Banks want to be where the customers are

Financial institutions are increasingly taking a page from traditional retailers in how they communicate to consumers at the storefront level.
ING Cafe

Imagine you’re running errands at a shopping mall and you remember you wanted to renegotiate the line of credit on your home. You stop at a nearby bank kiosk whose teller punches up your account and instantly presents a customized offer based on data such as your income and past payment history.

Such scenarios could become increasingly common in Canada as banks target customers using traditional shopper marketing techniques. A SAS/Leger marketing survey conducted this spring found Canadians are dissatisfied with the personalized service they receive in exchange for handing over information about themselves. And banks are at the forefront of brands trying to better understand what their customers want and expect.

“We absolutely do see that banks are behaving more like retailers,” says Lori Bieda, executive lead for customer intelligence at analytics firm SAS Canada. She worked in the banking industry for several years and says SAS works with several Canadian banks to help them mine and analyze customer data to offer more compelling retail choices.

Banks sell broadly similar products so increasingly they must compete based on customer service, she says. They use analytics to determine what their customers have done and what they’ll likely do next. Rather than having someone wander into a branch and ask for a loan, they can use a customer’s history to optimize an offer at the right price point.

Banks across North (and South) America are creating what Bieda calls “nouveau” branches that change the branch experience into something that more resembles a quick-serve kiosk. They are cheaper to build and staff, and feel nothing like a traditional bank branch.

The examples abound. TD Bank heavily promotes its longer hours and Sunday banking; ING Direct opened so-called bank cafés in Toronto, Montreal, Vancouver and Calgary, while RBC has begun revamping its branches around touch-screen technology installations designed to be more welcoming to customers.

The banking market in Canada is far more competitive than just the traditional “Big Five.” There are over 70 chartered banks in the country that are spread out regionally and at different levels. The advent of the ATM was widely seen as revolutionizing the way banks dealt with customers and the dizzying array of technology now available means consumers are demanding ever more from their banks.

“[Banks] are taking a page from the best practices of consumer marketers,” says Philippe Garneau, president of GWP Brand Engineering, who worked extensively with ING until 2010.

He says the industry has moved past “the archetype from the Mary Poppins movie where they lower the steel grill and say the bank closes at three o’clock.”

“Banks used to listen to the voice of the customer; now they listen to the mind of the customer,” he says.

Photo: vxla, Flickr Creative Commons

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