What’s happening in financial services?
Our final video looks at consumer trends in retail banking during Covid-19 and beyond. Listen to a round up of insights and a three phase approach to tailoring your marketing communications.
Hi and welcome to the final instalment of our consumer insights. This week we’re looking at financial services, specifically the impact of Covid-19 on our financial lives. In this short video I’ll take a quick look at the top consumer insights and a three stage framework for structuring your customer communications now, and in our new normal.
The pandemic has impacted many areas of our lives which are intrinsically linked to finances. Concerns are rising as people are facing a reduction in pay, unemployment and pressure on paying for things such as rent and student debts. This has resulted in an unprecedented number of calls to customer service teams and pressure upon banks to support their consumers and maintain if not exceed an expected level of customer service.
Consumer spending has increased online as consumers are purchasing groceries and consumer goods during lockdown. Overall individuals and small businesses are streamlining spend in preparation for financial difficulty.
Our transformation to becoming a cashless society has accelerated, as fears over handling money or touching ATMs or card readers has increased. We’re in favour of using contactless payments and digital wallets such as Apple Pay and Google Pay.
The Bank of England reported a drop in borrowing on personal loans and the number of purchases on credit cards has fallen, likely as a result of decreased spending on lifestyle and entertainment outside of the home during lockdown.
Mortgage applications are steady, but the true impact of Covid-19 is yet to be seen as much of the data includes pre-Covid applications and approvals still going through the process.
Savings is an interesting topic – many consumers have reported not having enough savings to cover their living expenses for one, two or three months. Web searches on ‘how to save’ have increased since March this year, yet it isn’t conclusive whether consumers are saving more or less at the moment.
Finally, what does the consumer look like beyond Covid-19? With such rapid change at the moment we can only use what we know to paint a picture of the potential post-Covid consumer…
As branch closures and reduced hours have forced consumers online, we’ve seen an acceptance and adoption of digital banking alternatives. As app usage across many industries has increased we expect this to stay and present new opportunities for brands.
A common thread we’ve seen across all of the industries we’ve visited is wellness, in this case, financial wellness and the expectation that a brand will support a consumer in ways that go beyond their core product or service. For example, consumers will look to a brand to help them look after their financial wellbeing and that of their families and communities. This has been seen already as consumers were discussing online their bank’s policies over things such as payment holidays and late payment fees before the FCA regulations were in place.
The increase in financial fraud and scams during Covid-19 has had an impact on consumers and levels of fear, confusion and mistrust are set to continue. This – and other factors – will certainly have an impact on whether the new consumer will align themselves with the more traditional, safe institutions or look to the more digital and tech savvy challenger brands. Time will certainly tell.
So what can you do with this information and what is the best approach to structuring your comms during this time?
Here you will see a brief outline of our three-phased approach, which is to focus on what we call Respond, Relieve and Rebuild. These phases allow us to structure communications based on consumer behaviours and their mindset, helping us hit the right message, tone and format of communication. What you do now as a brand will certainly have an impact on how consumers react to you in future.
The respond phase is where a brand should acknowledge the concerns of their consumers and show support for their communities. Many banks have been guided by the FCA to implement temporary measures to help customers with things such as payment holidays, and have already implemented a raft of communications of this nature whether that be online, in-app or over the phone. While this phase may well be in hand, this is a circular process – so should we revert to a second phase of the virus, or other unforeseen challenges, you need to be prepared to quickly adjust communications to revisit this consumer mindset and behaviour, to raise awareness of solutions and opportunities for your customers.
The relieve phase is where a brand should provide positive support for customers. Customer needs will vary considerably and it is a challenge for banks to appeal to customers based on their unique needs. But information around customer service, products and financial services that is clear, targeted at current challenges and optimistic will instil confidence and a sense of empowerment within the consumer.
Finally, the rebuild stage is critical for a brand to prepare for the transition to our new normal and continue to build reputation among existing and new customers. Consumers want to feel supported and there may be an opportunity to focus on the financial wellness an individual and their communities to increase loyalty and built trust and differentiation from competitors. If you are leading in digital transformation, now is the time to support customers in their adoption or move toward a more digital first customer experience.
So thank you for listening and I hope you’ve found this video helpful. As always, if you’d like to know more about our sources or discuss any communications challenges you might have, please get in touch. Thank you.