Banking and financial services have always been an extremely competitive industry. Today, institutions and providers continue to face a mix of challenges.
Regulation, reputation issues, fickle consumer loyalty, and ever-changing preferences are just a small sample of the hurdles for the financial industry. There’s also the emergence of non-traditional competitors like Alipay, WeChat, and Amazon Cash, among many others.
It’s not enough for banks to have a great mix of products and services for its customers. They must also be able to collect data and achieve a deeper understanding of whom they’re competing against. This is why competitive analysis in the banking industry has become more critical than ever.
By conducting competitive analysis, your bank can understand:
- What you are doing better than the competition (so you can promote these things)
- What the competition is doing better than you (so you can foster improvements)
- What strategies are working for the competition (so you can discover trends and apply best practices)
- What mistakes your competition is making (so you can take advantage and differentiate yourself)
Let’s dive into a few important things to consider for successful banking industry competitive analysis.
Competitive Analysis in the Banking Industry
Define your goals and objectives
Competitive analysis in the banking industry starts with identifying what goals and objectives you’d like to achieve.
Are you looking to improve your online brand presence versus your competition? Or is your goal to generate more leads and traffic? Are you trying to outperform your competitors in terms of the kind of user or customer experience you’re delivering? Or do you simply want to generate more social followers, likes, hearts, and shares?
By defining your goals and objectives, you can focus your competitive analysis efforts and be more mindful of the data you are going to collect, analyze, and act on.
Know your market
When it comes to analyzing the competition, one of the most important keys to success is defining and understanding the market.
This can be a geographic market, as determined by specific ZIP codes and block groups. You may also choose to define the market by population demographics: average age, income brackets, educational attainment. Once you collect this data, list down which banks and institutions in your identified market provide competing services.
It’s useful to categorize the types of competitors you have: for example, primary, secondary, and tertiary competition. This is to separate those whose services compete directly with yours, versus banks and institutions that don’t currently compete but could easily pivot.
You can leverage additional information such as financial reports and company profiles, available from sources such as Dun & Bradstreet and Hoovers Stock market data, as well as market research reports and newspaper archives. This should help you achieve a bigger picture view of the market and identify unique opportunities for your bank in that area.
Measure your reputation
Reputation management in banking helps organizations shape public perception of their products, services, and brand in ways that foster public and consumer trust.
To measure your reputation, take a look at user-generated data like online reviews, social media comments, and customer feedback. Check out how your competitors are using social media and integrating it into their marketing. (You can tell a lot about a competitor’s marketing strategy by looking at their social media profiles and review website pages.)
Also, be sure to monitor digital channels where people are talking about your brand and your competition. Whether it’s in the form of a Yelp review, an aggregate star rating on Credit Karma or Lending Tree, or a candid comment on Facebook or Google, these types of customer feedback impact your overall reputation and can determine whether the consumers choose you or your rivals. Just as importantly, they can tell you what customers love or don’t love about your business versus your competitors.
Talk to your customers
An effective way to find out more about how your business is doing versus the competition is to talk directly to your customers. Particularly, surveying them is a great way to learn where your business stands in comparison to your rivals.
According to SurveyMonkey, businesses that conduct customer feedback surveys are 33 percent more likely to describe themselves as successful than those who don’t. Why? Because those that talk to customers are usually the ones equipped with actionable data and insights essential to improving their products and services. Surveying can also help banks evaluate loyalty and satisfaction, while also identifying and managing any any high-impact issues and weaknesses.
Read these tactics to creating an effective customer feedback survey.
Compare competitor content
What are your competitors doing right? And what are they doing wrong? One helpful way to answer these types of questions is by analyzing and comparing competitor content.
Content types include:
- Blog posts
- Visual media like photos and videos
- Press releases and news stories
- Social media posts
- Case studies and testimonials
- Webinars, podcasts, and slide presentations
As a banking industry competitive analysis technique, analyzing competitor content can help you determine where you need to put in more resources, and what kinds of opportunities you can take in order to outperform your competitors.
Keep an eye on the future
There is so much disruption going on in the world of banking and financial services. As mentioned earlier, the emergence of Alipay, WeChat, and Amazon Cash, among other similar kinds of services, has introduced non-traditional competitors that the banking industry hasn’t had to face before.
When conducting banking industry competitive analysis, think of new competitors that might enter the market. Stay on top of industry trends. Ask questions like, “How can someone new come in and take business away from me?” or “What can others do to tweak their offerings and take away my competitive advantage?”
By conducting banking industry competitive analysis and monitoring your competition on an ongoing basis, you’ll get to understand your competitors’ behavior, enabling you to anticipate their actions and stay one step ahead.