• Mikko Kähkönen, Global Head of Card Products at Giesecke+Devrient


• 21.10.2022 05:45 am
#banking

The biggest brands, particularly those with a global reach, are resonating with consumers to such a degree that they have become a way of life. In 2021, brand loyalty to Apple hit an all-time high of 92%, which has been possible due to a focus on superb customer experience, innovation and ensuring continued customer satisfaction.

The result of continued loyalty among these like-minded groups of people is a collective feeling of identity with the company’s purpose, enabling them to become the brand’s biggest advocates. The positive word-of-mouth that then spreads is essentially another form of marketing, and with technology businesses building their own set of evangelists, there is scope for banks and fintechs to be able to do the same.

Brand perceptions among younger generations

Younger generations of people favour self-expression, and Generation Z is the first to be made up of solely digital natives. Part of the reason that lifestyle branding is expanding rapidly among these younger groups is down to the rise of influencer marketing. While advertising and TV shopping defined the pre-social media era, influencers are shaping the purchasing decisions of the new generation, with the market growing from £1.7bn in 2016 to a staggering projection of $16.4bn this year.

It's little surprise therefore that the finance world is looking to tap into this trend. Branding expert Apple has even ventured into this space by introducing a titanium credit card, marketed as the only one of its kind, and allowing consumers to benefit from individuality in their lifestyle. With the customer experience front and centre of these strategies, how do banks and fintechs venture into lifestyle-based banking?

Doubling down on design

The key for banks and fintechs is to focus on a holistic, engaged approach that improves the customer experience, and there are plenty of examples out there of a customer centric strategy. Monzo was one of the earliest app-based challenger banks in the UK looking to disrupt the established market of traditional high street banks, and the firm places a key focus on its customers’ requirements. Its neon and coral coloured bank card means it has a distinctive look. The bank’s head of design, Hugo Cornejo, described this as an intentional move to grab people’s attention and create a discussion when handed over to make purchases, such as in a restaurant for example.

This strategy is reflective of a brand that truly understands its desired customer base, and knowing the motivations of consumers will enable banks and fintechs to select the right design elements for their bank cards, as these are the physical symbol for their lifestyle.

This is however just one instance of how a card can suit the lifestyle of the consumer. The design could reflect exclusivity, innovation or sustainable practices for customers that want to support green initiatives.  A metal card for example is resilient against fast-paced lifestyles, it is defined by its longevity and ultra-sleek design. Eco-cards that are made of 100% recycled, ocean-sourced, or bio-plastics can also resonate with environmentally conscious consumers, which is particularly crucial as a 2020 report discovered that 73% of Gen Z consumers were willing to pay more for sustainable products. A further study conducted in 2021 also revealed that nearly 90% of Gen X consumers would be willing to spend 10% extra for more sustainable products, compared to just over 34% in 2019.

Communicating effectively to consumers

Beyond design, communication to consumers is critical, and social media is now a key method of talking to younger customers in particular. The launch of digital US bank Step was promoted on TikTok by leading influencer Charli D’Amelio, and achieved support from celebrities such as the rapper Nas. For younger consumers that do not have an interest in finance, adopting these communication channels and harnessing influencer power will help to resonate with their interests.

Alongside impactful and sustainable bank cards that can also be personalised to reflect the tastes and personal interests of the consumer, digital applications will allow for effective online experiences as part of a combined phygital approach, where digital and physical experiences are brought together. This will be critical as more consumers decide when they want a physical or digital touchpoint, with the banking situated where the customer is.

Taking a holistic approach

To be able to build a lifestyle brand, banks need to fully understand their consumers and take steps to maximise the user experience, and the key to doing this is by taking a holistic approach. In addition, they need to leverage data effectively to generate customer insights and understand their likes and motivations. The subsequent building of a strong image, targeted products and use of relevant personalities will place banks and fintechs in much stronger positions to attain customers and ensure their loyalty moving forward.

Successful banks ultimately understand what their customers aspire to. They speak their language, target them via their preferred channels and create products specifically for them. The result is an established brand identity that’s instantly memorable and highly resonant with the target market.