How banks and payment providers can safely tap first-party data

Michael Dunlop is vice president of sales and go-to-market strategy for financial services at Rokt, a global leader in e-commerce technology and software solutions. He leads client relationships with brands including Citi, Bank of America, PayPal, Afterpay and Klarna.

In an era where digital privacy concerns are at the forefront, traditional marketing strategies that rely on third-party cookies are falling behind. This shift has major implications for companies accustomed to running their businesses on data acquired through partner channels. Even though Google recently pushed back its plan to sunset third-party cookies, this serves as a timely reminder that companies must prepare for a cookie-less future. 

For banks and financial institutions, first-party data is a valuable source of intelligence. Leaders are partnering with new platforms to make use of data for their customer acquisition strategies, discover how they can use data to deliver relevant messages, and boost engagement with their credit products. In this highly regulated industry, privacy and consumer trust are critical. 

Embracing privacy-centric strategies and regulatory compliance

Banks understand the sensitivity around consumer data and are committed to safeguarding privacy while driving business growth. Privacy-safe approaches empower financial institutions to prioritize transparency while promoting a customer-centric experience. By using first-party data, such as spending patterns and demographic insights, banks can tailor their offerings while complying with federal fair lending laws and protecting individual privacy. 

Fair lending laws, including the Equal Credit Opportunity Act and the Fair Housing Act, lay out guardrails that mitigate the risk of discriminatory practices in banking and uphold the principles of responsible lending. By adhering to ethical data practices and ensuring fairness and transparency in their operations, banks that leverage first-party data responsibly not only protect consumer interests but strengthen their reputation.

What do privacy-safe strategies look like? Banks have millions of customers who have checking accounts, many of whom don't have a credit card with that institution. Leading banks are working with next-generation data platforms to help them create contextually relevant offers that meaningfully speak to the consumer in the transaction moment.  For example, deploying a credit card offer on an online retailer’s checkout page or confirmation page could be attractive to a consumer who already has a checking account with the issuer. Of course, uptake for such an offer will depend on how easy a bank makes the sign-up process, ideally through a streamlined onboarding page. 

Contextual relevance in credit card utilization

By analyzing first-party data, banks can identify strategic moments to encourage credit card usage, such as during purchasing behaviors or life events. This targeted approach not only enhances customer experience, but also increases the likelihood of card retention and usage, ultimately driving engagement and loyalty. For example, a consumer shopping for a new surround sound system might appreciate a reminder that their credit card offers cash-back rewards on electronics purchases.

Retargeting and acquiring new customers

First-party data is a goldmine for banks that want to retarget current customers and attract new ones. By tapping insights from consumer behavior and attributes, banks can craft personalized marketing campaigns that resonate with individual preferences and needs. Whether through tailored promotions, exclusive offers, or personalized recommendations, banks can use first-party data to effectively nurture leads, driving acquisition and fostering long-term relationships.

Maximizing customer lifetime value

For banks, the ultimate goal is to maximize customer lifetime value by deepening relationships and driving sustainable growth. Through targeted upselling and cross-selling initiatives, banks can capitalize on existing customer relationships to promote additional products and services in contextually relevant moments. 

First-party data gives banks valuable clues about customer intent. Instead of pursuing every customer who goes to live music concerts, for example, it’s better to target those consumers who demonstrate the ability to pay for premium concert experiences like VIP access, preferred or valet parking and similar perks. This approach saves costs because banks can target spending on customers who are likely to make a purchase.

In the evolving landscape of digital marketing, banks must adapt their strategies to align with evolving regulatory requirements. By harnessing the power of first-party data in a privacy-safe manner, banks can unlock new opportunities for customer acquisition, relevance and promote stronger engagement with their products. Through ethical data practices and targeted marketing efforts, banks can navigate a cookie-less world with confidence, driving sustainable growth while continuing to deliver value to customers.