Chloe Woolger, Commercial Director for Customer Experience, Kantar UK, discusses why delivering a strong customer experience, particularly aimed at younger generations of consumers, that aligns with a meaningful brand promise has never been more important for retails banks.
Millennials are often regarded as today’s trailblazers; however, many are now further down the line in terms of relationships, property ownership and career development. The next generation of customers – the centennials, are now just starting their financial journey.
Centennials are already eclipsing millennials in terms of driving trends and will soon represent an influential consumer group across multiple retail categories, including financial services. Often defined by their vigilance, resourcefulness and openness, this emerging young group of consumers are tech-savvy and connected like no other generation before them.
This younger group of consumers value both convenience and anonymity and are prepared to pay a premium for brands that can win their trust. This is also true of the financial companies they choose to bank with. They are looking for strong customer experience, seamless access across multiple channels and banks that are actively engaged with their social purpose agenda.
Recent research from Kantar revealed that over three-quarters of consumers (77%) said that in the last 12 months, they had switched, avoided or boycotted buying certain products or services, or might consider doing so in the future, based on their view of a brand’s social and environmental credentials. Brand loyalty was lowest among the youngest cohort with 87% of 16-24-year-olds saying that had switched buying certain products. Younger generations appear more alert to injustices within society and issues impacting the environment and so financial services need to be alert and ready to respond appropriately to this growing shift in ‘woke’ consumer attitudes.
It’s important that traditional banks understand that what has sustained them in the past, is unlikely to maintain their future growth. According to Kantar’s CX+ UK Retail Banking Report customers now expect empathy and support as well as receiving a great experience whether they are banking online, on their mobile or in a branch; the better the experience the more value a brand can command.
Government intervention and technological advances have created a more competitive market; one in which non-traditional challenger banks, such as Monzo and Starling, are attracting younger generations of customers with very different needs and expectations.
Disruption has become the new normal for the financial services sector as unprecedented numbers of customers continue to switch bank accounts or open additional, mobile-only, accounts.
Around 23% of people in the UK claimed to have taken out a second account in the last three years, rising to 47% of 25-34-year olds according to Kantar. Millennials now hold almost two accounts each on average, meaning that many of them will hold three or even four different accounts. Saving for big-ticket items such as a holiday, paying bills or simply spreading money across different banks are reasons why ‘jam-jarring’ has become the norm for younger customers.
While challenger banks and out-of-category brands, such as Amazon, are redefining what great experience looks like, established banks ignore the signs at their peril. Kantar’s CX leaders – First Direct and Nationwide – and the disruptive fintechs are winning the battle for attention because they are taking purposeful action to ensure they consistently do things that aim to improve customers’ lives and allow them to feel more in control of their finances.
For example, Monzo’s ‘No barriers to banking’ approach makes it easier for customers to open accounts regardless of their circumstances or background and Starling has partnered with the UK’s extensive Post Office network to allow customers to deposit funds.
Make or break with CX
To maintain and improve great customer experience, banks should think about:
Mobile first, but not mobile only. Delivery of a seamless cross-channel experience that resonates with all customers. That experience must align with its brand purpose that feels real and human to people.
Innovation. When it comes to ensuring continued innovation, banks are no exception. Barriers to entry are continually falling and those that aren’t disruptors in this space will themselves be disrupted. Banks should look beyond traditional products and services and reframe how they think about innovation.
Empathising with how customers’ lives are evolving will win trust and brand loyalty. Banks need to play to their strengths while allowing other businesses to play their part in helping to delight customers. Banks should establish partnerships to create a broader ecosystem that extends beyond their own organisation.
Empowerment. Providing employees with a clear explanation of what a bank’s brand promise means will help break down internal silos and avoid undermining the brand from within. This is where genuine empathy and clear differentiation can be expressed and help deliver on that all-important customer experience.
Putting the customer first by focusing on customer experience is what makes or breaks a brand.