Published : 8 years ago, on 05/10/2016

By Patrick Baglee, Executive Creative Director at Start Group

As traditional banks consider their role in a world where fintech businesses are commanding a greater share of trust and brand equity with an app savvy generation, it is more critical than ever that banks understand the crucial difference between ‘doing banking’ and ‘going banking’and are able to deliver a customer experience to match.

In order to stay competitive and counter the risk proposed by challenger brands, traditional banks and financial institutions need to focus on the following trends over the coming months and years.

1. ‘Going’ banking is different to ‘doing’ banking
   In banking, the tension between highstreet and hi-tech has never been more profound. As branch visits decline and trust in banking by app and mobile continues to grow, banks have to take some fundamental decisions if they are to protect the value they’ve built in their brand and their customer base. The challenge for banks,is to recognise and respond to the difference between ‘going’ and ‘doing’- in the context of their operationsand purpose. ‘Going’ is about a commitment of time to an experience because it will give you something back, where a brand is built by connection. ‘Doing’ is the action-oriented, app-centric, convenience driven world of interactions, where a brand is built by functionality and utility.They are two quite different things, but banks need to be able to deliver against both in the context of new customer expectations.

2. Banks need purpose to differentiate
   Banks now operate in a market where differentiation is nuanced. Rates and product offerings are so similar, banks have to work especially hard to stay relevant. The opportunity is to embed brand values and purpose,and demonstrate them through action, so that behaviours become the true and most meaningful and memorable differentiators. After the Libor scandal, Barclays set about embedding a set of values that determined not only how it engaged with customers but – crucially – how it measured the actions of, and rewarded, its people. By behaving against these new values Barclays emerged from the crisis with a renewed sense of purpose and able to better define what it does and make a positive impact.

3. Banks just aren’t what they used to be
   The majority of financial institutions can be broken down into a set of offers and interactions; they are no longer a single digital or physical portal but a provider of a family of mono-branded action-oriented products. But how often do banks consider each individual element’s desirability and effectiveness and how each might exist and survive as a standalone?Today, time poor, tech savvy people are rarely prepared to ‘go’ anywhere to sit, and wait. They ‘do’. They are action focused, empowered by technology.
   We’re approaching a moment where people see financial institutions as a series of applications, assessing products in terms of effectiveness, efficiency, user-centricity and not particularly requiring that they all come from the same provider. A re-statement of the purpose of branches is critical, and a particle level assessment of moments of financial need will mean products developed around customer requirements not technical opportunism.

4. Build your purpose
   Purpose gives people permission to do things in certain ways and be clear about the things that no longer matter. Today, purpose in the context of banks is absolutely crucial. Purpose takes the overall intent of an institution (including fintechs and bricks and mortar banks) and helps guide how purpose comes to life through every experience they create.

5. From intent to impact
   Experiences are crucial to brand building across the financial services sector, helping people manage their financial transactions by creating greater visibility of their total financial landscape. If people borrow and pay back on time, how can this impact their future rates? If people are drawing down from their bank account and using money for certain things on a regular basis, how can the service adapt or respond to it to make money management smarter?Financial behaviour outside banking needs to help influence the development of products, the utility of services, and the cost of borrowing.

6. Make life admin easy
   People are managing their lives from a single device and able to check their financial status more frequently than ever. So whether it’s pay, rent, invoicing, cinema tickets or council tax – everything can be done, from one device, any time. So the place where life-admin gets done is no longer formal (it’s mainly the sofa), nor is the time the admin is done. The root of the financial actions may not have changed but banks need to understand their place within everyday life and that devices are at the centre of people’s lives.

7. Give back with big data
   It’s implicit that the ripple effect of our activity, via our device or channel of choice, should also result in reciprocal rewards for loyalty,for products holdings, for the value of our transactions and for the channel we choose to use(and the cost savings this returns to providers). More importantly, rewards should be dynamic and determined as close to real time as its possible to deliver.

Moving forward

Just like retailers must start thinking of themselves more as technology businesses as opposed to places that simply stock-and-sell, banks must begin acting more like places that people want to visit, not just need to visit whether that visit takes place by app, by browser or by branch. Banking that moves at the speed of life is what customers expect and banks need to provide, not just via technology but through the people that deliver the services and who live a brand’s purpose through action every day.