How the UK’s biggest banks are doing on AI search – and why the fintech lustre may be fading

Kantar just released its latest brand scoring report looking at retail banks. The latest ranking included a component tracking how well brands were doing on AI, with Monzo coming out on top for both humans and AI. Kantar’s Head of Customer Strategy and Insights, Peter Aitken, explains what the winners are getting right.

FSF: The latest ranking looked not only at how brands are perceived by humans but also how they show up in AI search. How do these differ?

Peter Aitken: The human scores are more driven by distinctive assets and brand clarity. The brands that perform better tend to have a higher level of emotive clarity and consistency. That makes sense – as a human you’re looking for connection points and clarity, building a mental picture: “I know what they stand for, I know what they mean, and they’re distinct from everybody else.”

The machine measurement is more fact-based – identifying product superiority, functional needs, owning an entry point. So there are two aspects to being different. One: are they different because I have a clear mental model of them and they stand out? Two: are they different because their features, benefits and offerings are simply the best – functionally superior, best digital platform, best rates? Machines look much more for the tangible, provable stuff. Both are aspects of how we calculate meaning and difference, but machines over-index on the functional, tangible side, whereas humans over-index more on the emotive aspect.

So to do well today, do you need to focus more on stating these tangible benefits?

You’ve still got to do both, because even though people use ChatGPT and Claude to do their research, they still hold a perception of the brand in their mind. On the LLM side, brands need to get better at clearly articulating the standout benefits of their offerings. But a huge amount of the content these LLMs use to draw recommendations isn’t coming from the brand’s own website – it’s coming from forums, social and so on. What smaller providers often do very well is cultivate an enthusiastic customer base willing to advocate and say: “my bank is the best because XYZ.”

So encouraging your customers to advocate for you is important – and giving them a reason to. This is where the role of customer experience becomes more important. You can’t advertise your way out of a poor experience or poor brand perceptions, because increasingly the perception is formed by what people say online. There’ll be a much greater level of substance to brand perception. So yes, brands have to better articulate what they do and what makes them stand out – but they also need significant attention to the quality of the experience, so people naturally feel inclined to advocate and talk positively.

Do companies need a Reddit strategy now?

What, for example, Octopus have done incredibly well is create a brand positioning worth talking about, and they express their uniqueness through the experience, both in novel ways and functionally. The Wheel of Fortune, for example, is a bit of a novelty, but it’s also a great way of getting consumers to submit meter readings. They’ve found ways to do things in a uniquely Octopus way that are fun, express the brand, and are genuinely valued.

Moving onto humans – what is shaping the battleground there?

In the UK we’re starting to see a shift in the impact that the high street banks are having. This may not be showing through in the BrandZ data yet, but we’re seeing growth in the demand strength of the likes of Nationwide, and increasingly Lloyds over the last year or so. And we’re seeing some of the lustre come off the fintechs – though there’s a two-tiered shift in how some of them are performing, with Monzo as a particular standout star performer.

The tension we’re seeing is a bit like Hollywood: rock stars always want to be in the movies, and movie stars always want to be rock stars. With the fintechs and the established banks, some of the fintechs are becoming much more like established high street banks – but without the high street – and the high street banks are becoming more like fintechs. We’ve seen that with Lloyds becoming “the UK’s largest fintech”, as they put it, and with Monzo’s move into mortgages. So we’re seeing a convergence of these brands.

This is exactly what we see when brands grow. Established brands need to continue to reinvent themselves and always be seen as standing out from everybody else – they need a reason to be chosen and for people to stay with them. They need to be different as well as meaningful. The smaller players trying to grow often start out by being noticeably different, offering something nobody else seems to do – Monzo and Revolut did that very well. They carve out a specific niche, but to keep growing they need to be seen as delivering on the full range of life’s needs. That’s how they go from niche player to mainstream challenger to champion.

Revolut has got its banking licence now and is talking a lot more about banking. But its positioning seems very much about parodying the bigger banks – they referenced NatWest’s “Tomorrow, Today” and the Lloyds horse. Do you think there’s scope for them to grow doing that? Can that positioning work – “we are a bank, but different”?

A brand that sets itself out with a clear, well-defined positioning that feels differentiated and unlike any other in the category really helps consumers have clarity about what that brand is and what it stands for. Advertising that explicitly mocks your competitors can work, but it needs substance behind it – there has to be something in the proposition people can point to and say, “actually, they are unlike everybody else.” So it can work as a comms thread, but it needs substance. It’s a bit too early to say whether the Revolut repositioning will be successful, but your point is spot on: they’re maturing as a bank and trying to find a way to talk about offering all the services an established player has, but doing it in a way that is unique. Comms choices aside, they’re going through a maturity and evolution process and trying to find their place.

Nationwide seems to be having some success with a similar tactic of talking about how it is not a bank but can do everything a bank can – perhaps Revolut is taking some lessons there.

Absolutely. Nationwide is one of the biggest success stories – if not the biggest – of UK banking in the last three years. Back in 2023, their perception of offering something different in the category was on the norm. We have a norm number of 100, so that translates into them being seen as unique among their established bank peers, but not particularly unique in the category as a whole. Then they went through their rebrand, and all the rebrand really did was clarify what they stand for: “a good way to bank.” Across their campaigns they reinforced that message over and over in different ways. What was clever was that each campaign pointed at a different aspect of the experience, a reason to believe, or a brand anchor – they’re different because of the branch promise, the Fairer Share payout, the scam checker, the savings watch. Each is a tangible thing they could point to that reinforces what helps them stand out. Looking at their difference score, it went from 94 in December 2022 – just below the category norm of 100 – to 141 now. That is a monumental shift. Other high street banks are doing pretty well too; Barclays has grown reasonably over that period. But the Nationwide success story is really driven by clarity in what they stand for.

From the other direction, you mentioned Lloyds and their “biggest fintech” positioning. It seems part of the same thing: distancing themselves from being a bank. Do you see it working for them?

There are a few parts to this. The number one need customers state they look for in a bank is good online and mobile banking services. Lloyds recognised that what people say they want is a great digital experience. Monzo, Revolut and Starling have owned that space very well, so when people think “my banking app’s not very good, I want one with a better one,” it puts the fintechs front of mind. So that’s an important space for Lloyds to be seen as part of.

When we ask people which brands they associate with being good online and on mobile, and you look only at customers: customers of Lloyds, compared to customers of any other bank, are more likely to say Lloyds offers good online and mobile banking services. So it’s not just marketing – Lloyds genuinely has a far superior digital banking offering compared to most, if not almost all, of their competitors.

Whether customers still see that as a differentiator and a real reason to choose a bank, I’m not sure anymore. It’s certainly a hygiene factor now – people just expect it, and they expect more innovative digital features too. What Lloyds is doing quite well is tapping into the innovator space. By calling themselves a fintech, they go beyond “we’ve got the best app” to “we’re an innovative bank, always at the cutting edge, bringing new products and services you won’t get elsewhere.” That positioning is much more effective, and “fintech bank” is a nice shortcut to that sentiment. As messaging it’s powerful and effective – they just need to keep proving it. We’ve seen their difference scores leap since they refreshed their brand just over a year ago, going from 117 to 140 from July last year to now. A decent jump, and it’s played out well for them.