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An existential crisis may present the biggest opportunity yet for banking brands to restore their image
Banking boffins from Lloyds, Nationwide, Revolut and more join us as we take a look at how our financial institutions are being shaken up in the pandemic period.
In the 13 years since the credit crunch, the fortunes and finances of banks have recovered. But their reputations have not. Over a decade’s worth of revelations – PPI mis-selling, the HBOS Reading fraud scandal, the damage done by RBS’s now-defunct Global Restructuring Group to small and medium businesses – have kept public trust in financial institutions in the red. There’s some irony, then, that a new existential crisis may present the biggest opportunity yet for banking brands to restore their image.
Tanya Joseph knows plenty about the way banks are perceived by the public. Formerly director of external relations at Nationwide and now director of specialist services at H+K Strategies, she says: “High street banks have had a good virus, and the vast majority have done some really good work engaging with their customers, making sure they understand what’s available to them, communicating about mortgage holidays...”
As consumers grapple with the economic impacts of the pandemic on their households, Joseph suggests that they’re actually looking on their banks more positively. “People will stop blaming the banks and start thinking ‘these people are really on our side’,” she suggests. “For the economy to survive, we need people to buy houses and buy cars. But the reality is that banks and building societies still bear the scars of the financial crisis. Banks were blamed for everything for a really long time, but this has given the banks – I use that term widely – an opportunity to demonstrate that they are on your side, that they really care about you. They are saying: ‘we are people like you and not all fat cats with our noses in the trough’.”
At Lloyds, one of the brands most associated with the last recession, director of marketing communications Richard Warren has been tasked with communicating the availability of its support options to customers, focusing on mortgage, credit card and loan repayment holidays. It has also increased its interest-free overdraft to £500 and increased the contactless limit on its cards. For its business customers, Warren says the bank has been concentrating on the Coronavirus Business Interruption Loan Scheme (CBILS) and the business Bounce Back Loan.
Notifying customers about its products has taken on an urgent tone, he notes: “It’s important to get everyone to know about this as much as we possibly can. So we’ve been doing that in all our advertising – it’s on-site everywhere, through social channels, it’s very much communications as an information medium. That’s been full-on for the last three months.”
One of the biggest threats to finance brands’ hegemony (to its customer-facing brands, if not to the money flowing behind them) has been the rise of digital-only challenger brands. Taking advantage of the major brands’ trust deficits, firms like Revolut and Starling have hoovered up bigger rivals’ younger customers. But questions have hung over their viability as guarantors of consumers’ finances. Proving their worth and their staying power during the pandemic could reinforce the position of these scrappy and nimble (for the banking world, at least) companies, proving to customers that an established name isn’t necessary for financial stability.
Chad West, the director of marketing and communications for Revolut, explains how the brand has adapted its offering and its growth plans over the past year. “While we don’t do mortgages, we’ve seen declines in inevitable areas like car payments. Though we’ve seen e-commerce payments skyrocket and stock trading, so we’ve been diverting our efforts into those areas, figuring out how best we can develop those products. Our stock trading feature is only US-focused, so we’ve been introducing UK stocks and EMAs.”
According to West, this adaptive approach to the services it provides is part of Revolut’s experimental philosophy. “The reality is, we’re still uncertain as to where we’re going and we’ll have to make tough calls,” he says. “There may be things you’re doing right now that are just not sustainable. And if so, you’ve got to get that tone right and be open and honest. Customers will resonate and appreciate that.”
With most customers now accessing banking services online, product design and effective communication are key. Adrian Webb, chairman of Lab Group, says the quality and architecture of digital banking may struggle to make up for the lack of face-to-face service amid the crisis. And with many people facing financial insecurity, digital banking services need to perform well... and responsibly.
He says: “We’ve had thousands of years of detecting the moods of other humans around us, and we’ve got really good at it. The problem is, digital journeys have only been around for 20 years and they’re still really poor at spotting a vulnerable customer in those spaces. We can’t have a vulnerable customer being led down some optimized digital journey and coming away with an inappropriate product.
“The boardrooms want everyone to go online, but as you push more people online, are you really going to pick up that vulnerable customer? Are you really going to serve them correctly? That’s the real challenge at the moment.”
Joseph agrees: “The notion that you can just wander into a branch is not going to be OK for a while yet.” She points out that with more customers economically vulnerable, banks need to be particularly vigilant against criminal activities. “Fraudsters,” she says, “have not taken a furlough. They too are having a really good virus.”
For an industry tarnished with a reputation for irresponsibility, the pandemic offers the greatest chance yet for banking institutions to show what they’ve learned over the last decade. As Joseph puts it: “Responsibility is the most important thing. We’ve got to give customers what they need in terms of support. It’s a much more holistic conversation with customers now.”
