Bridging the Digital Divide: The Role of Experiential Marketing in Retail Banking Digital Adoption.

INTRODUCTION

In a rapidly advancing world, bridging the digital divide is a critical priority, especially in South Africa, where access to technology and digital resources remains uneven. As the adoption of digital services becomes increasingly vital for financial inclusion, experiential marketing emerges as a powerful tool to bridge the gap. In this post, we explore the unique advantages of experiential marketing in driving digital adoption by empowering individuals and communities in South Africa.

Understanding South Africa's Digital Divide.

South Africa is a paradox. Despite one of the largest economies on the continent and a youthful population driving digital adoption, poverty, unemployment, and inequality remain rife.

While over 90% of us have a smartphone, and over 80% enjoy internet access, almost two thirds (59.9%) of South Africa’s adult population didn’t complete high school, and unemployment stands at an alarming 32.7%.

In short, we have access to technology, but lack the skills and resources to maximise its potential. This ‘digital divide’ has a significant impact on financial inclusion. No where is this more evident than in mass market segments – both the largest market segment and the most underserved. Its estimated that 75.2% of South Africa’s adult population earned below R69 974 per annum (R5 800 per month) between 2011 and 2022.

Taking a closer look at the retail banking sector in South Africa reveals both this divide and how service providers leverage experiential marketing tactics to bridge it – with varying degrees of success.

The Power of Experiential Marketing in Driving Digital Adoption.

Retail banking is increasingly competitive. Particularly in the mass market segment. We’re all familiar with the traditional ‘big 5’ (Nedbank, Standard Bank, First National Bank, ABSA and Capitec), but one doesn’t have to look too far to see disruption at work. Afterall, it was the ‘big 4’ before Capitec made waves with their grass roots approach to unlocking the sizable opportunity they recognised in the underserved mass market.

In response, we’ve seen the South African stalwarts of retail banking introduce their own low-cost transactional banking offerings to compete for this segment. We’ve also seen large scale digitisation of systems and services.

More recently, the sector faced fresh disruption from digital ‘neobanks’ like TymeBank and Bank Zero, and ecosystem players like Checkers Money Market.

Really interesting is that, when looking at the winners in terms of mass market adoption, it’s not the best digital functionality, or even the lowest prices, who emerge on top. Rather, it’s those providers who leverage a physical presence in close proximity to target consumers. This, coupled with experiential marketing, bridges the digital divide to adoption by:

Creating tangible, hands-on experiences to demystify digital banking processes.
Overcoming fear and building confidence through interactive learning opportunities.
Breaking down language and literacy barriers through visual and experiential communication.

Showcasing Success Stories: Experiential Marketing's Impact on Digital Adoption:

Case Study 01:

How Capitec outcompeted century-old incumbents to become SA's biggest digital bank.

Two decades of disruption started back in 2001 when Capitec recognised an opportunity in the underserved mass market. But it was only through its customer-centric approach that the bank was able to capitalise on that opportunity. Early on, this approach saw recognition of the need for a physical channel where underserved target consumers act and transact.

Instead of following the tried-and-tested model with branches in malls or urban central business districts, they quickly established a branch network in rural and informal markets by acquiring and converting microlenders. True to their customer-led approach, when they expanded into urban areas, their focus was on proximity to taxi ranks – recognising the time and financial constraints faced by target customers.

In 2008, they launched their internet banking offering. As at July 2022, Capitec reported 8.6 million digital banking customers (53% of their total customer base), making it South Africa’s largest digital bank. Capitec credits their continued customer-centric approach – “What we’ve seen is that you need to have a big branch network, a very strong digital approach, and very strong client engagement. Certain clients want to go to a branch and certain clients want to do everything digitally. You have to cater to both. To do this, we’ve extended our footprint digitally through our banking app and physically with more than 840 Capitec branches across South Africa”.

In short, you cannot hope to capture mass market share without acknowledging consumer behaviour. And consumers in this segment still transact in physical channels. Experiential marketing is an effective and agile way brands can show up in these channels to create awareness and engage with customers on a personal level.  

Case Study 02

How TymeBank leveraged retailer footprints for a Customer Acquisition Rate of 140,000 per month.

TymeBank is a digital-only low-cost ‘neobank’ launched in 2015 that quickly recognised the necessity for physical presence where target customers act and transact.

To maintain its digital-first operating model and meet this need for physical touchpoints, TymeBank partnered with retailers including TFG and Pick ‘n Pay and Boxer stores with footprints in target communities, and deployed 500 Brand Ambassadors in field.

Ironically, this strategy has resulted in the digital bank now boasting the biggest physical footprint of any competitor in the country:

The result? In November 2022, Tyme reported its customer acquisition rate increased to 140,000 net new customers per month and stated that more than 80% of its new accounts are opened at retail kiosks. Tyme stated that its retail partnerships were “exactly what it needed to succeed in convincing South Africans to join a digital bank given the challenges around low levels of digital literacy and high data costs in the country.”

It can be assumed that the deployment of in-field brand ambassadors has also been a contributing factor to the bank’s success – providing prospective customers with real points of contact for questions as they navigate digital banking and a new service provider.

Case Study 03

Capitalising on a Captive Audience: How Checkers secured over 2 million Transactional Banking Customers in 2 Years.

As if the neobanks weren’t enough, traditional banks are also contending with and competing against so-called ‘ecosystem players’ like Shoprite Checkers Money Market.

Shoprite launched their Xtra Savings loyalty program in October 2019 and 2 years later, had signed up 20 million customers. They then invited card holders to register for the ‘most affordable transactional bank account in South Africa’ and, in just 2 years, had signed up 2 million customers – making it the fastest growing service provider of those we analysed.

Extensively marketed both in-store and online, their success can again be attributed to a solid physical footprint of over 500 stores, and to a captive audience of loyalty card holders. Of course, there’s also the frictionless registration process, and a fit-for-purpose product that meets the needs of target customers.

The Future Outlook: Sustaining Digital Adoption through Experiential Marketing:

Just as the future of digital banking adoption is hybrid (physical and digital), so too is effective experiential marketing. Trade marketing management platforms like PromoForce by Tradeway are taking the guesswork out of experiential marketing, for data-led campaign optimisation, real-time reporting and market insights.

In a recent brand activation campaign for Standard Bank, Tradeway was able to leverage platform-enabled campaign insights to maximise efficacy:

Case Study: Driving Digital Adoption through Field Services and Activations

Standard Bank recognised the need to share Value Added Service innovations with consumers through direct engagement. They were faced with the challenge of how to do this at scale, and through informal and indirect channels for maximum exposure and efficacy.

Tradeway Promotions designed a campaign that would deliver real reach, where consumers act and transact – driving awareness, education and adoption in the field.

The campaign had to be agile, mobile and scalable. It had to include a mechanism to incentivise adoption. And, as with any financial services solution, brand ambassadors would have to be highly clued-up and credible.

Tradeway designed and deployed a national field service campaign of over 600 brand activations, and campaign mechanics centred around connection, education and adoption.

An army of highly mobile, responsive brand ambassadors were deployed at speed in communities at taxi ranks, car washes, door-to-door, and at peak times at SASSA offices, clinics, stokvals, churches and informal trading hubs.

In a little over 4 months, the campaign achieved an engagement rate of over 72% and a 33% conversion rate to Standard Bank’s digital value-added services.

Beyond the numbers, the campaign also delivered invaluable insights into consumer behaviour, demographics and preferences that could be used to inform integrated marketing campaigns.

This is just one example of how emerging technologies and trends are shaping experiential marketing for digital banking, and points to the importance of building ecosystems of support through partnerships and collaboration with leading brand activation agencies.

Conclusion:

Experiential marketing serves as a catalyst for digital adoption by breaking down barriers and empowering individuals and communities in South Africa. By providing immersive and personalised experiences, financial institutions can bridge the digital divide, foster financial inclusion, and unlock the potential of underserved populations. Embracing the power of experiential marketing is not only a strategic choice but also a moral imperative to ensure that all individuals have equal opportunities to participate in the digital economy and reap its benefits.

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