A Digital-First Bank Finds a Customer-Driven Path to Profitability

A digital-first bank was growing fast, adding cohorts of new applicants and users. But only a small fraction of accounts were profitable; most made only the occasional transaction. Customers who used the bank as their primary account, however, with frequent transactions and direct deposits, presented a promising segment. If NeoBankCo* could acquire, convert, and retain more primary customers, the bank believed it could accelerate its path to profitability. Achieving this goal would require a coordinated effort across the company’s product, design, marketing, and analytics groups.

We deployed a multidisciplinary team, including members of our Fintech and Banking practices, as well as experts in advanced analytics and user experience design. In just 13 weeks, NeobankCo fundamentally rethought its customer strategy, created a smoother digital experience for customers, and mobilized itself for sustainable revenue growth.

A shared and accurate view of digital market data

We began with a focus on data. NeobankCo lacked a clear, shared understanding of the market opportunity and the behavior of its customers. Teams were working at cross purposes because they took cues from different data sets. A key first step was to rally every part of the business around a single source of truth.

Drawing on the expertise of our global banking practice, we calculated the true size of NeobankCo’s addressable market—current, near-term, and long-term—and defined the unmet needs of various segments within that market. That enabled the company’s teams to align their programs around shared objectives.

Analytics-driven marketing programs

With a combination of attitudinal and behavioral data, we used advanced analytics to build a customer segmentation map from the ground up. NeobankCo could now build marketing campaigns around these segments, based on its more detailed understanding of the attributes that defined them. And for each segment, NeobankCo could now tailor its value proposition—product, messaging, incentives—to boost application flow, conversion, and engagement of customers who would use it as their primary bank.

Experts from our Innovation & Design practice worked closely with NeobankCo’s product teams to analyze the strengths and weaknesses of the user interface and the user experience (UX), comparing them against the bank’s competitors and standout fintech attackers. NPS Prism^®, our performance benchmarking service, gave NeobankCo granular insights on every step in the customer journey, ranking the bank’s UX against its competitors and highlighting what works.

Mobilizing for results

By the end of the project we had synthesized multiple data-rich insights into a concrete set of recommendations—including tactical “go dos” to move the dial on winning high-value customers—while reducing customer acquisition cost. Importantly, we aligned with the team on operating model implications, including the need for journey-based teams centered on the customer, and critical areas for cross-functional teamwork.

With these enablers in place, NeobankCo was able to rapidly pivot to focus on the customers most likely to be converted to primacy, and achieve profitable growth. In a resource-constrained world, this kind of prioritization is essential, ensuring the bank will realize superior value for every dollar spent acquiring and delighting customers.

*We take our clients' confidentiality seriously. While we've changed their names, the results are real.