Is banking loyalty dead? I’d like to think not, but grab some research reports on customer allegiance to mainstream banks and it’ll make for some pretty grim reading.
Over the past few years, high street ‘loyalty’ has become a byword for ‘losing out’, as customers who choose to stick with the same bank over and over do not get value but, instead, poor interest rates and little return.
Add to that a myopic, one-dimensional set of mainstream banks and you have a playing field increasingly dominated by customers rapidly moving from big bank to big bank, ‘ditching and switching’ once those better rates become, well, less better.
‘You’re not helping me – why should I help you?’ is the perceived refrain from the customer to one of the big four. And who can blame them?
The thing is, today’s customer wants something different from their bank: more flexibility, diversity, a focus on their actual needs. And, in my opinion, this is something they don’t get from the high street.
So, who will drive loyalty in banking? The answer, I think, lies in the role of the specialist bank. Here are three reasons why.
What do banks mean when they say they offer ‘real products’? For me, it’s quite simple: products that are integrated into the lives of the customer. Products that solve problems people face every day. At Masthaven, for example, this means a whole range of things, including mortgages tailored for the self-employed (who often are not catered for on the high street), development finance for housebuilders locked out of mainstream funding channels and savings accounts that allow customers – not their bank – to choose what to do with their funds on maturity.
Personalisation and flexibility
Today’s customer craves flexibility from their bank. They don’t want identikit products, devoid of variety, that apply only to a certain consumer demographic. And they don’t want to be ignored by a bank simply because they don’t meet certain requirements.
Specialist lenders throw the tick boxes out of the window and take time to look at the person behind the application – not just the application itself. And they make flexibility standard – with, for example, a more progressive approach to impaired credit than some mainstream banks have.
A human approach
Where have all the humans gone? Technology has its place, but I’m concerned about how many banking functions are being replaced by digital processes. Automated bots for customer service, for example, mean the human element is being stripped back – and this has knock-on effects for loyalty.
Finance, in whatever form it takes, is personal. So, when a customer wants to speak to their bank about their money, they don’t want an auto response. They want to speak to a proper person. Specialist banks, with smaller customer numbers and underwriters used for complex cases, are well placed to meet this need.
SIGN UP TO OUR NEWSLETTER TO RECEIVE MORE NEWS LIKE THIS STORY
FP Show confirms Zopa co-founder as keynote speaker
James Alexander, co-founder and former CEO at Zopa (pictured above), has been named as the keynote speaker at the forthcoming Finance Professional Show...
Metro Bank provides £4m invoice finance line to healthcare business
Metro Bank has provided a £4m invoice finance line to medical insourcing specialist 18 Week Support Group...
Modulr to create over 30 new jobs in Scotland
Modulr has completed its latest funding round led by digital venture builder Blenheim Chalcot, which takes the latter’s total investment in the payments fintech to £10.5m...
Specialist banks answer need for products that ‘reflect the reality of today’s society’
Better service and products are the main reasons why a broker would use a specialist bank, according to the latest poll by Specialist Banking...
Leeds Building Society cuts rate on retirement interest-only mortgage
Leeds Building Society has reduced its five-year fixed rate on its retirement interest-only mortgage...
60% of people want to know where their money is invested
Six out of 10 people (60%) want to know where their money is invested, according to the latest research published by Charity Bank...
Why commercial banks are in danger of being left behind
Harnessing a customer-first, technology-led approach, retail banks are paving the way with innovation...
Aldermore supports Quba Solutions with £10m facility
Aldermore has provided a £10m finance facility to Dorchester-based Quba Solutions...
TSB announces new SME banking leadership team
TSB has revealed its new SME banking leadership team as it prepares to launch its business banking proposition later this year...
Paragon Banking Group expects 25% BTL pipeline growth
Paragon Banking Group has announced that its BTL pipeline at 30th September 2018 is expected to be more than 25% higher than the level reported at the same time last year...
Development Bank of Wales moves into new Wrexham HQ
The Development Bank of Wales has opened its new headquarters in Wrexham at Yale Business Village...