Commentary
FINANCIAL SERVICES | Contributed Content, Singapore
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How Banking should be more like water

The bottled water industry has figured out how to get to consumers and it’s through their hearts. Unlike banking which asks consumers to focus on the details of each product, bottled water successfully taps into the emotions of consumers by associating their product with the ideas of taste and style creating a consumer attitude towards bottled water based on their emotions and not logical comparisons of product features and benefits.

Banks have failed to tap into the emotions of consumers and their advertising may be contributing to the consumer’s indifference. Banks continue to advertise based on technicalities – products and pricing; and most of the time, they forget that almost no one is interested in the banking product itself.

Customers want to buy a new house or condominium – they are not interested in the housing loan; they want to get a new car, they are not interested in the underlying car finance product; they love that new handbag or dress – and they couldn’t care less about the consumer finance option.

Of course they will compare prices and – especially in some ASEAN countries – consumers will cherry pick the cheapest possible option to get what they really want, but this only happens because consumers have no emotional connection to their bank brand.

Studies have shown that most of the bank customers choose their bank based on the next available branch (between 70-80% of all new clients); a fact that is even more confusing given that half of these people will not go to that specific (or any other) branch within the next 6 months after opening their account; instead they will do most of their transactions online.

Most banks leverage their existence and differentiation based on the word “bank” but most customers couldn’t care less about whether they bank with a blue, red or green bank. This obviously has changed slightly over the last 18 months, given the impacts of the financial crisis, but still the underlying problem exists: Banks don’t have an emotional connection to the customer.

There hasn’t been a product innovation in retail banking in the last 15 years but Mineral water hasn’t changed for thousands of years. In that sense they are the same: no one asks for a detailed description of what is in their mineral water before drinking, instead they ask for a specific brand such as Volvic, Evian or Perrier. Their choice is a matter of taste and lifestyle. Shouldn’t consumers choose their bank based on more than which branch is closest?

Banks need to be clearer on what their product can do for their customers, addressing those needs directly and shying away from the technicalities of product and price. Consumers are always willing to pay a premium for things that make them different and at least let them look different in front of their peers.

If banks can creatively associate a positive emotion and positive attitude to their product, they will be able to develop their credibility so that their products benefits and features will be assumed and will not have to be individually listed.

By putting the emphasis on the emotional aspects of banking and delivering on them with all their physical and virtual channels, banks will be able to nurture consumer loyalty and develop a stronger branding image.

It will be a long way till customers will talk about banking the way they talk about mineral water, but for sure there is the opportunity for such a change.

The views expressed in this column are the author's own and do not necessarily reflect this publication's view, and this article is not edited by Singapore Business Review. The author was not remunerated for this article.

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