The banking industry continues to fight to reclaim customer trust and loyalty, while adapting to the digital economy.

Victoria Kirk-Owal
Mar 20, 2017 · 4 min read

Ever since the financial crisis of 2008, banks have been falling over themselves to tell us how they’ve changed. Santander has repatriated their call centres, for example, and Lloyds underwent a rebranding to emphasise its trusted heritage. But to be relevant to the next generation of high net worth customers, banks need to offer more than just a marketing campaign or internal reshuffling. They also need to show that they can deliver new services that work for customers whose faith in banks is still weak. Now more than ever, designing the new customer experience is critical.

Trust has eroded

Most banking customers, regardless of age, have a purely functional relationship with financial institutions: we trust our banks only as far as our deposits are insured. According to Deloitte, millennials now represent more than a quarter of the population in Europe and the Americas, and they’re set to build significant wealth through individual earnings and inheritance. But they trust technology brands more than they ever trusted a bank. In fact, Apple has done such a great job marketing the idea of not having to carry cards that plenty of users are willing to overlook the (many) moments when Apple Pay still doesn’t work.

33% of millennials surveyed said that in five years, they won’t need a bank at all.

A three year study in the US suggests that banking is the sector headed for the greatest disruption, as millennials’ perceptions of value and money shift toward the intangible. Specifically, it found that:

  • The top four American banks are amongst the least loved brands in the country.
  • 70% of those surveyed said that in five years, the way we pay for things will be totally different.
  • 33% believe they won’t need a bank at all.

This indicates clearly that banks need to offer a new type of customer experience. Given how dramatically technology has reshaped the way millennials experience everything from commerce to dating, it’s worth examining the ways it could influence our relationship with money.

A new relationship with our money and financial institutions

It has never been easier to spend or transfer money across the world. PayPal set a precedent, Snapcash gamified the cash-sending experience, and WeChat lets users in China pay for anything from a coffee to their rent with a simple chat message. Masterpass, MasterCard’s digital payment service, has integrated payment capability into Turkish brand Getir’s Facebook Messenger chatbot.

ATOM, a new UK banking concept, is an app aimed at millennials. Taking cues from gaming and social sharing, it takes fun behaviours and makes them functional, letting users sign in with a selfie, for example, and using voice recognition to access information. It’s a nascent concept, but it signals more of what’s to come.

How long before we simply ask Alexa or Google Assistant what our balance is?

It’s not hard to imagine a near future where we can access, move, spend, save and invest our money through a series of light touch interactions that remove friction and replace it with fun and satisfaction. As AI and digital assistants become truly useful, how long before we simply ask Alexa or Google Assistant what our balance is or when our next bill payment is due?

But we can only interact this casually with our money as long as we have trust. We need to believe that our banks’ institutional infrastructure can respond to our needs and keep our money secure — a step beyond basic deposit insurance. This is where new banking models come into play.

Towards new banking models

Several new banking start-ups have distinguished themselves over the past few years by actively listening to their customers, and creating new products and services tailored to their needs. Most aren’t even trying to compete with full service banks.

Simple, for example, is a US-based bank alternative that offers just one type of account, and a suite of app-based tools to help you stay on top of your money. Monzo is a UK app-based service that helps you manage your balance, budget and use contactless spending. Plum is a service that analyses your income and spending patterns, then calculates a comfortable amount to save, without you lifting a finger. All of these services make a point of keeping customers informed of new offerings as they evolve, imparting a sense of shared evolution and growth.

By creating a continuous feedback loop between the brand, the products and their customers, these new banking services are more transparent and available to their customer than ever before. This opens up a world of positive consumer advocacy and loyalty that stems from a genuine sense of brand ownership.

All of this creates a real opportunity for banks to reclaim customers’ lost trust, by co-creating products and services to take care of customers in new channels. It’s one way — and perhaps the banking sector’s best chance — to stay in step with the digital economy, before they lose those valuable relationships entirely.

An earlier version of this article was published at The Drum on March 20, 2017.

Protagonist Studio

Good story makes good strategy.

Victoria Kirk-Owal

Written by

Global Design Strategist. Big fan of appropriate technology. Native New Yorker. Formerly @isobar_uk, @OgilvyUK, @OgilvyLabs, Industrial Design @Pratt Institute.

Protagonist Studio

Good story makes good strategy.

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