Connect with us

Global Banking and Finance Review is an online platform offering news, analysis, and opinion on the latest trends, developments, and innovations in the banking and finance industry worldwide. The platform covers a diverse range of topics, including banking, insurance, investment, wealth management, fintech, and regulatory issues. The website publishes news, press releases, opinion and advertorials on various financial organizations, products and services which are commissioned from various Companies, Organizations, PR agencies, Bloggers etc. These commissioned articles are commercial in nature. This is not to be considered as financial advice and should be considered only for information purposes. It does not reflect the views or opinion of our website and is not to be considered an endorsement or a recommendation. We cannot guarantee the accuracy or applicability of any information provided with respect to your individual or personal circumstances. Please seek Professional advice from a qualified professional before making any financial decisions. We link to various third-party websites, affiliate sales networks, and to our advertising partners websites. When you view or click on certain links available on our articles, our partners may compensate us for displaying the content to you or make a purchase or fill a form. This will not incur any additional charges to you. To make things simpler for you to identity or distinguish advertised or sponsored articles or links, you may consider all articles or links hosted on our site as a commercial article placement. We will not be responsible for any loss you may suffer as a result of any omission or inaccuracy on the website. .

Banking

WHAT WILL IT TAKE TO ENCOURAGE PEOPLE TO SWITCH BANK ACCOUNTS?

WHAT WILL IT TAKE TO ENCOURAGE PEOPLE TO SWITCH BANK ACCOUNTS?

Jed Mole, European Marketing Director at Acxiom

If you’re anything like me, you’ve probably been with the same bank (in some form or another) for as long as you can remember. For most of us, there’s something innately unappealing about actually moving our banking from one place to another, even if we have occasional moments when we declare to all ‘that’s it, I’m taking my business elsewhere’! Yeah. Right.

It is actually one of the hardest things to convince someone to do – with Bacs reporting another 4.7% drop in people switching accounts in the 12 months up to July of this year – and in fact, not far off half of us have never changed our bank account according to a recent study by the Future Foundation, in association with the DMA (Direct Marketing Association).

Yet, millions upon millions is spent by banks on marketing strategies and slick(ish) ad campaigns each year to try to do exactly that – get people to switch to their bank and their products; some even offering to pay us to do so!And as more and more banks – be they traditional bricks and mortar, digital disruptors or mobile app – begin to stake their claim on this already crowded marketplace, where should financial services companies be looking to gain a competitive edge on the market to answer that all important question, ‘What will it take to make people switch?’

When you look around the marketplace, the banking world is becoming divided, albeit unevenly, between the ‘traditional’ banking groups reinventing themselves and the tech-savvy digital challengers, bristling with their end-to-end 21st Century smartness to entice the all-important millennial market away with the promise of app-first easy payments, 24/7 services, online systems and mobile apps. However even Atom Bank, which has interested an estimated 40,000 customers in recent months, has only currently managed to convert a total of 2,000 into actual account holders (according reports by the Financial Times).

With these challenger banks like Atom and Monzo entering the marketplace, competition to encourage people to leave their banks and try something new is only becoming more heated – and scattered with shiny displays of tech and digital know-how, from integrations with Transport for London, real time spending updates, AI to predict spending habits, and even ‘try our account out before you commit long term’ approaches. But the answer to getting people to switch could actually be far simpler than we think.

When you think about it, what is really stopping people from switching? Is it really this fear of it being just a massive pain in the arrears? The perception that all bank accounts are the same or that all banks are just as good or bad as each other? Or is it simply that banks simply aren’t finding customers at the right time, when they might want to move?

It seems clear precisely which customers challenger banks have in their sights – young millennials, who are yet to be bogged down with numerous direct debits or notifying employers of new banking details for salaries to be paid in. The new apps will sit comfortably next to Pokémon Go and Snapchat on their phones,providing clever functionality such as predictive spending behaviour and integration with other lifestyle brands that represents the kind of seamless and connected experience most young people expect from their modern technology and brand experiences.

Beyond this audience, the challenge for financial services brands is that it seems,on the whole as a nation, we simply don’t see any compelling benefit in switching. And yet when questioned as part of the DMA’s study, the majority of people only listed ‘no current issue’ as their primary reason for not switching. Now, despite what we might say when surveyed, we’ve all had problems with our bank. Whether it’s been customer service calls that are sales calls, financial reviews where you need every document you’ve ever possessed or being offered deals you don’t qualify for (oh the shame) – nothing’s perfect. Let’s be honest, we’ve all felt like switching in the past – even if we’ve been massively weak in our follow through.

A recent study by Booking Bug revealed that UK banks are lagging far behind the rest of the high street in terms of delivering a consistent and value-add customer experience, and this in turn is having a real impact on the way customers view banking brands. Whereas many other sectors, such as fashion and travel, are making huge strides to utilise the data they have available to provide a coherent brand experience, both online and off, to deliver consumers relevant content, offers and suggested products in real-time, beyond app development on online banking functionality, traditional financial providers have been slower to innovate. By creating and utilising a richer, multi-faceted and more relevant pool of consumer data, it is entirely possible for banks to better predict when someone might be looking for a new student account, mortgage or loan, to deliver timely advice and product information in an authentic and helpful way; to be the caring bank for the journey ahead etc. when it’s most relevant.

Equally, being able to predict these key life moments by understanding your competitors’ customers could lead to a far higher successful switch rate by developing a bond with not the account holder, but the real person behind it. This could create that important ‘issue’ in their current supplier by emphasising the lack of understanding of their needs. All of which, will help to build the customer experience of the bank, as well as the products it offers, and set you apart from competitors by growing brand loyalty out of relevance and trust – rather than simply inertia.

What financial services brands could see by implementing this kind of data-driven,customer-first, people-based approach, is a growth in brand loyalty and increased switch rates within the marketplace. The challenge above all else for UK banks, both traditional and disruptor, will be to first accept this inertia exists and then accept that if they’re really going to be able to break it, they need to focus their efforts where and when the inertia is weakest, ensuring they both protect their own with the very best customer experience and exploit the gaps in others. To do either or both today, means being brilliant with data, and you can take that to the bank!

Global Banking & Finance Review

 

Why waste money on news and opinions when you can access them for free?

Take advantage of our newsletter subscription and stay informed on the go!


By submitting this form, you are consenting to receive marketing emails from: Global Banking & Finance Review │ Banking │ Finance │ Technology. You can revoke your consent to receive emails at any time by using the SafeUnsubscribe® link, found at the bottom of every email. Emails are serviced by Constant Contact

Recent Post