By Gurpreet Purewal, Associate Vice President Thought Leadership, iResearch Services
The pandemic has changed the face of financial services and banking, especially in the short-term. Financial service organisations have had no choice but to accelerate their digital service offerings to cater to the older generation of customers who found themselves unable to enter a physical store because they fell into the high-risk category of Covid-19.
However, through the many trials and tribulations of an unprecedented year, financial service providers and banks have emerged stronger with an increase in consumer sentiment, often being praised for their efficiency and understanding of many Covid related issues.
In January 2021 iResearch conducted a survey into how banks and FS firms should look forward to a post-Covid world and develop upon goodwill to create a trusting, transparent and technology-focused strategy, improving communication with customers and increasing market share. Over 1,000 consumers were polled as part of the nationwide survey.
As the vaccination programme is now well into its tens of millions, and the UK moves along the government’s lockdown exit roadmap, what will financial services of the future look like? Have the digital advances of 2020 changed how banks and FS firms communicate with customers, forever more?
How to get digital transformation right
To demonstrate the scale of the opportunity for firms that ‘get digital right’, there are now more people than ever accessing their services through online channels. For example, research found that more than 90% of people aged over 60 have used online banking for the first time during the Covid-19 pandemic. In comparison, 17% of people aged under 30 said they were accessing services via an app or web browser for the first time. A real life example of this is how you can now sign loan agreements and other financial documents online or through a mobile app, significantly speeding up the process and more flexibility for customers.
More than half (54%) of respondents said they are less likely to attend a physical branch after the pandemic. This demonstrates a seismic shift in the way people will access banking services now and into the future.
But with lockdowns and branch closures, are these new digital customers doing so willingly, or because they have no choice? The results show us that banks must work harder to earn the trust of older customers who are less familiar with online services. The overwhelming majority (97%) of 18–24-year-olds said they trust their bank with their data, compared to only 33% of people aged over 66.
Capitalising on goodwill
Almost two-thirds (63%) of respondents said their bank acted in their best interests during the pandemic, but a third said they would consider switching their bank for better, more personalised communication.
Asked how financial service organisations can improve their communication with customers, ‘connecting on a personal level’ ranked highest, followed by ‘more honest and open dialogue’, a ‘demonstration of how they are helping customers’, ‘more creative campaigns’, ‘consistent messaging across channels’ and finally ‘responsiveness to major events’.
Before the Covid-19 pandemic, it may have been difficult for banks with hundreds of thousands of customers to achieve personalised communication, yet the globe has, for the last 12 months, been going through a shared experience. According to research from Motista, consumers that have made an emotional connection with a brand will be more loyal than those that did not, staying as repeat customers for on average 5.1 years versus 3.4 years. They will also recommend and refer brands to their friends and family 20% more times than those that did not make that connection.
Therefore, the need to develop tailored communications, driven by purpose and meaning, are demanded by customers and must be front of mind for communications strategies going forward.
While banks have spent huge time, money and resource in bolstering their digital estates, it is clear that communication – that often intangible yet entirely controllable factor – can be the difference between success and failure in the post-Covid world.
The results clearly demonstrate the lasting impact of Coronavirus on how people will access banking services from now on. As a consequence, financial service firms will be required to refocus on really understanding customer needs in order to engage with the different requirements of each individual customer. The good news is that banks and financial services have the tools at their disposal to create campaigns driven by genuine industry insight to win the hearts and minds of customers.
Many of the effects of the past year continue to be felt and as we emerge from the rubble of 2020, a continuation of support is essential. Retail banking may have been changed by the pandemic in its functionality but perhaps the banking and financial service sector’s real differentiator can be seen in its customer interaction. Meaningful, empathetic communication and leveraging digital to better understand customer’s needs, has never been so important.
