Banking and bad publicity have never been far removed, from
unpopular branch closures, the controversy over ‘free banking’ and
persistent coverage of unfair lending practices. However following
the seismic events of the credit crunch, the banking community has
been the subject of sustained criticism and scepticism that was
unimaginable only a few years ago.
Against this background, there has been a
worldwide questioning of the role of the banking industry and many
of its operating practices, including:
- Executive remuneration
- Excessive risk taking
- Irresponsible lending
- A lack of transparency
Governments and industry bodies worldwide have
responded to the crisis with a plethora of measures, including:
- The publication of the ‘stress test’ results
on the robustness of finances at a number of major lenders.
- Legislation on responsible lending (notably
card reform in the United States)
- In the UK a code of practice outlining how
large banks, building societies and broker dealers must ensure
their remuneration policies are consistent with effective
LONG TERM DAMAGE TO
What makes these events particularly damaging
is that while financial organisations have rarely fared well in
polls of ‘cool’ or ‘popular’ brands (although many would argue that
it is not the job of a bank to be ‘cool’, and the very nature of
much of banking is unlikely ever to create feelings of popularity)
these events, combined with a new found inability to generate trust
suggest a major struggle ahead for the banking industry.
These criticisms come at a point in time when
there have never been more well-placed competitors ready to enter
the banking space.
These range from alternative payment providers
well-placed to challenge the role of the current account. Telcos,
who within a few short years have been able to create ever deeper,
more imaginative and lifestyle friendly customer relationships
across a large range of customer segments. Supermarkets and other
established retail providers (not least the postal service) that
have already achieved brand engagement with the public and even
from consumer themselves, who are able to lend to each other via
social networking sites (although this remains a fairly limited
phenomenon). Older and established community players, namely the
wide variety of mutual players stand to gain additional
BANKING FIGHTS BACK
The good news is that as the broader economic
environment appears to have steadied and confidence slowly returns
to the world at large, now, is a brilliant opportunity for
organisations to re-engage with their customers.
This report presents the lessons that banks
need to learn and the tools at hand to engage customers and
establish an environment of trust. Modern branding emphasises the
need for creating engagement and establishing an emotional
connection in order to achieve advocacy.
Whilst the design and creative of the brand is
important, brand is more about the personality of the firm
overall.Reputation is key, formed in the mind of the consumer based
on their experience and what other people tell them about the
This is more important than any mere visual
summary of the brand. What the company actually does, i.e. service
and product quality and delivery has as much impact on brand and
reputation as any marketing communication. Therefore in re-engaging
with customers banks need not search for the ‘silver bullet’ but
need to be active in boosting their position across a number of
customer ‘touch points’ including branch, web site, and perhaps
most importantly conversations with staff.
Areas covered in this report
- Steps to creating a socially responsible
Socially responsible is no longer a term
embraced only by the peripheral, the quirky, or the strident. What
was a rather limited business niche 30 years ago, one that catered
to a small group, is now a mainstream consumer marketing approach
for products that compete head-to-head with established brands.
Companies are realising that people will pay more and engage more
with a company that is socially responsible.
This section includes coverage of: ‘green
washing’, environmentally friendly data management and how to
achieve believability and consistency with marketing messages.
- Building inclusiveness into product
Although banks use increasingly sophisticated
segmentation techniques, there is a persuasive body of evidence
indicating that the global female financial market, an increasingly
populated, dynamic and affluent one, remains massively underserved.
But unlike many industries banks (private and retail), credit card
providers and insurance companies have been very slow to
proactively target a sector that most, if only informally,
acknowledge as a rapid growth area.
In the US, however, many banks are trying to
capitalise on this market, including offering a wide range of
retail bank services with a strong gender spin. Business banking
for women is also an important element of many of the US banks’
service propositions. Issues associated with female retirement are
accorded prime importance, with many companies offering one- to-one
financial advice backed up by arrange of savings and investment
funds specifically marketed as ‘female-friendly’.
- Communicating effectively with staff
Ensuring that staff understand business goals
is the key to them in turn communicating effectively with
customers. For financial services an organisation operating
internationally, an intranet is the most cost-effective method of
cascading timely information to staff. Chapter 3 assesses the
approach taken by best practice organisation HSBC in developing a
virtual offering and how this has in turn been supplemented with
practices including town hall meetings and staff surveys.
- Improving customer engagement
The use of customer engagement, (defined as
Repeated, satisfied interactions that strengthen the emotional
connection a customer has with the brand) as a marketing metric is
enjoying considerable growth at present.
The advantage of using customer engagement as
a metric is that it is a deeper and more holistic measure than
customer satisfaction. Proponents of customer engagement maintain
that while satisfaction is the foundation and minimum requirement
for a continuing relationship with customers, engagement is the
measure of the strength of this relationship. Customers that are
merely satisfied with the service provided by their bank do not
necessarily consider that they have a strong relationship with
This section explains why financial services
organisations need to embrace engagement as a metric and the role
of on line channels in achieving this.
Section I. Product Design and Operational
Chapter 1: The Least
Chapter 2: Outsourcing versus
Rightsourcing: Case Study from Call Centre
Chapter 3: Trust and
Respect Within Financial Services Organisations
Section II. Communicating and Engaging with
Chapter 4: Web 2.0 and
Chapter 5: Customer
engagement and web 2.0 in customer service
Section III. Socially Responsible Action
Chapter 6: Socially
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