5 reasons why financial media networks could create significant customer touchpoints for banks

Banks are sitting on a treasure trove of customer behavior and purchase data. Most haven’t been using it to offer more personalized, timely messaging – but that may be changing.

Financial media networks (FMNs) provide banks a way to improve customer engagement and deliver sponsored messaging and advertising through their digital properties and customer touchpoints – all using high-quality, first-party data for personalized targeting.

At a time when retail banks’ profit margins are at an all-time low, this new revenue stream could position banks as key players in the evolving retail media landscape.

So why are banks ideally suited to benefit from building an FMN? Here are five reasons:

Large, engaged audiences. According to J.D. Power and Associates, retail bank customers interact with their bank an average of every three days across digital, phone and in-branch channels. That’s 10 opportunities a month for banks to maximize the value of this data with data-driven targeting of content, offers and advertising.

Consumer trust. Retail banks have strong credibility with consumers, and that trust can extend to endemic advertisers and high-quality content providers. Partners from industries such as auto, insurance and real estate value the opportunity to reach consumers in trustworthy digital and physical environments. And unlike some tech platforms playing catch-up with online consumer privacy laws, banks already operate under strict regulatory scrutiny and data governance frameworks.

Cross-selling. A bank can use its app, website, ATMs and in-branch digital signage to promote its other products and services (e.g., credit cards, auto loans and investment products). Intelligent engagement through next best offer marketing techniques and targeted, personalized advertising to existing customers can increase cross-selling and upselling success.

Omnichannel networks. Unlike some retail media networks with only an online and app presence, retail banks typically have web, mobile and physical locations (retail branches, ATMs) for customer interactions. They also use their data to send personalized marketing through direct mail, email, text and push notifications. That’s more channels for messaging and data collection.

Paper trail. With the increase in digital and electronic payments, customers’ digital paper trails are widening. According to the Federal Reserve, U.S. consumers made an average of 46 monthly payments in 2023, more than 60% of them with credit or debit cards. Banks can use those payment records to collect first-party data across retailers, developing a better understanding of consumer behavior, trends and shopping habits than a single retail media network can.

Have your cake and eat it, too?

While retail media networks may be in their infancy, banks have worked with a similar model for many years. Merchant-funded programs like Bank of America Deals and AMEX Offers already allow brands, retailers and businesses to distribute consumer offers through bank-owned digital platforms.

Merchant-funded programs offer banks increased card usage and customer engagement with minimal risk. A retail media network, on the other hand, can enable a bank with a large, engaged digital audience to generate high-margin ad revenue. They aren’t mutually exclusive: JPMorgan Chase uses both models to maximize revenue in its Chase Media Solutions channel.

And Chase isn’t alone. PayPal is fast-tracking its PayPal Ads platform, while Revolut, RBC and others are building media capabilities into their consumer ecosystems.

Banks that can quickly operationalize their own FMNs will not only unlock a high-margin revenue stream; they’ll also secure a competitive edge in a rapidly growing (and increasingly crowded) market.

Disruption: Why banks must compete

Big Tech and fintech disruptors have been tapping the same revenue streams as traditional financial institutions for over a decade. FMNs offer banks an opportunity to flip the script. By monetizing the digital touchpoints they already own, they can generate new revenue while protecting the customer relationships they’ve spent decades building. In fact, doing so may be a necessity–and one for which the window to act is narrow.

Already a regulatory reality in the U.K. and EU, open banking could see the light of day in the U.S. in the next year-plus, although the regulatory progress as of publishing time wasn’t yet clear. It’s designed to increase competition and give consumers control over their financial data. That could open the gates for fintechs and other third-party providers to build personalized financial services and capture customers and data from traditional banks.

In a recent consumer survey by Chase, 86% said they’d prefer to manage all their banking needs in a single app. FMNs can keep banks at the center of the customer relationship by delivering value-added services and hyper-relevant offers within their existing platforms.

The time to act is now

Banks are sitting on decades of trusted customer relationships and vast amounts of transaction data. FMNs allow them to convert those assets into a sustainable revenue stream, enhance the customer experience and counter emerging competitive threats. Just as Amazon seized the retail media opportunity early, banks that move first into FMNs can set the standard, shape advertiser expectations, and lock in top brand relationships before competitors catch up.

For banks willing to lead, financial media is no longer just a revenue opportunity; it could prove foundational to long-term success.

Adam Neiberg is Global Banking Senior Marketing Manager and Roy Reeves is formerly Principal, Business Development Specialist with SAS.