Retail banking: It’s the experience that counts and the purpose that matters

Retail banking, traditionally, has a reputation as a bad business when it comes to innovative practices and strategy, especially in the UK. But why is the rate of innovation in retail banking so slow when the solution is so simple?

While some brands have introduced innovative customer touchpoints online and offline – take for example Barclays's PingIt app as well as challenger brand Metro Bank entering the market with an extensive brick and mortar experience catered toward a 21st century customer, there is still not one holistic banking experience that is consistently good or differentiated.

Even relatively new entrants to the field, companies that have the potential and flexibility to transform the conventional trappings of the service, only end up disappointing. Another example: TSB, Trustee Savings Bank, focuses on being the “old-fashioned local bank,” with a slightly differentiated message that the market longs for. In reality, their retail banking experience, at least the online retail banking experience, still falls significantly short of being a holistic and streamlined one. This is a vital touchpoint to attract today and the future customers, which are chiefly the Millennial set.

But when we compare the UK banking experience with another market such as Germany, a lot of interesting differentiations come into play. In Germany, a bank is a premium retail experience with private consultation rooms and a modern, professional feel. Deutsche Bank, Volksbank and Sparkasse dominate with a localized brand set up. Their environments and personal approach ooze professionalism in every vertical. In the German retail banking experience, relationships are built with customers at an early age and are made a primary component of the service. I still remember the first toy I got when I saved my first Deutsche Mark. The localized, personal experience is still key for their business success model and, even while they might be lacking in online and digital applications, it is not seen or felt as a negative aspect due to the consistency of trust and reliability of the experience at all other touchpoints.

Meanwhile, back in the UK, online banking and the flexibility of apps− particularly in the case of Barclays−have improved “on the go” relationships, but the localized trust factor is still missing. The avoidance of entering a bank on the High Street is a common thing simply because the retail experiences vastly differ from branch to branch, and most banks still focus on the classic “up-sell” model when servicing customers, rather than building trust. If the environments of any High Street bank don't communicate trust nor quality, neither can ensure the experience will be consistent.

Returning to one of the small players: Metro Bank, the brainchild of American business tycoon Vernon Hill, base their brand model on “old fashioned and personal foundations,” and have definitely had success by adhering to these values.

So why is the retail banking experience being neglected by the established players, nearly worldwide? A first step in rectifying this would be to introduce a consistent service experience–one that communicates trust at every level, and that can be realized and implemented at relatively low investment.

A recent interaction I had with HSBC Premier demonstrated the fact that even a "premier” service–meaning a premium retail banking experience that I am paying more for–does not work. While promising to “manage my personal economy,” my personal banker has yet to respond to an inquiry I made four days ago. The in-branch experience also falls significantly short, with their staff being unable to answer more challenging questions, nor being able to handle an egregious technical fault, one that left me without money in my current account over the weekend.

Communicating on brand at every touchpoint is vital for established retail banks that are trying to change the conversation and rebuild trust with their customer base. Maybe to me it seems obvious that there needs to be a transformation of the retail banking experience and a renewed focus on these most impactful touchpoints in developing longterm customer-business relationships.

Following my HSBC experience, I went onto Twitter to seek a response from HSBC and its competitors in order to see who really cared – the only bank that responded was TSB. It was a positive, nice offer to visit their website and switch services, and while they do offer these “personal relationships” through their local banking mantra, even the first touchpoint I encountered after their Tweet disappointed. Their website design, inflexible to stretch to the whole screen for starters, did not communicate their message clearly and simply. Certainly not an experience straightforward and trustworthy enough to garner a switch.

What should retail banks do to differentiate themselves and, ultimately build trust around reliable touchpoints and experiences? The key is to develop a differentiated customer-focused experience built around brand purpose and staying true to this at all the key and signature touchpoints, online or off. If brands such as Amazon, Google or Apple were to enter the retail banking space, the barrier to switching banks and brands will be even lower and truly, only the brands that deliver unexpectedly fresh and remarkably clear experiences focused on the brand purpose will win.