Accurately capturing life events. What is advertising and marketing business utilizing financial data?

The revised Banking Act came into effect in November 2021, permitting banks themselves to engage in marketing and advertising activities.

Payroll deposits, mortgage applications, asset management through investment trusts... Financial institutions provide services closely tied to customers' lives and hold vast amounts of data accumulated over long-term relationships. Couldn't effectively utilizing this financial data enable the delivery of highly accurate, valuable advertising tailored to each individual user's needs?

SMBC Digital Marketing Inc., established in July 2021, is tackling this new advertising and marketing business to turn this hypothesis into reality.

In this article, we spoke with Yoshitaka Takano, President and CEO of the company, and Takuya Okubo, an Integrated Marketing Producer at Dentsu Inc. who currently serves as Executive Vice President of the company, about their advertising and marketing business.

*As an advertising and marketing service provided by a financial institution, this business places the highest priority on customer safety and security. Therefore, it operates under strict management, including regular monitoring involving external experts such as lawyers, regarding the handling of personal information.
 

【SMBC Digital Marketing】
Established in July 2021 as a joint venture between the Sumitomo Mitsui Financial Group and the Dentsu Group. As a company advancing banking services through the use of financial big data for advertising and marketing, it became the first domestic megabank to obtain approval from the Financial Services Agency. It solicits advertising placements from advertisers seeking corporate branding or to promote products and services, delivering ads via the Sumitomo Mitsui Banking Corporation app, email, and other channels.

Enables ad delivery tailored to each customer's life events

──First, could you explain the background behind establishing SMBC Digital Marketing?

Takano: The environment surrounding the banking industry is undergoing significant change. The revised Banking Act, enacted in November 2021, permits banks and their subsidiaries to engage in businesses such as system development and sales, data analysis, research, and advertising.

The Sumitomo Mitsui Financial Group (hereinafter collectively referred to as the "SMBC Group") has outlined directions to realize its mid-to-long-term vision. One of these is information industrialization. The SMBC Group possesses data and information accumulated over many years of business operations, which are highly valuable assets.

To leverage this financial data for advertising and marketing operations, SMBC Digital Marketing was established in July 2021. For its launch, the Group partnered with the Dentsu Group, which possesses extensive expertise and a proven track record in advertising and marketing.

Okubo: By combining the diverse financial data and financial services like apps held by the SMBC Group with advertising, we might create new forms of advertising and marketing. I joined with that expectation. I am currently seconded from Dentsu Inc. to SMBC Digital Marketing, where I serve as Vice President.

──What specific businesses are you conducting?

Takano: We analyze data held by SMBC and deliver advertising content deemed suitable for customers across SMBC's media channels, including apps, email, and paper direct mail. A crucial point is that when SMBC Digital Marketing delivers advertising, we do not provide personal information to third parties, such as Dentsu Group companies or corporate clients who are advertisers. We prioritize customer safety and security in our operations, including regular monitoring involving external experts like lawyers to ensure personal information is managed appropriately.

Specifically, we estimate life events such as entering higher education or moving based on the attributes and account usage patterns of our 28 million ID customers. We then deliver advertisements tailored to each customer's needs through SMBC apps and other channels.

SMBC has long delivered advertisements for its own products and services by capturing customers' life events. The new initiative undertaken by SMBC Digital Marketing is to deliver advertisements for non-financial companies outside the SMBC Group.

──What are the characteristics of this data?

Takano: The first-party data held by banks is characterized by its high accuracy and the fact that it is accumulated over many years of transactions. We believe that using such precise data to infer life events and life stages also leads to delivering useful information to customers. As part of a financial group, we aim to create advertisements that customers can engage with confidently.

Okubo: Banks and financial institutions often maintain long-term relationships with customers once they open an account. It's not uncommon for someone to open an account when they start working and then use it for decades. Data that can be seen as a record of the user's life journey accumulates. We analyze this data to conduct our advertising and marketing business.

We can run ads and conduct marketing based on accurate data.

──What are the benefits of utilizing financial data for advertising and marketing?

Okubo: With existing advertising options, it can be difficult to gain detailed insights into the target audience you want to reach. Often, we can only estimate interests or financial capacity based on website browsing information. In contrast, we can deliver ads based on precise information like attributes, products held, and service usage data.

Takano: When life events occur or life stages change, how people use their accounts also changes. For example, customers open accounts when they start a new job or take out a mortgage when purchasing a home. While banks have traditionally addressed financial needs during these life events, non-financial needs also arise at these times. We deliver valuable information to customers through advertising, covering both financial and non-financial aspects. This unique marketing capability is a distinct strength we possess.

──I see. Are there strengths unique to SMBC?

Okubo: To commercialize advertising, reaching a certain base of customers is essential. SMBC has approximately 28 million accounts. Our strength lies in the fact that our extensive customer base allows us to guarantee a substantial audience even for niche products.

──What kinds of advertising examples have you had so far?

Takano: Companies across diverse industries like cosmetics, food and beverage, retail, and publishing have utilized our services. A notable example is advertising for real estate companies. Using our proprietary data, we scored individuals likely considering home purchases and served different ads to high- and low-scoring groups. This resulted in a 1.3x difference in click-through rates, showing higher-scoring individuals were more likely to click.

──How do clients evaluate your service?

Takano: First, they highly value the ability to place ads in very brand-safe locations. Companies are extremely concerned about where their ads appear and what information they're paired with. On the customer side, we feel we've earned their trust that "SMBC wouldn't send weird ads."

Okubo: For the app, ads appear at the top of the screen, making them highly visible—another point clients value. Ad click-through rates generally exceed 1%, which is considered high by industry standards. Compared to other media, the cost per click isn't excessively high, and clients appreciate that we effectively drive their target audience to their websites.

Takano: Additionally, we properly mask personal information, convert it into statistical data, and provide analysis reports to advertisers after delivery. These reports are based on accurate attributes, enabling advertisers to utilize the insights for subsequent marketing efforts, which is highly appreciated.

There are other points that are highly valued. Digital advertising faces challenges like cookie regulations, making retargeting difficult. We propose advertising campaigns that combine apps and email to advertisers. This involves delivering detailed information via email to people who clicked on an ad within the app. We've seen results where people who clicked on an ad in the app were about 1.7 times more likely to view the email ad compared to those who didn't.

The foundation of our business is the "trustworthiness" unique to financial institutions

──What precautions do you take when handling sensitive data, such as financial information?

Takano: Financial institutions are built on trust. We are constantly mindful that this is an advertising and marketing business conducted by a financial institution. Beyond strictly regulating personal information handling internally, we conduct regular monitoring involving lawyers after advertising campaigns to verify proper data usage and deletion.

Okubo: As Takano mentioned, we meticulously verify all legal aspects. Dentsu Inc. supports marketing for various companies and possesses extensive knowledge on data utilization cases and precautions.

Regarding advertising expressions, SMBC and SMBC Digital Marketing perform double checks. While legal perspectives are essential, expressions that raise concerns from a consumer viewpoint may also be requested for revision by the advertiser.

Takano: Since these ads are seen by SMBC customers, the ad review process is quite thorough, isn't it?

Okubo: During review, multiple people check a single ad banner, and we also thoroughly verify the expressions on the advertiser's landing page linked from the banner. For example, if it's a campaign announcement, we cross-check it against the Prize Display Act to confirm it's acceptable.

Takano: In some cases, we even seek opinions from lawyers. Above all, we prioritize our customers' "peace of mind," "safety," and "trust."

We recognize that public scrutiny of web advertising has become quite strict these days. Repeatedly showing the same ad is unpleasant for customers and damages the brand. Moreover, repeatedly showing ads to uninterested people is a waste of ad spend. Therefore, we limit the number of times an ad is displayed and design the system so ads from the same industry don't appear to the same customer at the same time. We also take care not to narrow the target audience too much, avoiding overly pinpoint ad delivery that might be uncomfortable for customers.

Okubo: Legally ensuring ads are compliant and appropriate is separate from reputation concerns. It's not enough to just be legally compliant; we constantly prioritize avoiding anything that might be unpleasant for SMBC customers.

We aim to provide information and experiences beyond financial services

──What are your current challenges and future outlook?

Okubo: We aim to further enhance our capabilities—both in displaying optimal ads for individual customers and in providing highly effective digital marketing for corporate advertisers. We'll advance our services through both data and customer touchpoints. We may even create new touchpoints ourselves and are eager to take on various challenges.

Takano: Above all, I feel the bank's own business is changing now. It's no longer just about depositing or borrowing money. We need to consider how we will interact with customers then and what kind of communication we can achieve by analyzing financial data. I believe SMBC possesses significant potential in its media and data.

Okubo: Currently, there aren't many cases where financial data is utilized for advertising or marketing. First, we want to communicate the benefits of using financial data for marketing.

Takano: Furthermore, the entire SMBC Group will continue to focus on providing services beyond financial services. Beyond advertising and marketing, there is a trend toward offering non-financial services. Customers' life events don't just require financial services, right? Therefore, we want to respond to various needs. I believe this will also lead to the transformation of the bank's own business, and I want to play a part in that. I also believe there are things we can achieve specifically because we are the Dentsu Group.

[Contact]
SMBC Digital Marketing: https://www.smbc-digitalmarketing.co.jp/