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Reinventing The Bank / Customer Relationship

Customer engagement is talked about a lot in banking. And with good reason. Engaged customers are the ones most likely to respond to offers, provide useful feedback, participate in positive conversations on social media and act as a resource for other customers, answering questions, making recommendations and providing referrals.

They’re also the ones most likely to own multiple products with a bank, are less likely to switch to a competitor and have a level of emotional attachment and trust that is hard to shake. What’s more, digitally-engaged customers are shown to have higher levels of card spend and higher levels of engagement overall at the largest US banks.


Traditional banks haven’t mastered customer engagement

Banks are generally aware that they have a gap in customer engagement and that a change in strategy is necessary to recapture or retain their growth. This belief is far from unfounded. Of those consumers who are planning to open a new account, 50% are not likely to do so with the bank they currently use.

When most of the communications received from a bank are updates to terms and conditions packed with legal language and one-size-fits-all upselling and cross selling notifications in their app, it’s no wonder that customers are underwhelmed by their brand experience.


Challengers aren’t completely successful either

Challengers like Monzo make an effort to make the bank a relatable, personal brand that customers enjoy engaging with. They share updates, financial tips and company goals on a public blog page, where customers can also ask questions, make suggestions, or vote for the next feature they would like released. They have an engaged community on their company forum and across social media, so it looks like they’re excelling at customer engagement.

But the evidence calls into question whether this sort of engagement is translating into material advantage. The proportion of Monzo’s customer base that is exclusive to them is just 20%. This is very low compared with traditional rivals and shows that in spite of their efforts to be a best friend as well as a bank, they’re not realising the results that such an engagement strategy would hope to.


There is an immediate opportunity for traditional banks

Building trust takes time and this represents a window of opportunity for traditional banks to act and engage with their customers, ensuring their loyalty in the years and even generations to come. They can lessen the impact of the challengers by raising their standards of engagement and playing them at their own game, removing customer engagement as a competitive advantage and leaving them to capitalise on their strengths in terms of scale, stability and reputation.


How do you successfully engage customers?

There are two main areas of focus in customer engagement, firstly engaging individuals at scale, creating relevant, timely and tailored offerings and messages that add value for individual customers. These need to be given in context, based on behaviours, environmental factors and life events. Secondly, communicating these messages and offerings through customers’ preferred channels in a consistent and convenient way.


How can a digital investment platform help?

A digital investment platform is a key tool for helping banks to interact with customers based on analytics, digital sales and marketing. There are a few key components to this:

  • A data-driven single view of customers, products and services, created by extracting data from product and business silos.
  • Reaching out to customers on their preferred channels and enabling them to seamlessly switch channels when desired, using their interaction history and cutting edge technology.
  • Creating truly tailored offerings and individually personalised experiences using data and analytics.
  • Triggering interactions and offers based on contextual data, for example behaviours, environmental factors, life events.


If you’d like to discuss how to use a digital banking platform to create a customer engagement strategy that will have a real impact on how your customers feel and behave, let’s start a conversation.

Key Ideas

  • There is an immediate opportunity for incumbent banks to lessen the impact of challengers by raising their standards of engagement
  • The key are of focus in customer engagement should be: consistently engaging individuals at scale through relevant timely, value-adding offerings and messages, in customers' preferred channels
  • Digital investment platforms can help banks interact with customers based on analytics, digital sales and marketing