That brings us to bank customer acquisition cost (CAC) — a key business metric that can reveal quite a bit about your bank’s long-term profitability and potential for achieving sustainable growth. 

This article will cover the ins and outs of bank customer acquisition costs and share actionable tips and strategies you can implement to reduce CAC.

What is customer acquisition cost in banking? 

The global market volume of neobanks — fintech companies and digital banking platforms, often referred to as “challenger banks” — was estimated at $4.96 trillion in 2023. It’s expected to continue growing at a compound annual growth rate (CAGR) of 13.15% in the coming years, potentially reaching $10.44 trillion by 2028.

That’s enough of an indicator that the financial services industry is now a highly competitive landscape where companies are often competing for the attention of a relatively limited audience. 

Plus, several app-only banks based in Europe have made significant progress in attracting new customers to their financial products: 

Unsurprisingly, this flurry of competition is putting upward pressure on customer acquisition and retention costs across the banking sector.

Customer acquisition cost (CAC) — the sum of all costs and resources related to acquiring an additional customer — is one of the key business metrics to keep an eye on when trying to maximise your return on investment (ROI) and profitability, especially if your company operates in the banking industry.

Here’s the basic formula you can use to calculate the cost of acquisition in banking: 

Customer Acquisition Cost (CAC) = Total Amount Spent (TS) / Total New Customers Acquired (TNC)

In essence, it requires you to divide the total cost of acquiring consumers — including sales and marketing expenses — by the total number of new customers your company has gained within a specific timeframe.

There’s one thing you need to keep in mind: 

The customer acquisition process involves more than just your marketing and sales departments. 

While marketing and sales channels play a crucial role in this process, the list of expenses that may contribute to customer acquisition costs in banking goes well beyond that. 

Here’s a quick breakdown of the customer acquisition cost formula to show you which costs make up the total amount spent: 

• All advertising and marketing costs, including traditional (direct mail, billboards, TV and print advertising) and digital channels (email, Google ads, social media and influencer marketing)
• Cost of outsourced marketing services, including any independent contractors involved in the process 
• Salaries and commissions for the marketing team and sales representatives
• Software subscriptions, including marketing software and web analytics tools 
• Other overhead and operational costs 

And until you’ve taken all these expenses into account, you won’t be able to accurately estimate how much it actually costs you to attract potential customers.

Another thing to keep in mind is that there’s no universal definition of “good CAC.” 

The average customer acquisition cost varies across different industries and business models. That said, you can generally expect a higher-than-average CAC in highly competitive sectors — namely, the financial, manufacturing and real estate industries. 

Importance of tracking customer acquisition cost in banking 

Customer acquisition costs are an important indicator of a banking business’s potential growth and profitability. Monitoring this fundamental business metric can provide data-driven insights about your current bank customer acquisition strategy — and offers a few notable benefits: 

• Measuring the performance and effectiveness of different channels and campaigns and making data-driven decisions regarding future marketing efforts
• Improving return on investment (ROI) by determining the most effective strategies for acquiring new customers 
• Improving profitability by assessing the value per customer and improving profit margins 
• Benchmarking against industry competitors to see where your business’s CAC stands compared to the banking industry average

At the risk of stating the obvious, acquiring new customers isn’t always easy. That’s true for many highly competitive industries — especially the banking sector, which is currently witnessing the rapid rise of digital disruptors. 

Case in point, the fintech market alone is currently valued at $312.98 billion and is expected to reach $556.70 billion by 2030, following a CAGR of 14%.

However, strong competition is only one of the challenges banks face throughout the process of attracting potential customers. 

Here are a few other things to keep in mind: 

• Ethical business practices and strict compliance requirements when it comes to the privacy and security of customer data, including meeting data protection standards and ensuring regulatory compliance
• Lack of personalisation throughout the customer journey, which today’s customers view as a lack of understanding of — and even interest in — their needs and preferences 
• Limited mobile banking capabilities, which further points to a failure to innovate and adapt — one of the leading risks that financial services may face 

7 strategies for reducing bank customer acquisition costs 

When working on optimising your banking customer acquisition strategy, the key thing to keep in mind is that there are two sides to improving CAC: 

On the one hand, you have efforts to decrease the costs associated with acquiring a new customer — and on the other, you have the importance of attracting high-value customers. 

1. Eliminate friction points in the customer onboarding process

One of the first things financial institutions should do is examine their existing digital onboarding process and look for friction points that might cause potential customers to drop off. After all, a streamlined onboarding process will minimise barriers to conversion, increasing the number of new customers acquired and improving overall customer satisfaction. 

Keep in mind that, at the 30-day mark, finance mobile apps have an average user retention rate of 3%: 

That says a lot about the importance of providing a frictionless onboarding experience as a retail bank or any other financial institution. 

Granted, a single point of friction is rarely enough to cause customers to churn. It’s typically a combination of several factors — a lengthy sign-up process with complicated password requirements and time-consuming customer identification or poor customer service, for example — that occur during the key moments of the customer journey.

In order to keep tabs on customer experiences across different touchpoints and spot potential barriers in their journey, you’ll need a reliable source of data. Matomo’s Funnels report can show you exactly where your website visitors are dropping off. 

2. Get more personalised with your marketing efforts 

Generic experiences are rarely the way to go — especially when you’re contending for the attention of prospective customers in such a competitive sector. 

Besides, 62% of people who made an online purchase within the last six months have said that brands would lose their loyalty following a non-personalised experience. 

What’s more shocking is that only a year earlier, that number stood at 45%.

When it comes to improving marketing efficiency and sales strategies, 94% of marketers agree that personalisation is key: 

It’s evident that personalised marketing supported by behavioural segmentation can significantly improve conversion rates — and, most importantly, reduce acquisition costs. 

Of course, it’s virtually impossible to deliver targeted, personalised marketing messaging without creating audience segments and detailed buyer personas. Matomo’s Segmentation feature can help by allowing you to split website visitors into smaller groups and get much-needed insights for behavioural segmentation. 

3. Build an omnichannel marketing strategy 

Customer expectations, behaviours and preferences are constantly evolving, making it crucial for financial services to adapt their customer acquisition strategies accordingly. Meeting prospective customers on their preferred channels is a big part of that. 

The issue is that modern banking customers tend to move across different channels. That’s one of the reasons why it’s becoming increasingly more difficult to deliver a unified experience throughout the entire customer journey and close the gap between digital and in-person customer interactions. 

Omnichannel marketing gives you a way to keep up with customers’ ever-evolving expectations:

Adopting this marketing strategy will allow you to meet customers where they are and deliver a seamless experience across a wide range of digital channels and touchpoints, leading to more exposure — and, ultimately, increasing the number of acquired customers.

Matomo can support your omnichannel efforts by providing accurate, unsampled data needed for cross-channel analytics and marketing attribution. 

4. Work on your social media presence 

Social networks are among the most popular — and successful — digital marketing channels, with millions (even billions, depending on the platform) of active users. 

In fact, 89% of marketers report using Facebook as their main platform for social media marketing, while another 80% use Instagram to reach their target audience and promote their business. 

And according to The State of Social Media in Banking 2023 report, nine out of ten banks (89%) consider social media is important, while another 88% are active on their social media accounts. 

That is to say, even traditionally conservative industries — like banking and finance — realise the crucial role of social media in promoting their services and engaging with customers on their preferred channels: 

It’s an excellent way for businesses in the financial sector to gain exposure, drive traffic to their website and acquire new customers. 

If you’re ready to improve social media visibility as part of your multichannel efforts, Matomo can help you track social media activity across 70 different platforms. 

5. Shift the focus on customer loyalty and retention 

Up until this point, the focus has mainly been on building new business relationships. However, one thing to keep in mind is that retaining existing customers is generally cheaper than investing in customer acquisition activities to attract new ones. 

Of course, customer retention won’t directly impact your CAC. But what it can do is increase customer lifetime value, contributing to your company’s revenue and profits — which, in turn, can “balance out” your acquisition costs in the long run.

That’s not to say that you should stop trying to bring in new clients; far from it. 

However, focusing on increasing customer loyalty — namely, delivering excellent customer service and building lasting business relationships — could motivate satisfied customers to become brand advocates. 

As this survey of customer satisfaction for leading banks in the UK has shown, when clients are satisfied with a bank’s products and services, they’re more likely to recommend it. 

Positive word-of-mouth recommendations can be a powerful way to drive customer acquisition. You can leverage that by launching a customer referral program and incentivising loyal customers to refer new ones to your business. 

6. A/B test different elements to find ones that work 

We’ve already underlined the importance of understanding your audience; it’s the foundation for optimising the customer journey and delivering targeted marketing efforts that will attract more customers. 

Another proven method that can be used to refine your customer acquisition strategy is A/B or split testing. 

It involves testing different versions of specific elements of your marketing content — such as language, CTAs and visuals — to determine the most effective combinations that resonate with your target audience. 

Besides your marketing campaigns, you can also split test different variants of your website or mobile app to see which version gets them to convert. 

Matomo’s A/B Testing feature can be of huge help here: 

7. Track other relevant customer acquisition metrics 

To better assess your company’s profitability, you’ll have to go beyond CAC and factor in other critical metrics — namely, customer lifetime value (CLTV), churn rate and return on investment (ROI). 

Here are the most important KPIs you should monitor in addition to CAC: 

• Customer lifetime value (CLTV), which represents the revenue generated by a single customer throughout the duration of their relationship with your company and is another crucial indicator of customer profitability 
• Churn rate — the rate at which your company loses clients within a given timeframe — can indicate how well you’re retaining customers 
• Return on investment (ROI) — the revenue generated by new clients compared to the initial costs of acquiring them — can help you identify the most effective customer acquisition channels 

These metrics work hand in hand. There needs to be a balance between the revenue the customer generates over their lifetime and the costs related to attracting them.

Ideally, you should be aiming for lower CAC and customer churn and higher CLTV; that’s usually a solid indicator of financial health and sustainable growth. 

Lower bank customer acquisition costs with Matomo  

Acquiring new customers will require a lot of time and resources, regardless of the industry you’re working in — but can be even more challenging in the financial sector, where you have to adapt to the ever-changing customer expectations and demands. 

The strategies outlined above — combined with a thorough understanding of your customer’s behaviours and preferences — can help you lower the cost of bank customer acquisition.

On that note, you can learn a lot about your customers through web analytics — and use those insights to support your customer acquisition process and ensure you’re delivering a seamless online banking experience. 

If you need an alternative to Google Analytics that doesn’t rely on data sampling and ensures compliance with the strictest privacy regulations, all while being easy to use, choose Matomo — the go-to web analytics platform for more than 1 million websites around the globe. 

CTA: Start your 21-day free trial today to see how Matomo’s all-in-one solution can help you understand and attract new customers — all while respecting their privacy. 

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Beyond cybersecurity, fintech and financial services (finserv) companies are bogged down with massive amounts of data spread throughout disconnected systems. Between this, a complex regulatory landscape and an increasingly tech-savvy and sceptical consumer base, fintech and finserv companies have a lot on their plates.

How can marketing teams get the information they need while staying focused on compliance and providing customer value? 

This article will examine strategies to address common challenges in the finserv and fintech industries. We’ll focus on using appropriate tools, following effective data management practices, and learning from traditional banks’ approaches to similar issues.

What are the biggest fintech data analytics challenges, and how do they intersect with traditional banking?

Recent years have been tough for the fintech industry, especially after the pandemic. This period has brought new hurdles in data analysis and made existing ones more complex. As the market stabilises, both fintech and finserve companies must tackle these evolving data issues.

Let’s examine some of the most significant data analytics challenges facing the fintech industry, starting with an issue that’s prevalent across the financial sector:

1. Battling data silos

In a recent survey by InterSystems, 54% of financial institution leaders said data silos are their biggest barrier to innovation, while 62% said removing silos is their priority data strategy for the next year.

Data silos segregate data repositories across departments, products and other divisions. This is a major issue in traditional banking and something fintech companies should avoid inheriting at all costs.

Siloed data makes it harder for decision-makers to view business performance with 360-degree clarity. It’s also expensive to maintain and operationalise and can evolve into privacy and data compliance issues if left unchecked.

To avoid or remove data silos, develop a data governance framework and centralise your data repositories. Next, simplify your analytics stack into as few integrated tools as possible because complex tech stacks are one of the leading causes of data silos.

Use an analytics system like Matomo that incorporates web analytics, marketing attribution and CRO testing into one toolkit.

Matomo’s support plans help you implement a data system to meet the unique needs of your business and avoid issues like data silos. We also offer data warehouse exporting as a feature to bring all of your web analytics, customer data, support data, etc., into one centralised location.

Try Matomo for free today, or contact our sales team to discuss support plans.

2. Compliance with laws and regulations

A survey by Alloy reveals that 93% of fintech companies find it difficult to meet compliance regulations. The cost of staying compliant tops their list of worries (23%), outranking even the financial hit from fraud (21%) – and this in a year marked by cyber threats.

Data privacy laws are constantly changing, and the landscape varies across global regions, making adherence even more challenging for fintechs and traditional banks operating in multiple markets. 

In the US market, companies grapple with regulations at both federal and state levels. Here are some of the state-level legislation coming into effect for 2024-2026:

• Oregon – Oregon Consumer Privacy Act (July 1, 2024)
• Florida – Florida Digital Bill of Rights (July 1, 2024)
• Texas – Texas Data Privacy and Security Act (July 1, 2024)
• Montana – Montana Consumer Data Privacy Act (October 1, 2024)
• Delaware – Delaware Personal Privacy Act (January 1, 2025)
• Iowa – Iowa Consumer Data Protection Act (January 1, 2025)
• New Jersey – SB 332 (January 15, 2025)
• Tennessee – Tennessee Information Protection Act (July 1, 2025)
• Indiana – Indiana Consumer Data Protection Act ( January 1, 2026)

Other countries are also ramping up regional regulations. For instance, Canada has Quebec’s Act Respecting the Protection of Personal Information in the Private Sector and British Columbia’s Personal Information Protection Act (BC PIPA).

Ignorance of country- or region-specific laws will not stop companies from suffering the consequences of violating them.

The only answer is to invest in adherence and manage business growth accordingly. Ultimately, compliance is more affordable than non-compliance – not only in terms of the potential fines but also the potential risks to reputation, consumer trust and customer loyalty.

This is an expensive lesson that fintech and traditional financial companies have had to learn together. GDPR regulators hit CaixaBank S.A, one of Spain’s largest banks, with multiple multi-million Euro fines, and Klarna Bank AB, a popular Swedish fintech company, for €720,000.

To avoid similar fates, companies should:

1. Build solid data systems
2. Hire compliance experts
3. Train their teams thoroughly
4. Choose data analytics tools carefully

Remember, even popular tools like Google Analytics aren’t automatically safe. Find out how Matomo helps you gather useful insights while sticking to rules like GDPR.

3. Protecting against data security threats

Cyber threats are increasing in volume and sophistication, with the financial sector becoming the most breached in 2023.

The cybersecurity risks will only worsen, with WEF estimating annual cybercrime expenses of up to USD $10.5 trillion globally by 2025, up from USD $3 trillion in 2015.

While technology brings new security solutions, it also amplifies existing risks and creates new ones. A 2024 McKinsey report warns that the risk of data breaches will continue to increase as the financial industry increasingly relies on third-party data tools and cloud computing services unless they simultaneously improve their security posture.

The reality is that adopting a third-party data system without taking the proper precautions means adopting its security vulnerabilities.

In 2023, the MOVEit data breach affected companies worldwide, including financial institutions using its file transfer system. One hack created a global data crisis, potentially affecting the customer data of every company using this one software product.

The McKinsey report emphasises choosing tools wisely. Why? Because when customer data is compromised, it’s your company that takes the heat, not the tool provider. As the report states:

“Companies need reliable, insightful metrics and reporting (such as security compliance, risk metrics and vulnerability tracking) to prove to regulators the health of their security capabilities and to manage those capabilities.”

Don’t put user or customer data in the hands of companies you can’t trust. Work with providers that care about security as much as you do. With Matomo, you own all of your data, ensuring it’s never used for unknown purposes.

4. Protecting users’ privacy

With security threats increasing, fintech companies and traditional banks must prioritise user privacy protection. Users are also increasingly aware of privacy threats and ready to walk away from companies that lose their trust.

Cisco’s 2023 Data Privacy Benchmark Study reveals some eye-opening statistics:

• 94% of companies said their customers wouldn’t buy from them if their data wasn’t protected, and 
• 95% see privacy as a business necessity, not just a legal requirement.

Modern financial companies must balance data collection and management with increasing privacy demands. This may sound contradictory for companies reliant on dated practices like third-party cookies, but they need to learn to thrive in a cookieless web as customers move to banks and service providers that have strong data ethics.

This privacy protection journey starts with implementing web analytics ethically from the very first session.

The most important elements of ethically-sound web analytics in fintech are:

1. 100% data ownership: Make sure your data isn’t used in other ways by the tools that collect it.
2. Respecting user privacy: Only collect the data you absolutely need to do your job and avoid personally identifiable information.
3. Regulatory compliance: Stick with solutions built for compliance to stay out of legal trouble.
4. Data transparency: Know how your tools use your data and let your customers know how you use it.

Read our guide to ethical web analytics for more information.

5. Comparing customer trust across industries 

While fintech companies are making waves in the financial world, they’re still playing catch-up when it comes to earning customer trust. According to RFI Global, fintech has a consumer trust score of 5.8/10 in 2024, while traditional banking scores 7.6/10.

This trust gap isn’t just about perception – it’s rooted in real issues:

• Security breaches are making headlines more often.
• Privacy regulations like GDPR are making consumers more aware of their rights.
• Some fintech companies are struggling to handle fraud effectively.

According to the UK’s Payment Systems Regulator, digital banking brands Monzo and Starling had some of the highest fraudulent activity rates in 2022. Yet, Monzo only reimbursed 6% of customers who reported suspicious transactions, compared to 70% for NatWest and 91% for Nationwide.

So, what can fintech firms do to close this trust gap?

• Start with privacy-centric analytics from day one. This shows customers you value their privacy from the get-go.
• Build and maintain a long-term reputation free of data leaks and privacy issues. One major breach can undo years of trust-building.
• Learn from traditional banks when it comes to handling issues like fraudulent transactions, identity theft, and data breaches. Prompt, customer-friendly resolutions go a long way.
• Remember: cutting-edge financial technology doesn’t make up for poor customer care. If your digital bank won’t refund customers who’ve fallen victim to credit card fraud, they’ll likely switch to a traditional bank that will.

The fintech sector has made strides in innovation, but there’s still work to do in establishing trustworthiness. By focusing on robust security, transparent practices, and excellent customer service, fintech companies can bridge the trust gap and compete more effectively with traditional banks.

6. Collecting quality data

Adhering to data privacy regulations, protecting user data and implementing ethical analytics raises another challenge. How can companies do all of these things and still collect reliable, quality data?

Google’s answer is using predictive models, but this replaces real data with calculations and guesswork. The worst part is that Google Analytics doesn’t even let you use all of the data you collect in the first place. Instead, it uses something called data sampling once you pass certain thresholds.

In practice, this means that Google Analytics uses a limited set of your data to calculate reports. We’ve discussed GA4 data sampling at length before, but there are two key problems for companies here:

1. A sample size that’s too small won’t give you a full representation of your data.
2. The more visitors that come to your site, the less accurate your reports will become.

For high-growth companies, data sampling simply can’t keep up. Financial marketers widely recognise the shortcomings of big tech analytics providers. In fact, 80% of them say they’re concerned about data bias from major providers like Google and Meta affecting valuable insights.

This is precisely why CRO:NYX Digital approached us after discovering Google Analytics wasn’t providing accurate campaign data. We set up an analytics system to suit the company’s needs and tested it alongside Google Analytics for multiple campaigns. In one instance, Google Analytics failed to register 6,837 users in a single day, approximately 9.8% of the total tracked by Matomo.

In another instance, Google Analytics only tracked 600 visitors over 24 hours, while Matomo recorded nearly 71,000 visitors – an 11,700% discrepancy.

Financial companies need a more reliable, privacy-centric alternative to Google Analytics that captures quality data without putting users at potential risk. This is why we built Matomo and why our customers love having total control and visibility of their data.

Unlock the full power of fintech data analytics with Matomo

Fintech companies face many data-related challenges, so compliant web analytics shouldn’t be one of them. 

With Matomo, you get:

• An all-in-one solution that handles traditional web analytics, behavioural analytics and more with strong integrations to minimise the likelihood of data siloing
• Full compliance with GDPR, CCPA, PIPL and more
• Complete ownership of your data to minimise cybersecurity risks caused by negligent third parties
• An abundance of ways to protect customer privacy, like IP address anonymisation and respect for DoNotTrack settings
• The ability to import data from Google Analytics and distance yourself from big tech
• High-quality data that doesn’t rely on sampling
• A tool built with financial analytics in mind

Don’t let big tech companies limit the power of your data with sketchy privacy policies and counterintuitive systems like data sampling. 

Start your Matomo free trial or request a demo to unlock the full power of fintech data analytics without putting your customers’ personal information at unnecessary risk.