Guest Blogger

By Chloe Woolger, Commercial Director for Customer Experience, Kantar UK

Chloe Woolger explains the importance of why delivering a strong customer experience that aligns with a clear and purposeful brand promise has never been more important for retails banks.

According to Kantar’s CX+ UK Retail Banking Report, traditional banks need to accept that what has sustained them in the past, is unlikely to maintain their future growth. It’s no longer enough to provide good products or services. Customers now expect empathy and support as well as receiving 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 advances in technology have led to a more competitive market; one in which non-traditional challenger banks are attracting younger generations of customers who, in this digital age, have very different needs and expectations.

Riding the wave of technology

CACI’s 2019 ‘The Growth of Digital Banking Report’ finds that for the first time, more people in the UK are managing their bank accounts through mobile apps than internet banking, with around 25 million customers banking on mobile.

Given the continued and growing success of mobile-only banks, such as Monzo and Starling, this trend will continue with mobile banking set to become the biggest channel in terms of users by 2021, overtaking customers using traditional high street branches.

Established retail banks must keep up with the tidal wave of technological advances to attract and retain younger generations of new customers. Millennials and younger centennials bring with them demanding expectations for mobile-first products and seek exceptional customer service.

Switching up

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, particularly by younger generations of ‘multi-banking’ customers.

According to data, more than six million accounts have been switched since the service was set up in 2013. Kantar’s omnibus survey revealed levels of switching had shot up to 21% in the last three years to July 2019. Of these, 45% were millennials.

Trends in current account holdings over the last three years reveal significant change. Kantar research revealed that 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. Millennials now hold almost two accounts each on average, meaning that many of them will hold three or even four different accounts.

The emergence of digital-first banks and the ease of which accounts can now be opened allow customers to manage their money more easily in separate pots, something that has long been a consumer need. 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 a reality for many customers.


The generation game

Kantar’s research reveals millennials are more concerned about their financial situation compared to older generations. They feel less in control of their future and have very different expectations of businesses.

Perhaps more worryingly for many businesses is that over three-quarters of consumers (77%) said that in the last 12 months, they had switched, avoided or boycotted buying certain products, or might consider doing so in the future, based on their view of a brand’s sustainability, diversity and environmental policies. Brand loyalty was lowest among the youngest cohort with 87% of 16-24-year-olds saying that had switched buying certain products. Woke consumerism is a trend impacting many industry sectors and financial services need to be alert and ready to respond appropriately to this growing shift in consumer attitudes.

Millennials are often singled out as today’s game changers and trendsetters, however many are now married, mortgaged and are progressing far into their careers. The next generation of customers – the centennials are now coming of age and are at the start of their financial journey.

Centennials are already eclipsing millennials as the global cohort that are driving trends and will soon represent an important and influential consumer group across multiple retail categories, including financial services.

This group can be defined by certain values including vigilance, resourcefulness, openness and are tech-savvy and connected like no other generation before them. Centennials 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 banks they choose to do business with. They are looking for strong customer experience with seamless access across multiple channels from banks that don’t just pay lip service to their social purpose agenda but are actively engaged with it.

Kantar’s retail banking customer experience (CX) index warns that 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. Many traditional banks say that they want people to be better off but Kantar’s CX leaders – First Direct, 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.

Examples of how some challenger banks are winning new customers and providing greater convenience include Monzo’s ‘No barriers to banking’ approach which makes it easier for customers, such as immigrants and those with no fixed abode, to open an account. Monzo believes nobody should be denied access to banking because of their circumstances or background. Monzo also promotes online communities by encouraging customers to share their progress with other savers using Facebook. Starling also offers a more omnichannel customer experience having recently enabled customers to deposit money into their accounts from the large network of post offices throughout the UK.

Make or break with CX

To remain successful in this disruptive world of financial services, banks need to pay attention to how existing and potential customers experience them. For example, they should think about:

Mobile first, but not mobile only. There’s clearly still a role for physical branches and other channels however banks must endeavour to deliver 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. Every business needs to keep innovating and banks are no exception. Barriers to entry are continually falling and those that aren’t disruptors in this space will themselves be disrupted.

Reframe how they think about innovation and look beyond traditional products and services. Empathising with how customers’ lives and expectations are evolving will win trust and brand loyalty. Adding value may involve partnering in order to deliver a broader ecosystem of partnerships that extend beyond the organisation. Banks need to play to their strengths and allow other businesses to play their part in helping to delight customers.

Finally, empowering employees with a clear explanation of what a bank’s brand promise truly 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.

The imperative for retail banks is as simple and as difficult as one clarifying idea – put the customer first by focusing on the customer experience. This is after all what makes or breaks a brand.


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