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The ‘banking crisis’. Since Lehman’s collapsed in September 2008 there has rarely been a day go by when that phrase hasn’t received some sort of mention in the media and helped spark a flood of negative publicity and outrage towards UK banks.
This ‘anti-bank’ sentiment has taken hold to such an extent that some commentators on the recent UK rioting and looting compared the actions of the culprits to those of the bankers and what they did to the economy. And just as the riots spread from London to other parts of the country, the negative publicity towards banks has also spread to other financial services companies.
According to the latest Lansons’ Communications Revolution annual report, 42% of UK adults say that they don’t just feel negatively towards banks, but all financial service providers – all providers have been tarred with the same brush. So how is this actually influencing consumers when it comes to making a decision about what provider to take out a product with? And are the big traditional providers particularly vulnerable?
Despite people’s dissatisfaction with traditional providers and the media’s efforts to motivate people into considering alternative options, very few people will ever actually switch from their current provider. For many it’s often the case of the better the devil you know. But in the last year some notable new entrants have joined the sector and shaken things up and this is likely to continue further.
In July last year Metro Bank opened its first store in London and became the first new UK high street bank for over 100 years. Despite consumer confidence in banks being at an all time low the launch was a huge success and generated a sense of renewed optimism in the sector as a whole. Its focus on customer service, at a time when so many consumers felt they had been failed or ignored by their banks, struck a cord with the media and tapped into what consumers really wanted from their providers.
One year on and customer service still tops consumers wish list. When asked what you would like to see happen in the banking and financial services sector 58% of respondents said better customer service and a further 49% said proof that customers come first. It’s not surprising then that the likes of Tesco, John Lewis and Sainsbury’s are all flexing their muscle in this space and gaining market share. With a loyal customer base that prioritises good customer service, these are providers that are in a strong position to continue to challenge the more established players. While there is no doubt that some of the new entrants are stealing market share – a good example being Post Office – its not all doom and gloom for the traditional players.
Although consumers like what the new brands have to offer, they still aren’t convinced that they can be trusted any more than the traditional big players. Communications Revolution’s findings show that new players all score highly when it comes to having a lot to gain and being innovative and offering value for money – much higher than the traditional players. But when asked to score companies on how well they know what they’re doing, the traditional providers scored 16% and new players 11%.On the issue of trust, established providers also did marginally better, edging ahead by one percent (12%). This is a big surprise and is an area where most people would naturally assume new players would score more highly.
In many ways new players are in a stronger position. They’re not tainted by the banking crisis and don’t have the questionable past that many of the traditional providers have. However, the findings reveal that there is a great deal of opportunity for all providers and traditional players aren’t nearly as vulnerable as you might first thing. Each side has their strengths but what is clear is that brands that invest in understanding their customer and put their needs first will be the ultimate winners.
But it’s more than this, the key to success will be those financial brands that have a strong communications programme that works across PR, advertising and customer services – brands don’t have to just do this; they have to be seen to be doing it. They need to be visible and engage with customers in a way the customer wants to be communicated with. For all players, traditional or new, this means understanding where their customers are going to for help and information.
Findings from our report suggests that P2P, including social media, is now as important for people when looking at their finances as the media and information direct from providers’ websites or other literature. In an increasingly competitive environment, understanding what influences customers and the key touchpoints has never been more important and its imperative companies to get this right now, or risk losing out in the long term.
