PayPal, GoSwiff, Zopa, Fidor – nimble digital brands are radically disrupting financial services.
While traditional banks are investing heavily in developing and promoting their own digital services, there is a need to recognise the differences in how consumers choose to use digital channels.
Alternative choices for managing money mean that retaining and rewarding customers in a way that reflects their personal preferences and motivations is vital to ensure brand loyalty.
To help understand these differences, we recently surveyed 4,400 affluent middle-class consumers in Brazil, Britain, China, India, Italy, Singapore, the United Arab Emirates and the United States.
The research identifies four global “tribes”, each showing distinct preferences in what it expects from its digital interactions.
“Prudent Planners”, those motivated primarily by family goals, continue to value face-to-face interactions, particularly in areas such as banking, where there is a shift toward online and mobile services.
“Stylish Spenders”, loyal to brands they trust, expect companies to know who they are and to offer highly tailored offers and content.
Banks should look to build services with responsive platforms, as well as applications that provide access to account details and financial planning services.
A seamless experience across digital channels is important for “Mid-life Modernists”, the most active users of smartphones, tablets, smart televisions and apps.
Our research indicates a growing trend among consumers to use mobile applications for banking services.
“Experientialists” live for the moment and expect fresh content, regular updates and unique experiences from their financial service providers.
Understanding the nuances in how consumers choose to use online channels is important, but there are some commonalities that all financial services brands should consider:
1. Personalised service
Despite significant investment from banks in digital and customer systems, 29 percent of Chinese consumers still feel that their bank does not know or understand them, and a quarter do not feel they receive a high level of personal service.
Personalised and consistent communication, rewards and service are important for the affluent middle class globally.
2. Recognition and reward
Our research found that not being rewarded for loyalty is the biggest frustration for affluent middle-class consumers, cited by two-thirds of respondents, ahead of poor interest rates and charging unnecessary fees.
Many banks offer standardised, purely transactional loyalty programs that rely on traditional points-based rewards and lack the emotional appeal to build loyalty.
3. Choice of reward is important in boosting loyalty
We are seeing companies in other sectors offer a wide range of rewards.
Some banks still tend to think of rewards that relate to other financial services or points-based programs.
Experientialists live for the moment and expect brands to offer unique experiences to maintain their interest.
Meanwhile the Prudent Planners appreciate rewards that offer longer-term gain and that can be shared with their family.
4. Simplify redemption
An effectively delivered digital experience has real potential to offer immediate rewards to valued customers, and a common perception is that many loyalty programs make redemption processes too complex.
Giving customers greater flexibility in how they access rewards will enhance the experience of a program.
5. Real-time engagement
Social media and mobile services encourage an “always-on” attitude and mean consumers continually expect fresh content from reward programs.
In return, financial service providers can track spending, understand who their best customers are and motivate behavioral change.
Customers realise value from frequent use of their bank card, and the perceived value of the loyalty program is greatly increased.
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