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What Financial Services can learn from Building Societies and their “Customer First” philosophy

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What Financial Services can learn from Building Societies and their “Customer First” philosophy

Tom Huxtable, Director, Thunderhead 

Historically, building societies are seen as the epitome of trust and empathy.

They’ve always had customers at the heart of their business, and it’s fair to say that they operate on a relatively simple and robust principal of co-operation – something all companies should aspire to.

The business world today is facing an interesting challenge when it comes to customer engagement. As customers expect more, they are demanding higher levels of service and value and, according to a recent PWC Banking and Retail 2020 report, their level of trust is currently at an all-time low.

Interestingly though, this presents an opportunity for some B2C financial services to get ahead. They have the chance to meet customer expectations by emulating the original Building Society ethos.

How can consumer financial services drive long-term relationships, build trust and attend to customer’s needs in an era of digital transformation?

Here’s some key considerations –

Stay relevant amongst competition

Customer engagement is a fundamental driver for all industries but it can be hard to achieve. It can also be hard to stand out and lead the way when it comes to best practice in personal finance.

All financial services face pressures from new, dynamic market entrants, who have clout and power thanks to their scale and reach. These companies have made it easy for customers to carry out simple transactions online and via apps – which gives an overall more effortless service – something consumers crave as it fits around their busy life. Our customer journey with these kind of companies – not always banking – is smooth, effortless and the brands are visibly working with us rather than causing obstacles. To replicate this, providers can look at their customer journey and ensure the experience feels like a partnership, trying to understand the customer as much as possible and using insight from online and offline touch-points to meet the customers’ in the moment needs.

By championing customer loyalty and being local,financial services can conduct an extremely personalised service, using technology to assist. It’s time to extend personalization throughout the entire customer journey online and offline. This is a message highlighted in BCG’s recent Global Banking 2018: The Power of Personalization report, which stresses how retail banks who have implemented the most effective digital strategies – that cater to the customer convenience – are seeing an increase in economic benefit. 

Breaking the mould: letting go of the outdated channel approach 

An ongoing challenge for FS is adapting to changes in customer expectations around experience. Today’s consumer is anticipating seamless experience based on their preferences – and look for a buying experience that resembles a journey rather than a regimental process.

Banks and building societies, insurers and pension houses are holding pivotal conversations with their clients every day, and this dialogue is more than just data orientated. It’s important to get it right. A recent study conducted by Accenture highlighted that 89% of customers become frustrated with having to repeat their story to multiple representatives (unsurprisingly!). The relationship a customer has with your business will be fortified by demonstrating an in-depth knowledge of individual accounts. 

Mindful customer engagement will equate to business growth

Bain & Company recently shared insights in the report titled, Evolving the Customer Experience in Banking’as to how the customer experience in banking is ever-changing, demonstrating a view that slow adaptation to new technologies could be responsible for holding financial institutions back. For banks, this means they are “ vulnerable to losing the special status they once enjoyed”.

Customers expect a high standard of customer service from all of their investments, and their pursuit of value means they feel no loyalty to any one institution. With freedom of choice and a plethora of options, switching companies to find a better deal is the result if they receive inadequate service. Disruptor banks and lenders offer tempting deals, and if there is no fundamental loyalty in the existing relationship – it is very likely the customer will switch. Without any core client loyalty, financial institutions are at risk of losing significant growth/revenue. With that said, Monzo are without a doubt,  true pioneers when it comes to creating value partnerships with customers in the financial services sector. Their recent public crowdfunding activity saw the bank invite its customers to invest up to £2,000 in a round that raised over £20,000,000 in just two days. The invitation favoured loyal customers, offering early access to those who had invested in previous rounds, and only offering eligibility to pre-existing customers.  This innovative approach put community at the core of the business, and made customers feel part of something bold and exciting. A organic act of engagement and inclusion that saw the company rewarded royally.

Time to hit the reset button and inject a little 17c wisdom into customer relationships

When customers see incoming calls from a business, they can only assume that something is wrong or up fro renewal – why else would they be contacting you? What a shame. This perceived disinterest by financial services could be easily resolved by some timelier check-ins. How about a general chat that doesn’t involve discussing renewal? Yes, let’s put that in place!

Reinstalling the human element to business is essential to form customer loyalty. Timely and mindful interactions with a consumer will ultimately allow financial services to become more trustworthy. By observing, listening to crucial signals from personal conversations with customers, business will know the right platforms to invest in to understand customer intention and deliver what the customer really wants.

It is time to be human towards the customer and see them as people, not a financial bottom line.

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UK fishing sector sees more job losses if post-Brexit export troubles not tackled soon

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UK fishing sector sees more job losses if post-Brexit export troubles not tackled soon 1

By Maytaal Angel

LONDON (Reuters) – Britain could lose more jobs in its fishing sector if the current delays and increased costs involved in exporting to the EU post-Brexit are not ironed out soon, industry groups told British government officials on Tuesday.

Speaking at an Environment, Food and Rural Affairs (EFRA) select committee inquiry, representatives of Britain’s fishing sector said small to medium-sized enterprises were especially at risk and called on the government to urgently negotiate new export rules with the EU.

“(Even) if we get (export) systems sorted, we will still have cost implications. In the medium term, small companies will stop trade to Europe and it may even be their demise,” said Donna Fordyce, chief executive of Seafood Scotland.

“It’s a real worry. These people can’t see a future.”

Under a Brexit deal reached late last year, British trade with the EU remains free of tariffs and quotas. But the establishment of a full customs border means goods must be checked and paperwork filled in, damaging express delivery systems.

Fresh food sectors like fishing and meat have been particularly hard hit, with export paperwork costs soaring and delivery delays prompting EU buyers to reject British produce or to pay less for it.

Sarah Horsfall, co-chief executive of the Shellfish Association of Great Britain, said some British shellfish companies had already shut their doors, buckling under the pressure of the COVID-19 pandemic, and then Brexit.

She said paperwork costs per consignment have increased by 400-600 pounds. On top of that, companies often need to hire two or three extra staff just to fill in the paperwork, adding to costs.

Another point of contention for the British seafood sector is that EU exporters are currently not facing increased costs or delays in sending goods to Britain because the UK has postponed introducing reciprocal customs checks by three to six months.

“Exporters we deal with are considering relocating to the EU. We have to address this urgently if we want to grow, because at the moment we are at the risk of doing the opposite,” said Martyn Youell, senior manager of fisheries and quotas at fishing company Waterdance.

(Reporting by Maytaal Angel; Editing by Sonya Hepinstall)

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Fall in UK economic activity bottoms out in February – PMI

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Fall in UK economic activity bottoms out in February - PMI 2

LONDON (Reuters) – British economic output stabilised in February after a sharp fall the month before, as many businesses continued to suffer from lockdown restrictions affecting hospitality and other face-to-face services, a closely watched survey showed on Wednesday.

Hours before finance minister Rishi Sunak is due to set out his economic plans for the coming year, the IHS Markit/CIPS composite Purchasing Managers’ Index gave a reading of 49.6 for February, up from an eight-month low of 41.2 in January.

The figure means businesses reported broadly stable activity for last month after a steep deterioration early in the year, and is little changed from an initial flash estimate of 49.8.

The PMI for the services sector alone rose to a four-month high of 49.5 in February from January’s eight-month low of 39.5, again in line with the initial flash estimate.

“Restrictions on travel, leisure and hospitality due to the national lockdown continued to curtail overall activity, but there were some pockets of growth in technology and business services,” financial data company IHS Markit said.

Britain entered its third national coronavirus lockdown in early January, closing schools, non-essential shops and most other businesses open to the public, though people can still travel to work if needed.

Last week Prime Minister Boris Johnson set out a path for easing the lockdown in England as vaccinations roll out rapidly. Schools will reopen next week but full restrictions on hospitality venues will not go until late June at the earliest.

Sunak is expected to set out further spending plans in a budget statement around 1230 GMT after providing almost 300 billion pounds of support during the past year.

Business optimism in the services PMI has risen to its highest since 2006 due to expectations of a return to normality. But many firms still reported difficulties from new, post-Brexit trading restrictions that took effect on Jan. 1.

(Reporting by David Milliken; Editing by Catherine Evans)

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Japan’s SMFG likely to halt all new lending to coal-powered plants, sources say

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Japan's SMFG likely to halt all new lending to coal-powered plants, sources say 3

By Takashi Umekawa

TOKYO (Reuters) – Japan’s Sumitomo Mitsui Financial Group is likely to halt all new financing to coal-fired power plants, including the most efficient ones, two sources said, reflecting growing pressure from investors and environmentalists on Japan’s lenders to cut funding to coal.

While SMFG has said it would not finance new coal-fired power plants in principle, up until now it hasn’t ruled out funding projects seen as more environmentally friendly, such as so-called “ultra-supercritical (USC) power plants” that burn coal more efficiently than older designs.

It is now likely to remove that exception from its lending policy, meaning a complete halt to new finance for coal plants, said the sources, who declined to be named as the information is not public.

Japan’s biggest banks are under increasing pressure from global investors and environmental groups over their long involvement in funding coal projects. Prime Minister Yoshihide Suga has also pushed to achieve zero greenhouse gas emissions, on a net basis, by 2050.

“It’s a fact that the criticism from environmental groups has become so strong,” said one of the sources.

A spokesman for SMFG said nothing had been decided.

(Reporting by Takashi Umekawa; Editing by David Dolan and Edmund Blair)

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