services?
The Australian financial services sector has continued to experience significant growth, up by 13.2% to almost $10.9 trillion in 2020/21 according to a Roy Morgan Banking and Finance report. Financial services can be divided into four segments, which have all increased over the past year:
- Owner-occupied homes: 35.2%
- Wealth Management: 28.2%
- Traditional Banking: 23.8%
- Direct Investments: 12.8%
The total market for financial services in Australia increased by a record $1.27 trillion or 13.2% in the financial year of 2020/21, reaching nearly $10.9 trillion in June 2021.
Traditional banking experienced the largest increase since last year of $500 billion, buoyed by government stimulus packages, reduced spending with lockdowns and travel restrictions, and border closures.
With such a large market to tap, financial institutions need to be strategic in their marketing approach. It’s not just about spending money on advertising or digital marketing, but rather identifying the right audience and tailoring your services to meaningfully engage with them. Of course, this is easier said than done within a complex regulatory environment.
Regulatory Obligations of Financial Services Companies
The ASIC regulatory guide for financial products and services is an important tool for financial businesses to understand.
Advertising to customers
Financial companies have regulatory concerns and competitive pressure, which influences how they advertise to customers. For example, any financial or credit product ad or promotion should have a balanced message about features, benefits, returns and risks. Similarly, using past performance as a benefit should always be accompanied by a warning that it may not be indicative of future performance.
Internet communication
Financial service providers should consider how their Internet communication and advertising will be perceived. They should also consider issues like content limitations on certain digital media channels where there may not be enough space to provide adequate and balanced details. An ad should also be clear enough that it is easily distinguishable from regular editorial or program content.
There have been improvements in engaging with regulators in the financial services sector through ASIC’s innovation hub for providing communication and guidance to financial firms.
Challenges Faced by Financial Services Companies
Financial service companies deal with some specific challenges:
- Understanding your target audience based on financial services offered and analysing customer data.
- Using specialised marketing techniques to attract new and retain existing customers.
- Standing out from the competition as the financial services company of choice in a highly saturated market.
- Assessing data and conversions based on marketing strategies to determine campaign effectiveness and return on investment.
- Meeting complex financial industry regulatory obligations specific to financial services businesses.
Top Strategies for Financial Services Businesses in Australia
We’ve outlined some key financial services marketing strategies that can get results by increasing the quality of your leads, helping you attract new customers and retaining existing customers.
1. Understand your financial services target audience
Before devising effective digital marketing strategies for your financial services business, it is important to understand your target audience.
Marketing messages in any form of communication should ideally be tailored to the problems your target market faces with appropriate solutions. For example, in the owner-occupied segment, financial service providers can focus on areas like refinancing home loans for existing customers and attracting new customers with competitive low-interest rates. In the wealth management segment, a financial advisor or business can demonstrate their points of difference by providing quality financial advice and leveraging testimonials or case studies from past investors.
Building your buyer persona
Building your buyer persona is so important for financial services marketers. This helps you understand your customer’s challenges, needs and buying behaviour. A buyer persona ultimately represents your ideal customer based on crucial marketing data and research. Some of the benefits of building buyer personas for financial institutions include:
- Easier to personalise your marketing efforts to your ideal customer.
- Helps you identify financial products and services best suited to your customer needs.
- Drives all your content creation, sales processes, customer acquisition and retention tactics.
- Determines the most ideal digital marketing channels to reach your customers.
- Attracts high-value visitors to your business, which can turn into leads and eventually customers.
How to build a buyer persona for the financial services industry?
The process to build effective buyer personas to reach your ideal customer involves delving into their challenges, needs, background and mindset.
The best buyer personas are based on market research and customer insights. A good way to do this is to reach out to your current customer base through surveys and focus groups. The number of buyer personas can range anywhere from 4 to 20 depending on the financial products and services on offer and different demographic groups.
Key steps to develop a buyer persona
- Once the data has been collated, outline demographic information such as age range, income, location and gender.
- Next, consider their concerns and challenges. What keeps them up at night? How does your service address their concerns and help them?
- Help your sales teams have the right conversations with prospects based on profiles. Provide real quotes from customer interviews and research of who they are, what they want, their concerns and address any objections so the sales team are better prepared.
- Create messages suited to the personas created. This is important as all stakeholders can use consistent brand messaging for their products and services.
- Speak with less happy customers and understand their complaints. If you know their challenges with your service, you can improve it to prevent customers from switching to other financial providers.
Customers like to be heard and feel valued when given an opportunity to voice their opinion, suggestions and concerns.
Don’t forget your prospective customers!
Prospective customers play an equally important role in your ability to market to the right people. But they may be a little trickier to research. If you intend to target them to create a highly effective marketing strategy, a good incentive can do the job. It is always worth gathering information from a broader market, so you know how to reach different types of prospects and potentially convert them into customers in the future.
2. Research and use financial services marketing trends to your advantage
Researching and adopting industry trends early can help you carve an advantageous position for your business in a highly competitive environment. We have seen a lot of changing trends in the financial services landscape in Australia. But the biggest trend we are seeing is in the area of digitisation in almost all aspects of the business. While many companies were already making the shift towards digitisation of products such as debt recovery and payments, it’s clear the pandemic hugely accelerated the process – turning years into months.
There has also been a lot of support in the financial industry to use a Digital ID framework, similar to other markets like Asia and Europe. Almost 3 in 5 fintech companies believe there will be significant cost savings of $124,700 on average per annum by using a Digital ID according to the EY FinTech Australian Census 2020.
These savings can then be re-invested into digital marketing for financial services to grow your business. Today, digital marketing channels are preferred over traditional advertising and cold calling because they are far easier to measure. So, companies are clearly aware of their return on investment.
Another big trend to catch our eye was the housing boom in major cities. Home loan companies, financial planning businesses and finance brokers that were able to effectively utilise online channels and deliver a great user experience were able to capitalise on growing demand and did extremely well.
The Australian Government also recently introduced the regulatory sandbox, allowing businesses to test innovations in financial services or credit activities without first needing an AFS licence. This was done with the aim to facilitate financial innovation in the country. We find this another great opportunity for fintech businesses to enter the market and promote competition. This in turn will help Australians benefit from more cost-effective choices.
For financial services businesses, the benefits of adopting a digital marketing strategy are enormous. It is no longer an option; it’s imperative to increase your ROI and gain new business.
3. Stand out from your competition with the right digital marketing tools
Marketers need to have an effective financial services marketing strategy that includes a quality company website, direct traffic to it based on keyword searches and convert leads from the site.
Consider omnichannel marketing
Omnichannel marketing enables financial service marketers to engage with customers on various channels and through different touchpoints. It enables companies to connect with their target audience and provide a consistent user experience across devices, websites, social media and apps. You seamlessly integrate all systems for the best customer experience. Marketing automation software can help you better track all your touchpoints including online and offline channels, so you can deploy your marketing costs to the most effective areas.
Create a fast, responsive and SECURE website
In a saturated market with many competitors, your financial services business site needs to be fast and responsive. It is important to engage a new customer rather than lose them to a competitor site. 55% of website visitors generally spend less than 15 seconds on your site so you need to make a positive first impression. Mobile-friendly websites and apps ensure customers are reached on a medium they use daily.
Your financial services marketing should also demonstrate website security to build trust with your audience. A high level of protection is crucial, especially if your website is used to store sensitive customer details and payment information.
Be found on Search Engines
Your website needs to do more than just have a good design and user experience. It also needs to be properly optimised for the local market with keyword-rich content that enables a higher ranking on important search engines like Google.
Search engines respond to algorithms and customer keyword searches either organically through quality content or through highly effective Pay Per Click (PPC) campaigns. This becomes important because 75% of users do not click beyond the first page when they search on Google. Search engine Optimisation (SEO) and PPC advertising can help you rank highly, ideally in the top searches on the first page. So you can be visible to the majority of prospects searching for a financial service related to your business.
SEO can be time-consuming but if your keywords rank well, you will reap the benefits of quality leads and sales. An SEO Agency can help your website rank highly with Google in the top 3 searches, which draws more traffic and more quality leads. PPC is another important and cost-effective approach, as it can micro-target consumers and maximise traffic and leads to your site. The two strategies are often used together, as part of your overall marketing efforts.
Reach online buyers
Australia is one of the leading countries in internet usage per capita despite a relatively small population of only 25.64 million. 22.82 million or 89% are internet users in Australia in January 2021. These statistics reflect how crucial it is to have a strong website and digital presence as part of marketing for financial services. Customers today are purchasing more financial services online. Even if they choose to take complex products like investments and mortgages offline, they are most likely to research the products online.
Use social media effectively
Appealing to younger generations that are tech-savvy and glued to social media can be challenging for the financial services industry. Social media usage in Australia is just as high as for internet users. There were 20.50 million or 79.9% of the total population of Australia using social media in January 2021. Australians are using a variety of social media platforms that can form part of your financial services marketing strategy.
- Facebook holds the majority 89% of users compared to other social media channels. Almost 60% of Facebook users in Australia are in the age range 24-55.
- 57% of customers follow a brand on social media to learn more about their services.
- 47% of customers follow company news on social media.
- 40% of customers are interested in promotions and discounts.
Social media has presented significant opportunities to connect with customers. Customers are interacting with financial service brands by engaging with their content, posting reviews and likes, shares and follows.
Customer service is often an overlooked component of social media strategy but it is important as 44% of customers identify customer service as a leading indicator that distinguishes a brand from its competitors. But a sound social media strategy is important in financial services marketing, as it is heavily regulated and scrutinised.
Embrace mobile marketing
Mobile marketing is an important part of your marketing plan. Mobile usage is more than the Australian population, which indicates multiple phones are used per person. There were 32.47 million mobile connections in Australia in January 2021, equivalent to 126.6% of the total population.
4. Create valuable content for your audience
Marketing for financial services businesses must include valuable content that encourages your audience to engage with you. Content marketing is designed to build trust and loyalty, educate customers, influence buying decisions and establish you as the trusted authority.
Digital content can make it easy to explain complex products and services, fostering greater engagement. You can also use content to create more prospects that are ready for your sales team to close. But it isn’t just about having a pure sales focus. There is an opportunity to present your brand as a thought leader in the industry, which can also help you stand out.
Creating engaging content can sometimes take longer to build momentum but it is one of the most effective ways to build a long-term relationship with your customers.
What are the most effective types of digital content?
Video content and infographics are powerful ways to promote financial products and services. Over 88% of Internet users watch online videos in some form or the other.
Social media content is another good way to engage with your audience. When creating social media content, consider that 68% of customers like to image posts while 50% prefer video content.
For the financial sector, white papers, articles, blogs and e-books can also foster stronger engagement with customers and prospects. When marketing financial services through content, it is important to understand who you are talking to for each product and service you promote. Content with a primary motive to sell does not always engage customers. Content that is truly valuable will focus on topics around education and information. Some facts you may want to consider:
- 51% of customers will unfollow a brand if the content is irrelevant.
- 43% of customers will unfollow a brand if they see too many ads.
- 35% will unfollow if there are too many promotional posts.
5. Measure your financial services marketing campaigns
From a financial marketing perspective, the pressure is always your ROI. The good thing is that most digital marketing strategies are measurable. You can easily track visitors to your website or measure which paid ads are performing better than others.
Experienced marketers know that generating marketing data is easy, the difficult part is in turning the data into meaningful reporting to gain insights and determine the effectiveness of campaigns. Measurement tools and analytics are important tools because they help to recognise financial services marketing trends. Financial service providers can then adjust their marketing campaigns for greater effectiveness. Artificial intelligence analytics can also help with customer segmentation, allowing you to tailor your products, services and messaging based on buying behaviour.
Reports and insights on digital campaign success can go further than simply tracking customer clicks, traffic and keyword searches. The real value is measured as a return on your investment, which is reflected in the sales, leads generated, the conversion rate of prospects and sales revenue.
Put simply, there is no point in a digital marketing plan without any way to measure its success. There is a lot of evidence to suggest that financial companies are embracing emerging digital trends, but whether you are using the right strategy or not is crucial to ensure you reach the right audience. After all, if you’re selling a 30-year home loan product, you probably don’t want to be talking to a retiree who’s ready to move into an assisted living facility.
6. Build brand awareness and customer loyalty
Brand awareness and customer loyalty have always been at the forefront of marketing financial services. Based on past experiences with financial institutions, it’s easy to see why customers find it hard to trust many financial companies.
But ultimately, we believe that if you are able to build trust with your audience, your financial marketing tactics will be far more effective. If there is no emotional connection with the brand as well as customer satisfaction in the partnership, a customer will switch to a competitor. Creating an emotional connection to your customers can build loyalty by turning one-off sales into repeat transactions. For example, emotionally connected credit card customers spend 46% more annually than highly satisfied ones.
To do this, it’s so important to focus on the customer journey and how communication can be used to build positive associations with your brand. This could be an array of strategies including a good user experience on the website, excellent sales and after-sales service, quality products and services, relevant financial advice and so much more. You can use these points of difference to develop a unique value proposition and position your company ahead of your competition.
Financial marketers that utilise information gained from data analytics and customer segmentation with a niche financial services strategy will strengthen their marketing strategy.
Financial institutions have always had a reputation of being cold and impersonal. A personalised approach will be your key to reaching out to prospects and converting them into customers. Tailoring messages to create a connection with your customers can encourage them to stay loyal. You can only do this once you understand customer behaviour, buying patterns, relevant digital channels and clear messaging.
7. Partner with an expert who understands financial marketing
A financial services marketing agency that understands the nuances of the financial industry can make a huge difference to your efforts. Without the right partner, it may not be as easy to understand and conceptualise a campaign tailored to your audience.
Working with digital marketing experts can help you reach your target audience and boost revenue more effectively. An agency with experience in financial services can help you with an overarching strategy that encompasses websites, SEO, social media marketing, relationship marketing, paid advertising, local SEO and so much more to help you maximise results and build your financial brand.
This takes the stress away from you, as you look after your core day-to-day tasks. A good agency will monitor, track and update you on campaign progress at different stages, so you are aware of the strategies delivering the best results.
Most importantly, an agency that understands the financial industry well will take extreme care to ensure that your messages, promotions and advertising are compliant with ASIC guidelines to protect your business from any fines.
Paramark Understands the Complexity of Financial Services Marketing
At Paramark, we design award-winning websites and conceptualise marketing strategies for all types of financial services companies. One thing we take seriously is getting to know you and your business so we can tailor a strategy that fits your goals and objectives. We know that online marketing for financial services differs from other sectors, such as online marketing for industrial companies. For this reason, we tailor every service to your needs. We also understand your legal obligations and take a cautious approach to ensure all our content, designs and messages are compliant.
The financial services industry has slowly but surely adapted to the changing trends of today’s technology-driven society. With our support, we can take care of all your financial services marketing campaigns from start to finish, so that you get on with running your business.
We’re a small team but we believe this is what makes us more effective. It’s not about meeting sales targets within our business. It’s about helping clients, like you, reach out to your target audience with the right digital marketing tactics that can take your business to the next level. We’re firm believers in long-term relationships and will work with you in any capacity you need to help your financial business navigate the complexities of the digital world. And from there, we hope you will refer us to your other business friends and acquaintances.
