How to get the magic back into our relationship with banks
As with any long-term human relationship, our relationship with banks is complicated. There’s a sense of co-dependence, transgressions that shake our trust, the occasional fleeting thought of escape. Rick Keen, financial services consultancy chief at C Space, ponders how to reignite the magic spark between a bank and its customer.
And of course, every so often there’s a new face on the horizon offering the promise of something new and different. Right now, this face is fintech. It seems to represent a better future, and what’s not to like? Exciting, innovative, revolutionary new services built directly around your needs.
But away from the media scrum and investment hype, what is at the heart of the fintech offer, and can big banks resist the threat?
Under the skin of the fintech revolution
Right now, banks have an obvious advantage. We rely on our bank – our reluctance to switch highlights this. We need current accounts for our wages and bill payments, and we need mortgage lending facilities – all things we can’t get from fintech in the UK just yet. Banks know this and they know that this is not going to change on a big scale anytime soon.
So, for the banks, is fintech just a buzzword? Does it offer them a way to plaster over the customer service cracks that legacy systems and ever-tighter regulation creates? Or is it something to be more worried about?
Since the financial crash, two things have remained constant for financial services: growth fell off a cliff and remains very slow, and trust in the financial system was shot to bits and never really recovered. Companies from across the sector recognise that the two issues are linked and struggled to find a solution to address both.
Along came fintech which, a bit like other disruptors Uber and Zoopla, floated around for a while in conferences and VC circles. Then it was discovered by the mainstream and was hailed as the disruptive savior of the money sector. Apps sprung up, online assessments appeared, AI replaced human contact on phone calls.
This new competition created a renewed focus on the customer across the board.
Is there any love left?
In our work we see consumers’ attitudes to banks still driven by past transgressions – labels like “crooks, swindlers and charlatans” are commonly heard from the 4,000 customers surveyed in our Customer Quotient Report (CQ). In contrast, the best performing brands in that same report are spoken about in terms we often reserve for our friends – the people who truly “get” us. What the top performers all have in common is a relentless focus on the customer.
Because it turns out that what customers really want is universal: trust, empathy, openness, great customer service and emotional rewards. They want brands they feel understand their needs and expectations. This is important because it flips the innovation model too, because honestly, when was the last time you actively recommended your bank?
So which are the UK financial services brands that UK consumers believe are getting this right and, critically, profiting from it:
- First Direct
- Virgin Money
Right now, there are no fintechs on this list. But next year, it’s likely. Today, brands like First Direct take the top spots, with innovations like their 24×7 contact option giving customers contact on their terms. But with challengers like Tandem, “the good bank”, on the horizon this is surely set to change. Tandem, according to Tom Probert, head of insight at the bank, focuses its business around solving problems in people’s lives and they do this in part by being in people’s homes, observing their everyday lives, understanding their wider needs and creating ground-breaking innovation around them.
This obsession with the customer is also emerging at Zurich Insurance where Simon Carpenter, who leads the customer and distributor value proposition for the insurer, runs a global network of online insight communities of customers who can inform strategic decision-making at the touch of a button – in his own words, like having the customer in his pocket.
If UK high street banks are to rebuild a close personal relationship with their customers, they’d do well to start listening and learning before it’s too late.