“Disruption” is so in right now. Every daring company is looking to shake up the status quo of their respective industries. The more staid, the riper for disrupting. So, could banking be next?
It certainly looks like it.
Banking facing 'Uber moment', says former Barclays boss https://t.co/KBKTqY11TN
— Starling Bank (@StarlingBank) November 29, 2015
Customers expect more, faster
The numbers just don’t lie: customers are ready for a disruption in banking. According to the Millennial Disruption Index, banking is the number one industry most poised for it, and 71% of millennials would rather go to the dentist than listen to what banks are saying to them, at them, and about them.
And this time, customers are in control. Given a full 33% are totally open to the idea of changing banks in the next 90 days, banks need to start catering to their customers and quickly. That’s why customers (and serving them) are the primary focus of the most successful new banks.
So how do they do just that, and what can others learn from it?
1. Involve customers from the beginning
New, disruptive banks are not relying upon prestige of name or age of institution to attract customers, unlike many of their brick-and-mortar competitors. They win business by offering a superior product. And by being confident in the superiority of that product.
Digital challenger bank Mondo raised £1 million in 1 minute 36 seconds in their latest crowdfunding campaign. 1,898 people invested an average of £527 each and will share 3.33% equity in the soon-to-be bank. Those are 1,898 new customers who like the product, think it’s better than what’s out there already and it’s in their interests to tell others about it too.
1 minute, 36 seconds – the fastest @Crowdcube round ever! Thank you everyone 😀
— Monzo (@monzo) March 3, 2016
2. Make sure your service is easy to use
According to Digital Marketing Magazine, new banks are spending seed money not just on the banking aspects of their service, but on ensuring best-of-breed user interfaces for their apps themselves. It’s not enough to offer financial advice any longer; your app must be easy-to-use, and user-friendly. New bank Tandem has made sure ease and efficiency are part of its messaging.
Getting services from your bank should be a one tap/click experience @rickykno @tandembank #FB2015 @techUK @InnFin pic.twitter.com/kRHYOOsxZX
— Julia Morrongiello (@JuliaMorrongiel) December 3, 2015
Customer loyalty among millennials is reserved for the company that best answers their needs, even in banking. For example, 47% of millennials who changed banks in 2015 did so simply because they wanted mobile banking, according to Business Insider. They want a bank that is constantly improving tech to make their lives easier. Again Mondo is showing on its social-media that it’s at the cutting edge of FinTech.
The next Mondo hackathon will be 16th-17th April! 💥🚀📢 Sign up now (if you can definitely come): https://t.co/euwZDE3Ygx #mondohack
— Monzo (@monzo) March 7, 2016
3. Educate your customers
James Haycock, Managing Director at Adaptive Lab, goes a step further regarding the extent of bank-and-customer synergy.
“There’s some smart propositions around ‘un-banks’ regarding things that can help people live a better life by doing things for them. Banks can help people adopt [financial] behaviours in a better way, help you manage things better,” Haycock says. It’s the business of people power, and the timing is perfect.
Nutmeg, the online investment service, has an extremely popular explainer channel on YouTube to help millennials start saving with ISAs and preparing for their pensions. And apparently, looking at the number of views Nutmeg’s videos are getting, younger customers do want to start thinking about those kind of things.
4. Show your customers you care
Of course, involving customers and making sure they know you are listening to their concerns is key to showing that you care. But millennials also want banks who care about the wider world too; particularly after the recent banking scandals which severely damaged people’s trust in these institutions.
Again, Atom Bank has made this a priority. Even thought the company is still establishing itself, its staff and directors still have time to give a little back to the community. They took part in CEO Sleepout, a business event aiming to fight homelessness and relieve poverty… And then made sure their customers knew about it.
Getting the sleeping bags ready! @CEOSleepOutUK @atom_bank @NU_Foundation pic.twitter.com/5bTMvP1iEA
— Maria Harris (@MariacatHarris) March 3, 2016
5. Talk to your customers in their language
You can probably tell from the Tweets above that the Mondo social media team is certainly fond of an emoji. Other challenger banks are also talking to their customers in a more informal way.
They also strive to show that their staff share the same lifestyles as their customers. Starling Bank wants to show its customers that its staff is not made up of middle-aged men in suits. As the Co-Founder and CTO of Starling Tweeted, the bank’s hiring and it’s looking for diversity.
Cv's from ALL great people please @StarlingBank #fintech https://t.co/teOOoex7SQ
— Mark Hipperson (@markhippo) February 2, 2016
Atom Bank’s social media managers are experts at making their employees seem more relatable, and therefore more trustworthy. Part of giving the bank a personality, is showcasing the people behind the brand.
Blood sweat and tears shed, the room divided, only 2 left standing. It's the Atom Rock, Paper, Scissors Final. pic.twitter.com/MaImAFeY7o
— Atom bank (@atom_bank) March 4, 2016
Indeed, it all comes back to the customers and talking to them in a way they’ll understand. It’s about showing that the people talking to them are people just like them and understand their concerns intimately. If new banks can keep their customer-centric focus and showcase their personality, they just might make it long enough to become the old banks, themselves.