Brand Innovators 2023 Outlook: Financial Services
Rising interest rates, high prices, a volatile stock market and a potential recession is creating an unstable economic environment. Financial services brands that can help ease consumer uncertainty will be better positioned to thrive in this environment.
Rising interest rates, high prices, a volatile stock market and a potential recession is creating an unstable economic environment.
Financial services brands that can help ease consumer uncertainty will be better positioned to thrive in this environment. As we look to 2023, expect financial services brands to be focused on delivering reliable experiences that offer stability.
“The category is going to be very tough for the foreseeable future,” says Josh Palau, SVP, growth marketing and media at Lending Tree. “If rates continue to go up, there's no doubt some people will pull back. It's going to be volatile over the next six to eight months to figure out where things settle and what consumers are comfortable doing. How that plays out depends on how you maintain your brand positioning. Building an actual brand that delivers an amazing experience that makes people want to continue to come back and refer to their friends is what will win out.”
Jill Cress, chief marketing officer of H&R Block suggests that in this environment, brands should be focused on providing value to consumers. “Think about just the headwinds of what's happening with inflation and people being concerned about what that means is something that we want to think about in the way of the value that we can provide,” says Cress.
She also expects the gig economy to grow next year and says H&R Block has resources to support these creators. “The gig economy will continue to be pervasive,” Cress adds. “People are choosing that lifestyle because it allows them to have flexibility. It allows them to maximize their time and earning on their own terms. Brands will need to think about what that means for how to reach consumers. How are they thinking about their relationship with money and spending in the retail environment? We will see compression in omnichannel and just really understanding the consumer journey is going to be incredibly important.”
Consumer payment habits will be impacted by the economic downturn, according to Lily Varon, analyst at Forrester. “As consumers begin to really feel the effect of the looming state of the economy, we will see a shift in payment habits, including the comeback of cash,” she writes. “As liquid money is exhausted, consumers will stampede to “buy now, pay later” options and back to credit cards.”
David Sandstrom, chief marketing officer at buy now, pay later firm Klarna says: "Consumers’ expectations and demands around how they shop and pay will continue to increase as we head into the new year. They want flexibility, convenience, and trust in the services they use. Whether they prefer to pay immediately, pay later, or pay over time, companies that enable them to buy with confidence, while saving them time and money along the way will be most valued. And those to truly stand out will offer consumers shopping utility beyond just payment features, such as allowing them to budget their finances, track deliveries, discover new brands, search, and get what they need all in one place."
Financial services brands have been focusing on appealing to younger audiences to maintain their customer base in recent years and expect this to continue in 2023.
“It's all about Gen Z. Millennials are going to move to the background as more companies and brands develop strategies to win with the younger Gen Z audience as they think about future growth,” says Tia Cummings, vice president of marketing at Square. “More focus on brand purpose. This is tied to my previous point around Gen Z as they very much care about brands with purpose. But, we also tend to see that during tough times (i.e. Covid), brands double down on purpose initiatives meant to support their consumers/customers. And as I expect us to be in a recession for 2023, brands who are showing up for their consumers/customers in meaningful ways will continue to win in market. Streaming will continue to grow as a media channel. This isn't new but a continuing trend that I expect will accelerate as companies like Netflix launch an ad-supported model for the first time.”