By Neil Svensen, CEO at Rufus Leonard
The advent of new technologies has revolutionised customer experience across a variety of sectors. In financial services, we’ve seen the emergence of telephone, online and mobile banking services to satisfy consumer demand for anytime, anywhere banking. So surely banks have fully embraced the new technology era and are well on their way to digital transformation?
Well, no – for many, there’s still a long way to go. Digital transformation is never just about ticking a box saying you’ve modernised, enhanced your website or created a new mobile banking app. It’s about creating a more efficient, consistent way to do business in a way that’s unique to your brand and a fundamental part of a bigger strategic roadmap for your entire organisation.
The idea that you can’t separate technology and your use of it from how your business lives and breathes is something board level executives sometimes shy away from. But it’s today’s reality, and one that successful disruptors instinctively understand. The world of traditional banking changed completely when FinTech companies started to gain traction with consumers due to the accessibility, flexibility and availability of the financial products which they provide. It wasn’t that these companies simply muscled-in on traditional banking models – rather they completely changed the perceptions of commerce.
One of the reasons these disruptors are successful is the brand experience (BX) they provide. Not only does this influence how a customer feels about a business, but it also has a significant financial impact on customer spend, loyalty and recommendations. Our own studies show that brands with a good BX command 79% higher purchase intent and an average of 45 more Net Promoter Score (NPS) points than the lowest performing organisations.
However, despite the clear business impact of brand experience, banking and financial services organisations continue to struggle to deliver consistent, connected and meaningful customer experiences. Today, consumers enjoy seamless and stimulating interactions from brands like Deliveroo, AirBnB and Uber. These companies have changed consumer expectations; if a bank’s customers don’t get the same experience, they embrace the tech-based, more appealing alternatives. Amazon Payments, Google Wallet and Apple Pay are 100% digital financial services, built around the user, with a thoroughly modern understanding of today’s marketplace. It’s no wonder that consumers are increasingly persuaded to bypass legacy banking organisations in favour of using new digitally-led firms for many financial transactions.
In this new competitive landscape, traditional banks and financial service providers are having to fight back to reclaim market share. While they recognise it’s hard for them to change legacy systems and processes quickly, the savvy among them can also see that the threat is as much about customer interaction as it is about “being digital”. Metro Bank was the first new high street bank to enter the UK market for over 150 years. It opened its first branch in 2010, driven by brand values, service and convenience. It opens seven days a week, 12 hours a day and offers a new account in 15 minutes. Nearly a decade later, and with a bagful of awards under its belt, it is still going strong.
So, on the one hand we have the tech-driven disruptors, and on the other hand we have new physical entrants evolving a traditional service model– both of whom are vying to bring greater convenience to financial transactions and therefore a better customer experience. A bank needs to establish a relationship which goes beyond the facilitation of transactions for its customers – thereby fulfilling the brand promise, whatever the touchpoint. Whether customers are interacting with a chatbot, a mobile app or a human being in a local high street branch, brand remains utterly critical to a bank’s relationship with the customer. So how can banks navigate the newly technological landscape to build loyalty with customers and make them genuinely happy to do business with them?
It is vital banks demonstrate a clear purpose through their brand and that everything they do is consistent with that central thought. Your brand is something that transcends an advertising slogan – it’s something customers feel whenever they interact with you, whether that be interacting with a human being or a new digital interface.
While it’s easy for banks to rush headlong towards digital tools that will offer greater speed and ease of access for customers wherever they may be, the human element of banking cannot be underestimated when dealing with a subject so emotive as money; financial transactions are simply the route by which people obtain the products and services they desire, need and aspire to. A strong brand purpose offers consumers a clear connection to their own persona and life stage through powerful emotive drivers, like friendship (Nationwide), ambition (HSBC) or understanding (First Direct).
Whatever the brand purpose, the entire organisation has to be behind it, live it and deliver it to customers at every interaction – not only from staff at the overseas call centre and the local branch, but also via the chatbot interface, mobile app and Amazon Echo skill. This means investing and committing with both the head – looking at operational and strategic challenges – and the heart – asking fundamental questions like, ‘what will inspire our people and our customers?’ Human or digital, every touchpoint is an opportunity to contribute towards the overall brand experience – from ensuring cashpoints and online banking services are working, to having knowledgeable, personable staff always available and well-programmed chatbots effectively managing customer queries.
Lloyds Bank is a good example of a bank with a focus on brand experience. It uses emotionally-led, purpose-driven communications to clarify its purpose at both a group level – ‘Helping Britain Prosper’ – and at brand level – ‘By Your Side’ – fostering emotion in a category which has always been functionally-led.
Of course, it’s not simply about a recognisable brand and a nice horse. At a time when trust in financial services and the role of the local branch are under unprecedented scrutiny, Lloyds Bank focuses on employee engagement with initiatives such as its digital brand toolkit and an innovative internal programme of electronic staff surveys to ensure consistent delivery of an outstanding brand experience throughout the organisation. It has also invested in its digital infrastructure – £1bn since 2015 – making bold forays into apps, with a market-leading current account support app and an Amazon Echo interface. The numbers tell you its brand-led, digital transformation strategy is working – in the last year, underlying profit increased by 8% compared to 2016 and the number of mobile banking users increased to 9.3 million.
But no market leader can rest on their laurels. New FinTech offerings and customer experiences from other sectors continue to raise expectations, bringing a buzz of change to financial services. To remain at the forefront of their industry, banks must constantly renew and refresh their approach to brand experience through continual innovation in service design and digital service delivery to meet evolving customer needs. Whatever happens, it will be the banks that keep customer needs and brand promise front and central to their organisations that will continue to succeed.