How the bank of tomorrow engages its customers today
A modern bank’s customer proposition depends on a data driven approach designed for early adopting, millennial professionals. That’s why such banks are so rich in apps, artificial intelligence (AI), biometrics, facial and voice recognition.
In the UK, the most modern banks of all, such as Metro, Atom and Monzo are unencumbered by legacy systems, or opening hours. Metro reports a 46% year on year rise in customers while RBS reports online and mobile transactions increased by more than 400%, with branch transactions dropping by 43% since 2010.
All well and good? Not necessarily. The problem with shrinking branch networks is that they provide correspondingly shrinking opportunities for human contact. In remaining branches, self service machines are now replacing counter staff. Upsell is limited to leaflets at the till. While the UK’s biggest four banks still manage 77% of UK current accounts, according to KPMG, a lacklustre customer experience cost them £3.7 billion between 2015 and 2018.
Empathy is future proof. Apps aren’t.
In the absence of such human interaction, tomorrow’s banks don’t rely solely on the same charmless apps used by their competitors. Customers might be enabled to open an account with no human intervention, but that does mean they want to. Customer centricity comes from acting on the data the app pulls in, rather than its ability to perform faultless transactions. That is how customer centricity provides future proof empathy, and competitive advantage. Digitised personalisation offers a wealth of new touchpoint that enable new levels of customer connectivity, but the data it delivers must be fed back to those able to intervene, collate, extrapolate and share it.
Possibly the biggest and most dynamic source of data today comes from social media. Driven by new technology and shifting demographics, it is exploding with potential and opportunity.
These are the most engaging UK banks, as measured by the frequency with which they tweet, the responsiveness they generate and the positive sentiment they receive:
Top 10 UK banks on Twitter in 2017 (by the number of tweets)
1. HSBC UK 46,325
2. TSB 36,446
3. Monzo 28,252
4. Lloyds Bank 25,264
5. Starling Bank 15,333
6. Revolut 14,139
7. Virgin Money 12,999
8. Nationwide 11,019
9. Metro Bank 9,239
10. Halifax 9,225
What works best for established banks differs from what works best for the challengers. High levels of engagement for challengers, for instance, come from people wanting to be involved in their evolution rather than from any particularly successful social strategy.
Revolut for instance, scored highly with discussion about its EU banking licence, on both Twitter and Facebook. The validation of their project prompted a wave of support from fans who wanted to recognise a key step in their development.
Monzo, Revolut and Starling in particular focus more on driving traffic to their own websites than on finding more creative ways of generating engagement. Monzo uses far less visual content than traditional banks, especially HSBC and TSB, with an emphasis on company announcements and products, balanced with a greater use of emojis. Starling engages with updates to Apps and news regarding the growth of the company.
Challenger banks put a greater emphasis on their products, but might benefit by experimenting with video and greater associations with complimentary brands with strong social skills, amplifying their social standing. That’s the favoured strategy of the traditional banks, which focus less on products and more on affiliations.
Instead of focusing more on their brand reputation and customer announcements than on product news and customer acquisition, opportunity for challengers would also come from balancing the partner strategy with greater product focus.
Traditional banks, conversely, might benefit from less of a product focus and new ways of driving interaction. Among established players, Lloyds stands out for its less “corporate” tone, veered more towards the informality of social media, though a greater use of fun/emojis would help broaden that appeal across social media’s core user group.
TSB’s Pride of Britain campaign stands out for its success across all social channels, and for sparking the highest spike in mentions among all banking brands in 2017. Their forensic focus on the campaign succeeded party thanks to a high use of visual content. TSB also led the way on Facebook, this time by securing three out of five of the top Facebook postings of any bank with their Pride campaign.
HSBC also makes much of visual content, for instance in uploading its TV ads onto social media. Their sponsorship strategy with Wimbledon and rugby and support of Dementia Week was highly effective, contributing the majority of their tweets.
Unlike other banks, Lloyds has made good use of their Twitter moments feature focusing on methods of saving money. This succeeded in:
Overall, established banks lead the way on Facebook, which differs from Twitter in several important ways. Twitter is particularly strong for live events and building momentum for viral posts thanks to the accessibility of its network. Everyone can see everything and can connect with whoever they please. Facebook, by contrast is more private and benefits from having a huge user base and relatively effective paid options for promoting content. The sponsorship strategy works well on both channels, though Facebook leads the field in its role as information source, so controversies such as surrounding fraud warnings attract significantly larger engagement here than on other social channels.
We see five key areas in which banks’ digital marketers can expect the biggest changes. In social video, Facebook is becoming a major competitor to YouTube, with new features for video creators that make it easier to be discovered. This will boost preferential Facebook News Feed exposure for original native video, drive generous revenue share deals and the eventual roll out of a dedicated video app.
At the same time, AI-powered chatbots are seizing the customer conversation. Forrester and Gartner call it Conversational UI (User Interface). Chatbots are the missing link between scalable social, lead nurturing and sales. It is still primal, but Amazon Echo/Alexa and innovations by Apple, Google and Microsoft will make an enormous difference. 2018 will be the year of the out-of-the-box Chatbot solutions.
Rich media formats (video, AR) are already enabling more immersive shopping experiences across earned, owned and paid social media, closing the gap between engagement and purchase, with calls to action that pop-up when customers scroll or tap different items in an image or video. At the same time, we see a new desire to engage. “Creators” are creating narrative based opportunities for marketers to boost retention through batched production, sponsorship and the creation of loyal communities who tune into your latest instalment every week.
This year will also bring the end to free visibility via social media as networks push brands to pay for eyeballs. Social media managers have seen this coming with Facebook in particular squeezing the reach of organic or non-paid social media content over the last year.
Finally, advocacy marketing are becoming increasingly influential in propelling brands into a new digital age by leveraging the power of online employee, partner and customer communities. Advocacy marketing will increasingly see the customer stepping into a brand advocate role with product or service reviews and recommendations that drive leads and increase sales. Brand success will come from listening to the influencers, who know their fans and their audiences better than the marketers.
For traditional and modern banks alike, the days of playing it safe on social media are over. The race is on. With digitisation becoming the norm, traditional and challenger banks can compete on equal terms, each using scientific analysis to measure the success of their interactions, ensuring that the process of digitised personalisation does not alienate more customers than it attracts.
By Richard Sunley, UK analyst, Talkwalker
Excellent. Nails it. Democratisation of finance in practise.
Much appreciated Peter, it was an interesting article to research and analyse, particularly the difference in tactics employed by the challenger banks and mainstream banks.
Highlights the fact that in the absence of communication all you have is commoditised products. At that point you are at the whim of aggregation sites. That said, social media is not the Utopian communication channel, but I agree that having a solid grasp of what it’s saying is important.