LONDON: Bank customers are mostly content with the innovations that technology and data analytics have enabled, but banks face a serious challenge in remaining relevant to their customers' lives, a leading brand consultant has warned.
Felicia Rosenzweig, Partner at brand and marketing consultancy Prophet, said that financial services firms must prioritise their connections and communications with customers if they are to survive the numerous challenges they face.
Writing in the current issue of Admap, which this month focuses on the role of effective marketing in financial services, she said many banking brands have a serious problem with relevance, which is impeding their relationship with customers.
"Relevance is the single greatest determining factor for a brand's long-term success," she said, adding that if so many customers find their own bank irrelevant – and also don't expect other banks to be any better – then there is a relevance problem for the entire industry.
To emphasise the point, she cited a study that Prophet conducted in the US in 2015. Out of more than 400 brands examined for their relevancy, not a single retail bank brand made it into the top 50.
And a follow-up study involving banks in the UK, Germany and China revealed that customers in these countries also regarded their banks to be failing on relevance.
Rosenzweig said the original study found that relevant brands have certain common characteristics, leading to four imperatives that brands need to follow in order to be relevant.
In headline terms, these include being "obsessed with your customers", or ensuring that customers feel the brand is committed to them and their needs.
"Bring innovation into every interaction" means that customers see the brand is constantly trying to engage with them in new and creative ways.
"Commit to being inspired and inspiring" will help customers to connect with a brand in more emotional ways and to develop trust over time.
Finally, "recognise and embrace pragmatic realities" means customers will recognise that a brand is consistently there for them when and where needed.
"Based on these relevance imperatives, most banks today aren't setting themselves up for success," Rosenzweig said. "While customers expect providers to deliver services that align with their needs, most banks continue to maintain a product mindset that misses much of the big picture."
However, she added, there are some examples of good practice on both sides of the Atlantic that may not "move the needle on relevance" but still represent "discrete successes".
For example, both NatWest and Barclays in the UK have been praised about their efforts in driving convenience through mobile banking, while Citi (Prestige) and Chase (Sapphire Reserve) in the US have made strong forays into the perk-driven, high-fee credit card business.
Data sourced from Admap