Competition for banking customer loyalty never lets up

A version of this article first appeared in the October BAI Executive Report: Anticipating banking’s 2025 marketing trends. Check out more of the issue for insight on data-driven budget asks, agency relationships, direct mail strategies and an AI boost for customer loyalty. 

Compared to the last five years, 2025 is shaping up to be a relatively stable, almost predictable, year for banks and credit unions. The Fed lowering rates will ease pressure on financial institutions and consumers alike. But for the marketing teams within those banks and credit unions, the pressure never lets up.  

That’s because competition and consumer expectations in the financial services world trend in only one direction. Marketers need to continually advance their strategies for generating new demand and earning deeper loyalty. They’re playing a zero-sum game to win customers for life—if they don’t deliver, their competitors will. 

With that in mind, here are a few key themes that will drive successful marketing in 2025: 

A life-centric approach to personalization at scale 

Personalization has topped every list of marketing trends going back at least 10 years, but financial institutions still struggle to crack the code on how to deliver content, communications, and product offers that feel tailored to their customers’ unique needs and goals—at scale.

We’ve seen banks and credit unions invest in collecting more and more data on their customers, using analytics to try to distill some “aha” insights based on demographic cohorts. The idea is that if you can group similar people together, you can do “lookalike” modeling to anticipate similar needs and goals. 

But more and more financial institutions are having a different “aha” insight: Select life milestones are better predictors of near-future intent than all the demographic data in the universe. Two consumers may look completely different on paper, from a demographic perspective, but if they both just got married, started a new career, welcomed a new family member, or retired, they’re likely to have similar financial needs in the near term. 

Marketers will rapidly adopt this life-centric approach to executing on the goal of personalization at scale. They’ll use all that data they’ve gathered to find signals that identify—or even anticipate—key life milestones. 

This represents a notable paradigm shift in data-driven targeting: The goal isn’t knowing more (and more and more) about consumers; it’s seeing the signals that matter, so you can reach out when it matters most. 

AI adoption will drive focus on core customer intelligence systems 

2025 will see AI hype build into large-scale AI adoption. More industry-specific AI applications are coming to market, giving financial marketers tools that don’t require data scientists or prompt engineers. 

Most use cases will revolve around improving customer experience. Next-generation AI-powered chatbots will provide more natural, human service experiences, and predictive insights will drive more helpful service and offers. 

But AI is only as smart as the data it has access to. So, accelerating AI adoption will also lead marketers to refocus on putting comprehensive, future-ready customer intelligence systems in place to build the foundation for AI, analytics, and advanced automation.  

The goal must be to connect data silos that commonly exist within financial institutions—to create more complete customer profiles that include every interaction and touchpoint, across departments. These systems should also be able to enrich customer profiles with relevant third-party data and synthesize robust customer intelligence—and be ready to integrate with new analytics and AI tools as they emerge. 

Closing the information gaps between engagement channels 

Banks and credit unions have been talking about omnichannel experiences since analyst reports and headlines declared “the death of the branch” a decade ago. Yet, many financial institutions are delivering more of a multi-channel experience—giving consumers the freedom to engage on the channel(s) they prefer and offering similar service experiences across them all.  

This manifests in one of the most common sources of consumer frustration: Contacting an organization through a different channel and having to repeat information they feel the financial institution should already know—or getting redundant or outdated offers and information across channels. 

True omnichannel engagement bridges the information gap between channels in real time, to deliver not just similar, but seamless experiences across channels.  

One big driver of the renewed focus on omnichannel is the new 10DLC registration requirement for SMS marketing messages, which went into effect in spring 2024. The 10DLC requirements re-establish SMS as a credible and valuable marketing channel for financial institutions. But marketers need to earn and keep that trust by harmonizing SMS campaigns with other communications. Dissonance or redundance in SMS communications will quickly make things feel spammy. 

Like the other trends, improving cross-channel engagement necessitates central and complete customer profiles, providing the data marketers need to build omnichannel campaigns. 

Delivering what consumers crave: financial guidance (not a hard sell) 

One clear consumer trend across all segments: People want to find trusted sources of guidance, so they feel empowered to make their own smart decisions.  

This represents a huge opportunity for financial institutions. Two in three adults (and 80% of Gen Z and Millennials) say they want to expand their financial literacy, according to a 2024 Experian study. Yet, just 1 in 5 bank customers said they’ve received financial education or guidance from their financial institution in the past year.  

Capturing this opportunity brings together all the other themes above. Marketers need to bring all their customer data into a central platform so they can take a life-centric approach to offer relevant messages—across all platforms—based on key life milestones and related financial needs. 

That’s the “how.” The “what” of those messages should be focused on providing genuinely helpful information on key financial concepts, products, etc., as well as tools that offer impartial guidance on how to make smart financial decisions.  

No time to coast—extend your advantage  

Fallinz rates are likely to stimulate demand for lending products, and bankers will still face fierce competition for deposits, so this is no time to sit back and relax. Marketers should take an aggressive approach in 2025 to capture their slice of demand, drive trust and loyalty, and ultimately win customers for life. 

Donnie Kenneth is Vice President, Marketing with Total Expert.