When it comes to turning retail customers into clients of wealth management and investment services, banks have to focus on “solutions for real people” that range from highly targeted mobile services to robo advisers.
That was the message from Daniel Darst, the chief marketing officer of wealth and investment management for People’s United Bank in Bridgeport, Conn., who spoke at SourceMedia’s In|Vest conference in New York this week.
“Understanding who it is using your technology is challenging,” he said. “What kind of solutions do real people want? The challenge for me is how do we make a product relevant and identify something as a solution that people really need.”
Banks have the inherent advantage of a large, built-in customer base, Darst said, but over the past few decades these same customers have gone to advisory firms, or more recently fintechs, for investment and wealth services.
“The idea that the bank is your first choice for investment services has really been challenged aggressively over the past 30 years,” he said. “Banks have the perception of working on small accounts and being more of a ‘sleepyville’ environment.”
Darst joined the banking world when he came to the $44 billion-asset People’s United about 18 months ago, previously working in asset management for firms such as Neuberger Berman and Smith Barney. When he joined People’s, Darst said he realized “with our customer base, there are great opportunities for us.”
The first step Darst took was to analyze data to learn more about the bank’s customers, and then create different customer personas that could be used to market services. Darst said some financial institutions spend time creating “hundreds of customer segments” but most only need four broad ones to be effective.
“The point is to build customer segments that make sense, so you can reach them simple enough. So we started with our retail customer file. We have about 900,000 households,” he said.
Darst and his team then whittled down that number to about 250,000 that would be appropriate to offer investment products to. They also used aggregation tools to see what kinds of investment and money management relationships these customers had outside of People’s.
“So the challenge on us is to understand what their needs are and how we can meet them,” he said. “We have their core transaction data, so we should be able to see things like when they’re changing jobs, see how they fund life’s needs, the way they deal with emergencies and think about their kids and grandkids.”
Through data analysis and the creation of customer segments, People’s realized its ideal wealth and investment customer is “a 40-year-old, professional Gen X woman,” Darst said.
“And where is this person typically?” he asked. “She is on her phone, so if you’re not on her phone, you’re not where she is.”
People’s then used this information to tailor products to this customer. The main outcome was the development of a robo adviser that the bank plans to debut shortly.
“I’m not saying this is totally unique, but it’s something we have for this customer that we can offer that will interest them,” he said.
People’s is also going to target these customers with offers for certificates of deposit and money market accounts, because those are products “they might test out, and dabble their toes in the water with us,” Darst said. “They probably won’t immediately move all their [investment accounts] with us, but maybe they’ll do a $5,000 dabble here; CDs and [money market accounts] are a big way how people test a bank.”
Ultimately, the hope is then that People’s can get more of these customers’ investment and wealth management business. But when it comes to designing digital products and services for banks to attract more investment clients, Darst said the answer is a simple one.
“The main thing is you want to have experiences that don’t suck,” he said.