Reinventing Loyalty in Financial Services

There will be very few companies with whom any customer might choose to share all, or even some, of their data. And, there won’t be room for as many providers as today, because of the ecosystem of service offerings that encompass every facet of financial requirements: from basic checking and current accounts, to savings accounts, retirement planning and wealth management.

The decision of who consumers choose to share their data with will come down to brand elasticity and the ability to embrace new ways of talking and listening. Can the brand stretch to accommodate new services delivered in new ways to consumers? Can the brand manage the reputational risk if something goes wrong?

Amazon is the the best example here. It doesn’t seem to matter what you put the word Amazon in front of – Amazon Balance, Amazon Pay, Amazon Key, Amazon Prime, Amazon Fashion – it makes sense and there is an implicit positive association around the extension because when things go well you expect it, and when things go badly they fix it.

Try that with other familiar brands – financial and non-financial – and you will see what this means. Banks in particular tend to be heritage brands, with proven resilience only within their historic heartland.

The brand is critical because it needs to be appropriate when it is talking to a consumer about financial well-being, retirement, possible overspending, or worse … when the consumer is in financial distress. That’s why Amazon is mentioned repeatedly. It’s not just the very competent update messaging that wraps around anything you might buy from them; they’ve also invested heavily in the Echo interaction technology, where you literally talk to it and it listens to you – and vice versa.

People will routinely use this kind of technology as their interface with their life, which should serve as a reminder that there is no absolute requirement for branches and physical locations to sustain a relationship with the consumer.

Transformation and building the next generation of services that enable and engender loyalty is not a technology project. It’s not, for those beholden to PSD2 and similar Open Banking regulations elsewhere, a compliance project. It is a re-imagination of how financial services are conceived, designed and delivered. It how the brand that offers those services listens, understands and communicates to its audience – at an individual level.

We will move away from notions of transactional relationships to something more emotionally engaging, personal and pleasurable, because the consumer has explicitly agreed to share their data in the expectation of receiving services that work for them and feel good to them. When they receive rewards they will feel valued and appreciated, and if they do not, they will turn that data sharing off. They will then find someone who is using data, and aggregating other sources to understand preferences, see the potential gaps or under-served needs and deliver great experiences tailor made for the individual.

This is the start of something far more than a battle for share of wallet or even share of mind – it is becoming the battle for the share of heart and life.