small toy car against a blurred background

What banking could learn from

Financial services firms have spent the last twenty years marketing to customers almost exclusively based on price. Our mortgage prices are lower than theirs. Our savings account could earn you more interest. This investment will give you a better return. But when the price is no longer the advantage, where does the industry turn?

This morning, like most mornings, I drove my daughter to nursery before hightailing it to the station to get the train. The advert was on the radio. You’ve seen the same campaign on TV (probably at x30 as you scan through the adverts).

The message is simple. Yes you could get more for your car if you sold it privately. But will take it off your hands and save you a more important commodity. Time.

And who doesn’t want to save time? We’re all finite. None of us will live forever. Who wants to waste time haggling over a few quid?

A decade ago this kind of marketing messaging might have seemed strange. If you couldn’t advertise that you were cheaper, you had to advertise more features, bigger benefits, more more more.

But as the millennial generation becomes the primary marketing consumer, the game is changing. The need to own more stuff is declining. Societal value is increasingly being placed, not on the things that we can afford, but the stories we can tell. The experiences we have had.

And to have great experiences, to tell interesting stories, we need time. Time to craft and create those moments.

The experience industry is already gathering pace. It goes beyond selling travel packages. It is transcending day-spas and racing track days.

You used to see car adverts about the horsepower, torque and options packages of a particular model. Now they’re about how they connect with the rest of your life (usually through WiFi).

But if everything is sold as an experience, and giving me time is more important than saving me money, how does a bank sell itself?

Sure there are still those consumers who focus solely on price. But with firms like Purple Bricks offering to sell your home without commission, the price war in financial services doesn’t look like one anybody can win.

Many financial services firms are turning to added benefits packages in their current accounts as the answer. Offers and exclusive free stuff. Even experiences.

But is this why you need a current account? Most of us would have to go out of our way to gain value from this “free” stuff. And that doesn’t exactly save me time now does it?

Credit card providers periodically offer rewards if you spend at certain retailers. You have to add it to your card first though, or you don’t get the benefit. That means I now have to spend time looking for the offers and adding them to my card. I don’t care enough to bother.

Packaged travel insurance on a current account often requires that I ring up before I travel. Why? Don’t give me the gift of admin. I’ll return it.

It’s difficult to know how the experience marketing game will play out for financial services. In hindsight, the industry may have been better playing the loyalty and service card from the beginning. A price war was only ever going to end in tears.

But we can’t rewind twenty years and change the strategy. We can’t undo the financial crisis of 2008 that undermined consumer confidence and opened a convenient door for FinTech startups to come dancing through.

What we need is a new plan. A new way of thinking. A new way to position an industry that must balance complex regulation, falling revenue margins and evolving consumer expectations.

But one thing is fairly clear in my mind. Banks have something that few can compete on. They know where you spend your money and thus, they can work out where you spend your time. And this is likely the single biggest opportunity for financial services firms.

However, it’s one that is largely untapped. That won’t last though. Firms are scrabbling against the backdrop of MIIFID II, PSD 2, GDPR and competing strategic priorities to solve the new marketing problem of the moment; personalisation.

Personalisation means different things to different people. For me, the best description is simple.

Demonstrate that you understand me. Time your messages to suit my circumstances not your business revenue targets. Give me what I want, not what you’re selling.

Know what I want before I tell you. Predict my behaviour accurately and give me real time value without me breaking stride. Don’t get in my way, get everyone else out of it.

Whilst everyone else is trying to translate their product marketing strategy into an experience one, financial services firms should be using the treasure trove of transaction data they have to predict what people need and want. And then give it to them. Simply and without additional admin.

This isn’t just a game for Banks to play, and so they better get a wriggle on. Google already knows a huge amount about us, as does Amazon and other large data-centric companies.

If they were to get their hands on detailed transaction information, it’s likely that they would be able to provide greater experience-led services than the banks themselves.

Did someone say open banking? Tick-tock.

Published by

Steven Hewlett-Light

An experienced, adaptable and creative leader with significant experience in banking across digital and project management disciplines. A proven delivery record on complex and challenging projects, a good understanding of web management, UX/UI, SEO and Copywriting. A strategist with a healthy passion for innovating new ideas and ways of working.

Leave a Reply

Your email address will not be published. Required fields are marked *