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Why Traditional Banks Need To Perform Digital Benchmarking

Paulius Stankevicius
Why Traditional Banks Need To Perform Digital Benchmarking

We have been stuck with the term “benchmarking” for a while when doing our SWOT analysis or merely analyzing our competitors. Very often we associate benchmarking with an offline business. Digital benchmarking, on the other hand, is determining the online performance of the company regarding online marketing, online sales, online orders, online branding, etc. Consider that today a large part of business performance depends on online activities. We need to minimize offline work because these days it's all about driving online sales and getting clients online. So, when thinking of your competitors or industry leaders we shouldn’t focus on the fundamental business questions. Instead let’s focus on the internet side. Let’s analyze how Salesforce is getting their clients through digital marketing, how Morgan Stanley is using social media to build up online community, how Goldman Sachs has started online podcasts to attract more attention online, how Alibaba and Amazon are winning in e-commerce. Startups, SMEs, and even large enterprises should focus on these types of questions to stay in the market and find their competitive edge. Digital benchmarking gets the answers related to online performance. This analysis opens up the very hard to answer questions such as how did a basic app company got viral and what are the key factors? When launching the next Uber or the next Airbnb, you have to analyze industry leaders from A to Z. You have to take the whole journey of how they get their clients online, what process does the client have to go through online, how does the payment work online, etc. After going through all of the findings, you will then have to think where you can add your unique value proposition to your competitive advantage. Consider that unicorn app-based companies don’t do any offline marketing. Around 95% of their whole success is based on online customer acquisitions and online marketing. You have to figure it out how they do it, and that’s where digital benchmarking comes in handy. To make it easier here’s a formula on how to get your digital benchmarking right: We all know that financial companies like J.P. Morgan and Merrill Lynch are well known and well branded but when it comes to online branding how much do we see of those financial institutions performing well offline? Our grandparents and our parents know the big banks, but there are a lot of millennials who have never heard of these banks at all. Appealing to Gen Z  The world’s most successful banks started hundreds of years ago, and they have since built their business through word of mouth and traditional marketing. However, most of Gen Z haven’t heard or seen any of the traditional enterprises which were founded in the late 70s, 80s, and 90s. They are, although, familiar with the newer crop of financial institutions. The banking industry is constantly disrupted by new financial institutions that are formed through revolutionary mobile banking applications. The number of digital banks launching every year is on a rise constantly. Most of the visibility they have is dependent on their online profile. The difference between the traditional banks and newly formed banks is that freshly built banks are digital natives and traditional banks have to adapt to technology development and online branding experience. The result is that conventional banks have to spend money and efforts to be able to acquire the new generation Z whereas newly formed, modern banks don’t have to pay a penny to get instant popularity. Traditional banks are not pushing their marketing efforts online as much as they should to gain the digital visibility. It is very likely that due to this lack of digital marketing, traditional banks may lose the brand to newly formed banks which are built from the very beginning based on online performance. For many years from now traditional banks will most likely still have the power and the market share, but due to fast changes in the current market, it may take only ten years for newly formed mobile banks to overcome the traditional banks. When building your company, think digital first and make sure your business can be scalable online, either it’s B2C or B2B, global online scalability is must for the pure survival.

Paulius Stankevicius is a CEO and Founder of Stankevicius MGM, PR and Advertising firm. Paulius Stankevicius has helped clients to raise over $500M in funding through professional PR and advertising strategies.

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