Close your eyes and picture an incumbent financial institution’s commercial. You probably see images of exotic travel locales, or trustworthy men in skyscrapers, or Jennifer Garner. What you probably don’t see is much information about what actually separates this bank’s value prop from the rest.
Araminta Roberston is a writer and content strategist at Mint Studios who helps Fintech companies from all around the world use content marketing to create a community, build trust, and acquire quality customers. While the incumbent banks spend billions of dollars annually on commercials and messaging, Robertson thinks there’s a way to be leaner and more effective in communication. She believes Fintech’s great advantage is its customer-centric approach and ability to adapt on the fly, but she also thinks the way Fintechs speak to customers can differentiate them from the incumbents.
At Unifimoney, we believe delivering value for money is a better strategy than spending a fortune on a celebrity spokesperson. Unsurprisingly, Robertson agrees.
Unifimoney: In doing research, we’ve been shocked to find how much the big banks spend on advertising each year. What do the incumbents get wrong in the way they communicate with customers?
Araminta Robertson: I think we can all agree that the main issue is they’re not customer-centric. The customer is kind of an afterthought — increasing the share price of the bank is their main priority. And this obviously is a huge issue because the customer eventually just loses trust and has a bad relationship with a bank. There was this really funny quote somewhere that said that people would rather go to the dentist than to the bank. That’s how much they hate their banks.
Banks’ communication is full of jargon. It lacks personality. They’re a big business — they’re not really human. It doesn’t feel real.
The incumbents prioritize individual sales when really we’re moving towards an era when the market is asking for lifetime value. The future is a company that you trust — a brand that you love — and that you continue using for several years or maybe your entire life. And with data analytics and with personalization, that’s what companies can do now.
But if big banks or incumbents don’t prioritize the customer, are not customer-centric, then customers are just another number on the balance sheet and what’s gonna happen is that customers are just gonna move towards payment or banking solutions that really meet their needs.
What people say usually is: the incumbents are not gonna die, they’re just gonna be acquired by those who decide to change their value proposition and the way they work with their customers.
Unifimoney: Are there any incumbent financial institutions that have impressed you with their advertising/messaging?
Robertson: Oof, that’s a difficult one. So, if we’re going to take some examples of incumbents that are taking digital seriously, we’ve got BBVA, we’ve got DBS in Singapore, we’ve got JPMorgan Chase in the US, and we’ve got China Merchants Bank. What these incumbents are doing differently is that they realized that we have to take this tech thing seriously: we need to actually move our entire infrastructure to the cloud and we actually do need to be customer-centric. Some of them are doing this quite well.
A really recent example would be CaixaBank in Spain that is a rare example of an incumbent creating a spinoff that worked. So, you obviously know the story of JPMorgan Chase with Fin, which was a bit of a fail after a year. Well, CaixaBank in Spain has their own spinoff called imaginBank and imaginBank has a free co-working space and they prioritize email registration rather than bank accounts and they try to attract you through that. So, you asked for specific communication. I would say, any incumbents that are really showing that they are changing their attitude, so that could be by hosting events or it could be by just offering a much more intuitive bank app, which is rare these days. Or just using their marketing to be a bit different than the rest of the incumbents.
There are plenty of Fintechs using marketing and communications to do really cool things and obviously incumbents can and should learn from that.
Unifimoney: What are some key ways for Fintechs to communicate differently with their customers?
Robertson: I always say that there are three main pillars to Fintech communication: there’s education, there’s trust and there’s customer experience. Education, because finance is traditionally an industry that’s full of jargon and complicated topics. Big incumbents used to take advantage of that and they would charge all these high fees and use weird words so that, in the end, you were the one losing out. But Fintechs can take advantage of education and now actually take up the role of being an educator.
And then trust. Once again, banks and financial institutions don’t have really great reputations and so Fintechs have bigger hurdles to overcome in order to be trusted. Because of that, it’s important for Fintechs to be really transparent.
And finally, customer experience. As we know, for the big incumbents, customer experience is not really a priority for them. By offering a much better customer experience, Fintechs can attract customers. Nowadays, customers expect the same standards set by Apple and Google and Uber, and so Fintechs can take advantage of that and offer a similar experience.
Unifimoney: Which Fintechs are doing the best job right now with communication?
Robertson: So many! I love the Fintech industry for this reason really.
My favorite marketing strategy when it comes to transparency is owning your mistakes or owning your weaknesses. Some Fintechs do this really well. For example, if you want to send money abroad, Transferwise will actually show the cheaper option even when it’s not them and a lot of customers have said that this actually makes them trust Transferwise more because they’re actually owning their weaknesses.
Another of my favorites is Starling Bank, which is a neobank I use in the UK. They made a small mistake in my account and I was like, ‘Whatever.’ I didn’t really think too much about it. But then, a week later, in the mail, I received this huge hamper and it had lemonade and a cake and crackers and cheese, and I was like, ‘Wow, that’s crazy!’ And I loved it. And obviously that made me a huge fan. They turned that small mistake into a win.
An incumbent would never do that! Whenever they make a mistake, they just hide in embarrassment and pretend it didn’t happen. Fintech is completely different.
I’m also a big fan of the financial education side of it and I love seeing how Fintechs come up with new creative ways of educating their users every month and every year. My favorite is Zopa, it’s a peer-to-peer lending company in the UK. Their Instagram is so cute — just little animated designs — and it talks about basic concepts like compound interest and investing in a really easy and consumable way. Small things like that.
A great US example is Robinhood’s podcast. I think that’s really a very unique way to reach out to customers, and it’s a great way to actually build trust with customers and add value at the same time.
Unifimoney: In economic downturns, consumers tend to retreat back to bigger, safer traditional financial institutions. How can Fintech build that trust factor for their consumers?
Robertson: That’s the question of the decade when it comes to neobanks.
The thing is, finances are different than ordering food or your Facebook post or something like that. Finances are serious. So, building trust with your customers doesn’t take a couple years. I heard someone say on a webinar that it takes like 10–15 years. Now, I don’t know if it’ll take that long — that’s a long time! But obviously, it’s gonna take quite a few years and we can’t expect customers to just instantly trust neobanks.
So, how can neobanks build trust? Well, I go back to my three main things: education, trust, customer experience. That’s a good place to start. And on top of that, offering very personalized services will go a really long way because that’s something that incumbents are gonna really struggle with.
I love Chris Skinner’s analogy of a Lego Bank versus a Spaghetti Bank. A Lego Bank doesn’t build anything, but it joins all the pieces. And that’s what Fintechs do, right? You go on their marketplace and you can link your accounting software or your bills, and with open banking and all this data sharing and APIs, it’s much easier to have several services that are really high quality. The issue with incumbents is that they’ve been around for centuries and they are Spaghetti Banks. They have all these silos that are not connected and although I might have my mortgage with one bank, they won’t even know if I have another bank account with them, because it’s just not connected.
So, I feel that in the next few years, it’s really the companies that take advantage of personalized services that are gonna win the trust of the customers. Incumbent banks are gonna fall behind, and the companies that will survive are the ones that can adapt. It might take ten years, but they’re going to be sticking around long enough to build that trust.
I do believe that with stuff like personalized services and with customer-centricity, it’s just a matter of time really, and a matter of proving to customers that you’re there for them time and time again.