To many in the financial services industry, the Royal Commission was a traumatic and challenging event. The full scope of its impact remains to be seen, but it’s clear from the exit of some of the big wealth and insurance players and the mooted fines and criminal charges that the industry has been shaken from its complacency.
And it’s for this reason that I’m strongly of the opinion that the Royal Commission is the best thing that’s happened to financial services marketing since the advent of the internet. Here’s why:
Change genuinely is a really good thing.
Einstein once said, “The world as we have created it is a process of our thinking. It cannot be changed without changing our thinking.”
Never was this more true than in the case of financial services marketing. How we think about our customers, products and brands have, in most cases, been relatively unchallenged for years.
Small numbers of players owning the majority of market, a lack of diversity in products and conservative attitudes have all combined to narrow our thinking of how we approach marketing.
But with the outcomes of the commission having a genuine impact on customer perceptions, distribution channels and remuneration models, we’re in a world where financial organisations must change or die.
It’s these circumstances have handed you the greatest opportunity for you to drive genuine change in your business. Why? For these five reasons:
- It’s forcing firms to address what their brand stands for
- We have finally realised that customer centricity is essential and real
- We have to show empathy
- New entrants have new impetus to disrupt
- We have to be smarter in how we do things
1. It’s forcing firms to address what their brand stands for
This year’s Yell Finance Marketing Survey highlighted that over 4m Australians listed ‘all banks are the same’ as their primary reason for not changing providers as a result of the Royal Commission.
While this may have reflected a general sentiment and weariness towards the category, it also reflects the homogeneous nature of much of the category’s branding.
For example, a question I ask when working on brand strategy projects looking to find a differentiated brand story, is ‘what do each of these big brands stand for?’:
I ask this question to understand perceptions – what aspect of each brand do they identify with? How do they make them feel? Is that feeling different for any of them? My experience is that most financial marketers struggle to explain how the big four banks differ. If that’s the case for marketers within our segment, how are customers expected to differentiate?
This is a common issue across categories and, coupled with the rise of aggregators, brand loyalty and engagement is being severely eroded.
The Commission highlighted the failings of our biggest brands and created an opportunity for those brands sitting below the big players to demonstrate how they’re different.
Which is why the opportunity the Royal Commission has presented – to take a long, hard look at your brand and find a story that stands you apart from your competitors – shouldn’t be ignored. To be effective, that story must come from your purpose: why you exist and how you benefit the community.
You should all be looking to grasp this opportunity. Four million Australians would consider you as their next bank, insurer, lender or adviser if you can show them you’re not just the same as all the others.
2. We have finally realised that customer centricity is essential and real
For years we’ve been told that customers are at the heart of everything financial institutions do.
One thing clear from the Royal Commission is that for most of the big players, and we suspect for many of the next tier down too, this is simply not true.
When you have the chairman of one of the largest banks in the country clarifying that shareholders are the primary concern of his bank, then you can be pretty certain that claims of customer centricity are hollow.
However, the great cultural revolution awakened by the Royal Commission means we may finally see a shift towards true customer centricity. This will partly be enforced by the regulator at a corporate level, but will also be seen in the growth in influence of the CCO, an increase in understanding of the full customer experience and marketers being focused on delivering customer outcomes, rather than selling product.
3. We have to show empathy
Clearly, if customer centricity is going to increase, then a greater understanding of customers’ rational and emotional needs will follow.
The number of horror stories arising from the Royal Commission that went beyond mis-selling into practices that had fundamental impacts on customers showed a disconnect between what customers need and what they are being provided. While financial institutions are often great at fixing rational experiences – building apps etc, they’re terrible at addressing the most impactful experience issues.
This is where marketers come in. Where you may have struggled in the past to get traction on initiatives that create an emotional connection with your customers, you now have the opportunity – and compelling reason – to do so.
Delivering empathy through your marketing will also address our first two points. It will demonstrate customer centricity AND help differentiate your brand from your competitors. It will show your customers you understand them and your brand cares for their wellbeing.
4. New entrants have new impetus to disrupt
The Royal Commission may not have been the trigger for new entrants into banking and other sectors but, a bit like Red Bull, it’s definitely given them wings.
The opportunity to differentiate based on not being like the established brands is a massive one for the likes of 86400, Volt, Xinja, Prospa, Athena and many others.
So why is this a good thing? Well, for one, competition crushes complacency. There’s now a group of new players out there with human centred design at their hearts, distinctive brand stories and aren’t afraid to take disruptive campaigns to market.
The Royal Commission is obviously great for them, but it’s also great for marketers, because we now have the excuse to disrupt traditional marketing strategies. Falling back on eDM campaigns is only going to get you so far when there’s a bus driving around Sydney covered in leather straps.
This doesn’t mean take risks with your promises (we are in a post-Royal Commission compliance world, after all..), it means you should be taking inspiration from what’s happening outside your organisation. It’s something that marketers in established firms often fail to do, but now can’t afford to ignore.
5. We have to be smarter in how we do things
We’ve seen how the Royal Commission has changed brand perceptions, boosted new entrants and given marketers the inspiration to challenge convention. However, it doesn’t necessarily mean it’s opened up the wallets and increased marketing budgets. If anything, there’s been a belt-tightening, while operational imperatives have been addressed.
Which is where the final benefit of the Royal Commission’s impacts on financial marketing will be felt. You’re going to have to work smarter.
With reduced or static budgets, an increased demand on customer centricity and the need to differentiate through creating compelling brand stories, you’re going to have a lot of priorities that need to be addressed.
Which is why, as well as considering new disruptive tactics, you also have an amazing opportunity to sharpen your approach. This could and should include incorporating a test-and-learn methodology, prototyping campaigns and trying new channels and tactics on a micro scale.
It can also include drilling down into segments and personas to really understand what’s going to move the dial – focusing on the interactions that really make a difference, instead of big, broadcast campaigns.
One thing is for certain: we’re in a brave new world. The question is, are you going to embrace this amazing new environment, or stay living in the bad old days?
If you’d like to challenge me on my assertion that you should be really happy right now as a result of the Royal Commission, or you’d like some help with getting to grips with your brand story, please drop me an email. I’m very happy to catch up.