Simon Taylor, Senior Director at Yonder Consulting, explores how financial institutions can talk to customers in a more conversational way.
Interacting with your bank is not a fun activity – and let’s be honest it’s never going to be ‘fun’ – but it can definitely be a lot easier. So when it comes to how banks communicate with their customers, how do we work out what customers really want to hear?
Firstly, it’s essential to understand how consumers think about money, money issues and their lives in general. To the average consumer, ‘banking’ is less about financial jargon, interest rates and complex decisions, and more about simple and secure ways to use what they have to reach their financial goals, such as saving for a home or keeping on top of rising energy bills. Our data shows that with less than half of people (43%) believing their needs are truly understood by their financial services provider and only 51% citing their provider as transparent, the need for a shift in service provision and communication has never been more prevalent.
Most people are apathetic to an individual bank. Only 40% of people feel a sense of loyalty to their financial service provider, so long as they provide a convenient service and don’t make spending or saving a hassle. This year alone the Current Account Switching rate has gone up from 78,000 in January to 135,000 in April. This makes sense when you consider that many banks offer the similar and safe messaging which customers see as one singular voice of grey.
Given the current economic landscape, there is every reason for banks to consider how to attract customers who are no doubt looking for better services. Customers want to feel supported by their financial institutions, but no banks are standing out from the crowd currently by offering strong communication as well as tangible solutions. Currently, only 55% of customers believe that financial service providers communicate with clarity. It takes a lot to get customers to change their provider, and powerful communication and emotional connection just might make the difference.
What are the traditional banks saying?
Traditional financial institutions tend to adopt a formal and assertive tone, focusing on the importance of budgeting, saving, and financial education. They also often emphasise products over customer needs. Terms like ‘help,’ ‘control,’ ‘management,’ and ‘limits’ are commonly used along with a functional and advisory tone. Much of the language assumes a certain level of financial proficiency from the consumer.
While some customers may prefer a formal approach, others prefer a less traditional approach to money talk, feeling at ease with far less serious financial language. This might be why only around half (52%) of all customers believe financial providers hit the mark when communicating with them. The key is to know which audience you’re trying to target, why, and what language they respond best to.
So, what are the challenger banks doing differently?
The younger, more dynamic challenger banks communicate about money in a conversational, more customer-driven manner, focusing on real-life experiences and aspirations rather than just products. The language used is more relaxed, yet goal-oriented, emphasising what customers can achieve rather than just budgeting or cutting back. They are better at speaking to the evolving needs of customers in today’s complex world and are active on social media, using upbeat language and emojis to build trust, familiarity and clarity.
Both traditional and challenger approaches have their place. However, knowing what works for your audience and adapting to evolving audience expectations is crucial for all financial institutions.
I’m a customer – listen to me
However, tailoring services and messaging to customers’ needs is more complex, as often consumers wouldn’t be able to tell us exactly what they want, nor tell you what to do about it. This is why it’s so important to understand where they are in their lives, what they’re struggling with and equally what they’re striving for. This way, you’ll be able to engage with customers more empathetically and allow them to decide what you should do next.
Financial service providers need to be customer-driven, not customer-centric – led by what the public want from the start, rather than adapting services to what existing consumers suggest. It’s important to get to know your audiences as people. They are unlikely to articulate what specific product or service they need, but it’ll be far easier to discuss their budgeting struggles and goals, which could then help inform your next approach.
While this may be a time-consuming process the insights gained are invaluable, and help create a two-way approach to communications. You are the expert in financial services, they are the expert in living their own life – marrying the two together creates effective solutions to real-world problems and improves their user experience, and ultimately their life.
Financing an empathetic future
As of July 2023 “empowering customers to make good financial decisions” is now a legal requirement outlined by the Financial Conduct Authority under their new rules named “Consumer Duty”. Good communication is a core part of enabling this, not to mention a moral obligation.
Customer loyalty is the main aim of a good communications strategy, and of providing a good service – but the two go hand in hand. Standing by your customers and helping them achieve their financial goals is the best way to win this loyalty, and also a symptom of a more empathetic approach to financial services.
At the end of the day it’s their money that you’re looking after, so being ready to support them is a must.
