Consumer finance is an industry that hasn’t always gained momentous interest or praise from the public. This is particularly true of so-called digital natives, who in a 2013 study by YouGov expressed a desire to see banks make actions such as switching accounts more easy and accessible. Amongst the debates on capping bankers’ salaries and making mortgages easier to purchase for aspirational home buyers, the state of public trust in the banking system was up in the air, with many young people implying that the general consensus was that financial companies simply don’t understand their wants or needs and that banking is largely something that happens behind the scenes of brick and mortar branches.
In the four years since the YouGov study aired, the consumer finance industry has changed significantly to connect with digital-savvy consumers. Dubbed “the year of the mobile banking app”, 2016, in particular, saw banking progress leaps and bounds in respect of bridging a relationship with digital-focused consumers, who craved a more streamlined and reachable banking service right at their fingertips. In the present day, it isn’t just “young people” jumping on the bandwagon of online banking, with Lloyds Bank reporting 1.1 million more people in the U.K. now have basic digital skills, with the greatest improvement being amongst the over 65s demographic.
As a whole, Britons are more digital-savvy than ever, with payments via apps rocketing 54% in 2015 alone and social media playing an imperative role into shaping financial services online, largely owed to its real-time customer service benefits. Standard Bank – one of South Africa’s largest financial services groups – has revealed how a complete digital overhaul of its banking offerings has drastically improved customer delivery and internal processes, and it’s not the only one.
Pitching a complete u-turn in your business’ marketing and communication strategy requires clear deliverables and benefits to the business as a whole. The truth is, British banking has been highly consolidated since the early 20th century, and unlike some other major economies, the U.K. does not have a major stratum of independent local banks. As a result, connecting with digital-savvy consumers through experimental apps and social media strategies can be extremely costly, risky and have a high implementation time-frame. Nonetheless, owning digital-savvy customers has a number of benefits for financial brands, including:
Increased consumer trust and loyalty
It’s a simple rule of business that you earn loyalty off otherwise promiscuous shoppers by offering an experience a cut above the rest. By exploring what mobile banking customers actually want, the finance industry can deliver seemingly tailor-made solutions to its diverse customer base. For instance, a smartphone app to connect the younger demographic with the ability to easily pay their contacts and friends, an online browser that offers a sturdy security element but easier log-in service through two-factor authentication or biometrics or a public, online support mechanism for one-click support requests.
By offering a number of digital solutions to consumers, loyalty and trust strengthen between business and consumer. The feeling of “my bank listens to me, and is forward-thinking in its digital products” is what keeps customers dedicated to one business, and furthermore improves the chance of recommendations. By harnessing more trust from your clients, there is a better opportunity to leverage more information and data than ever from the consumer. For example, if you provide a sturdy and reliable banking application, your consumer is more likely to trust you when prompted to enter further details to sign-up for a mailing list or fill out a survey review – as they know you’re competent and committed to delivering the best experience for them as a customer. In consumer finance, knowledge is certainly power, and this is achieved through committed loyalty and trust from consumers.
Improved customer satisfaction
In regards to digital-savvy consumers, there is a huge likelihood that these customers have a presence on social media. But what does this mean for banks? From a customer service perspective, consumer finance is the industry that receives one of the highest inbound amount of customer service enquiries. When you’re dealing with people’s assets, this doesn’t come as a surprise.
Running an entire customer service call centre comes with huge overhead costs, from phone or VOIP billing, right down to the manpower behind it. However, with more people than ever turning to social media as a means of customer service, and with digital-savvy consumers already existing and comfortable with sites like Twitter, banks have an ample opportunity to offer real-time customer solutions from the comfort of a computer or smartphone device.
By offering dedicated customer service accounts on social media – as U.K. bank NatWest has done – financial companies can provide quicker, more efficient responses to inbound customer enquiries, whilst also saving the customer money (eliminating the need to call paid-for numbers) and saving the business money (by reducing pressure on high-cost call centres).
Opportunities for education, direct dialogue and skills
To achieve customer satisfaction, trust and loyalty as previously discussed, it’s important for consumer finance brands to appear human. An industry that was previously incredibly sterile, clinical and almost uninviting and intimidating to first-time customers, banking need to make an example of its digital-savvy customers to pave the way for future customers. A recommendation for Lloyds Bank, that appears in its 2017 digital index, is broadening digital conversation and supporting digital skills, from the inside out.
A quote from Helen Milner, CEO of Good Things Foundation, reads:
“While it’s encouraging to see the numbers of those who have never been online, or who are lacking the five basic digital skills, have decreased since the 2016 Index, there are still a huge number of people who continue to be digitally excluded. People without digital skills are likely to be the most excluded, to be living in poverty, and to have little financial security. It’s clear that they have a significant amount to gain from improving their digital skills, and accessing both financial savings and tools online.”
By trialling and offering digital solutions and products to an audience that is already digital and tech-savvy, banks can record and monitor tangible results and feedback to help aid education, dialogue and skills training for a broader market that may have not yet been exposed to the potentials and offerings of digital banking and finance means.
Essentially, digital-savvy consumers can play a pivotal role in shaping the future strategy, customer base and products of a finance brand – all by simply acting as an engaged customer.
What do you think digitally savvy consumers can offer to finance brands in terms of developments and customer wins? Tweet @mporiumgroup to start the discussion.