Trust, context, the story, the relationship; these and many more are the strategy picks of today’s challenger banks, and the weapons of choice in today’s battle for the high street consumer. Below Finance Monthly hears from Yelena Gaufman, strategy partner at Fold7, who explores the current banking landscape and the increasing dominance of social good.
There is an undeniable disruption currently occurring in the world of banking. Innovative and cost-effective fintech and ‘neobank’ startups such as Revolut, Monzo, Tandem, Starling and Monese, are offering a fresh spin on an old formula and winning customers across the UK and beyond as a result. These are digital-first banking brands boasting features borne from bold, utility-first strategies and, more recently, a drive towards social good, and it’s predominantly these features that have won them such good press and such good custom.
There is still a catch, though. This disruption might be well-documented, but it’s not a foregone conclusion. Even if they are the “banks of the future,” these challenger banks could still learn a thing or two from their brick’n’mortar forebears when it comes to building trust, and they should start by asking one simple question: What is it that makes a person commit to one brand over another? Something so powerful it can transcend convenience and commodity? Emotional connection.
These challenger brands might offer a convenient, forward-thinking service, and they certainly represent significant value, but they often struggle to communicate their value proposition to consumers, particularly outside their traditional audience of urbanite early adopters. They also might offer a compelling vision of a different kind of banking, but what they really need to develop if they want to sow the seeds of genuine, lasting displacement, is an emotional connection with consumers.
A foundation of trust
The most obvious hurdle facing our fresh-faced fintech brands is the legacy and authority established by the incumbents. Consumers are far more likely to place their trust in the hands of an institution with a proven history, especially when it comes to parting with their hard earned bucks.
Building trust takes time, of course. But fresh-faced fintech brands do have a pair of aces up their sleeves. They are still figuring out what they want to be, and, perhaps more pertinently, whom they want to be trusted by. The clay is still wet, and willing to be mold into a prism through which all future brand decisions can be made and understood. When building their brands, however, and forging an emotional bond with their consumer, they should take two things into serious consideration:-
- Consistency – upcoming fintech brands must find a way to rationalise their services via purpose-led initiatives, establishing exactly what the company is for, over what it can do. It must also do this in a useful and powerful way for a number of different audiences. Not just millennials who live by and for their phones.
- Authenticity – while most traditional banking brands will have effectively reverse-engineered a brand to suit the services they offer, fintechs have the flexibility to establish a brand first and then create services that reflect and empower that brand. This will help them achieve an authenticity that traditional banking brands could only dream of.
Growth, storytelling and worth
In order for new banking and fintech brands to truly demonstrate their worth, a compelling brand story and a brand purpose is an absolute necessity. It all starts with understanding the context of what you’re offering and how it plays into the lives of your intended audience. Being a feature-led, innovative company is great, but what is it that defines your work beside it being new and convenient?
Making a brand feel like it’s actually worth something is no mean feat though. One way of doing this is to underline the role that your brand’s innovations can fulfil in our daily lives, effectively tying the business and its services together with a wider sense of purpose. This is a method ably demonstrated by one of our recent campaigns for Gumtree.
Aptly titled “Turning Points,” the campaign visualises, in a very bold and unique way, how the app can help users to seize opportunity from change. We see a young couple moving through various stages of their life together, with Gumtree a facilitator of the natural changes that affect a lot of us at “that stage in our lives.” The app is used to swap a bike for a crib and then that crib for a bunk bed, before the crib is finally shown being sold on to another young couple, ready to begin their own adventure. It’s a snappy, visually striking idea that reinforces the power of using familiar emotions to bridge a brand to its potential customers.
We currently sit at an intriguing juncture in banking for both disruptors and incumbents, with the industry forcing older brands to think about how they operate and vice versa. If the startups of today can organically forge and nourish emotional relationships with their customers and build lasting legacies of their own, the banking landscape of the near future could look very different indeed.