Mobile Engagement

For the first time since its launch in 1989, First Direct has been displaced as the most recommended UK bank by digital-only entrant, Atom Bank.

This year, customer advocacy will become a strategic battleground for banking service providers. The Competition and Markets Authority’s (CMA) requirement for the publication of service quality metrics becomes a reality, meaning most providers will need to publish independently collated benchmark ratings.

This will allow prospective current account holders to identify how well banks are performing.  Benchmarking measures include overall service quality, online and mobile banking services, branch and overdraft services.

BDRC’S  latest survey of 15,000 consumers sees Atom edge ahead of First Direct in the Relational Net Promoter Score benchmark (RNPS). 68% of Atom customers were ‘promoters’ of the brand (rating a 9 or 10 out of 10 in terms of their likelihood to recommend the brand).

Atom launched in April 2014 and currently offers a range of savings accounts, SME lending via a mobile-only platform, and limited mortgage distribution. They have consistently appeared at the top of savings ‘best buy’ tables and claimed by December 2016 to have secured over £110m in fixed saver deposits.

Analysis of verbatim comments from the survey show that Atom’s customers:

  • Like the simplicity of the app
  • Value their account’s rate of interest
  • Appreciate the opportunity to personalise the app

Later this year, Atom plans to launch a current account and overdraft facility.  BDRC will be tracking the impact of the bank’s day-to-day banking facilities on Relational NPS, and the quality of touchpoint delivery through itsTransactional NPS benchmarks.

So, First Direct is now second, of over 30 providers, in BDRC’s league table of Relational NPS ratings. The findings indicate that their overall position, whilst still extremely strong, did soften somewhat across 2016, whilst competitors, including other challenger banks (e.g. M&S Bank and Metro) gained ground. With some exceptions, most banks and building societies generate an NPS ‘Detractor’ segment of between 1 in 4 and 1 in 3 customers, that is to say between a quarter and a third of customers would not be prepared to recommend the provider’s services. This is clearly a challenge when it comes to the looming publication of performance by the CMA.

If Banks want to achieve a strong benchmark position in the CMA’s league table, they will need to focus on the key drivers of advocacy, at both a relational and touch-point level.

Understanding Markets’ is one of the eight business challenges that we specialise in solving at BDRC.  The markets you work in are constantly evolving – new entrants, new demands from customers, changes in legislation or a product innovation can all result in exciting opportunities but also present challenges.

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