News & Insights

20/12/2019

What can financial institutions learn from fintechs? by Lucy Willatt



It’s safe to say that the Australian banking sector is at a huge crossroads. Traditional banking institutions have run the gauntlet with the Royal Commission and are now picking up the pieces. 
 
At the same time, new and nimble fintechs are popping up around them, with bright and flashy logos and branding, suddenly becoming attractive to consumers because of what they can offer and their fresh approach.
 
There has been a wealth of challenger banks breaking into the Australian market over the last two years. Brands like Xinja, 86 400, and Up Bank, are all gaining traction with consumers.
 
So, what exactly is it that they’re offering that consumers can’t get enough of?
 
It all comes back to the way these businesses are set up. These fintechs focus on technology-led banking, not banking-led technology.
 
They only operate digitally. They push hard on the things that ‘matter to millennials’, like no fees on overseas purchases. They offer complete transparency on which vendors you have paid through an auto-detect, allowing for more effective budgeting.
 
Perhaps more importantly, they can talk to consumers in plain, jargon-free language. They seem to make the banking process simple and offer value above and beyond what consumers perceive to come from the incumbent banking giants.
 
What do we want?
 
According to a KPMG report, by 2030, millennials will comprise 75% of the workforce. The report also states that 70% of consumers are looking to consolidate their financial relationships, to have them all, or most of them, with one provider.
 
A changing workforce coupled with a change in how consumers want to organise their lives means that financial institutions need to start working on how they can meet the needs of this shifting demographic.
 
To say that it is the end for the traditional banking institutions would be naïve. They are far from out of the game. They still have appeal with consumers, and still resonate well with certain demographics. But as technology continues to evolve, they need to keep pace with the fintechs.
 
So how can they do this?
 
  1. Don’t make assumptions about your audience
 
Assuming that people under 40 live off avocados, and that people in their 50s like sudoku puzzles and long walks on the beach, might be a little off. Making incorrect sweeping assumptions about your audience may alienate them, so try to keep stereotypes to a minimum when you’re talking about your customer base, or potential customer base.
 
 
  1. Embrace social media to communicate
 
Most businesses and brands are active on social channels, but there’s still some reluctance to actually engage with people through it. We all know that engaging with customers on Facebook as a platform can very quickly turn into a mud-slinging contest, but for consumers, knowing that they have a way to reach the brand is half the battle. How they are communicated with on their issues is the sticking point.
 
 
  1. Value your customers
 
Ultimately, consumers want to feel valued by their bank. We don’t want to feel like we’re being ripped off, like we’re being taken advantage of by our bank because we’re being loyal and sticking around. Offer us competitive products, help us save money, and make us feel like we’ll be missing out if we move on to another institution.
 
At the end of the day, it’s not just how you reach out to your customers, but how you keep them.
 
Traditional financial institutions won’t stop the fintechs growing or sweeping up unhappy consumers. Instead they can look to how they interact with and treat their existing customers. As much as we love technology and things being made easy for us, we also like trusted and historical brands – there may well be room for both.

Stay Connected

If you wish to stay connected to Honner and receive future blogs, simply enter your email address below.

Subscribe

Latest News And Insights

Honner Blog 6/03/2020

Favourable news coverage is not a ‘great outcome’ – so let’s stop calling it that

It is a common mistake in PR to refer to positive news coverage as a “great outcome”. AMEC has defined communicational outcomes as the effects in the perceptions, attitudes and behaviour of our target audience. None of these changes are observable through news coverage.

READ MORE   >

Honner Blog 2/03/2020

Communication strategies to support nervous investors: a guide for fund managers

The coronavirus is currently spreading, bringing with it panic and anxiety for investors of all types around the globe. In an industry where it is difficult to differentiate your offering, quality, timely communications and the way you deliver it can clearly distinguish your brand.

READ MORE   >

Honner Blog 19/02/2020

Investment Management in Australia: Where are the women?

Research shows that the ability of businesses to build high performing teams depends on attracting and valuing diverse talent who bring different perspectives. Yet the majority of teams in the investment industry remain very male dominated. In our latest blog, Philippa Honner speaks with Yolanda Beattie, the founder of founder of Future IM/Pact, which aims to achieve an equal number of women and men in junior analyst roles by 2023.

READ MORE   >

Honner Blog 13/02/2020

Insights from Canada (2019 Exchange) – The changing face of communications

Best practices can be easily adopted and adapted across borders, especially in the agile and increasingly globalized field of PR and communications. Read Rashmi’s on-the-ground insights from a week-long exchange at Argyle PR in Toronto.

READ MORE   >

Honner Blog 5/02/2020

Insights from Canada (2019 Exchange) - Far flung markets with much in common

Despite the distance and huge time difference, Australia and Canada are close cousins when it comes to financial services and media. Read Rashmi’s on-the-ground insights from a week-long exchange at Argyle PR in Toronto.

READ MORE   >

View All    >