Switching Banks
9 May 2023
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What has your bank done for you lately?
In a world where we have endless choice for everything from the pods we use in our morning coffee, to the subscription channel where you watch TV, many people remain surprisingly loyal to their banks.
It could be because they’ve banked with the same institution their parents have always banked with. Or maybe it’s because the idea of moving their finances seems like a jugganaut of a task.
Both of these amount to some form of laziness on part of the consumer. But I’d say it’s something more than just CBA-ness. It’s the oldest form of brand loyalty there is.
We feel a sense of comfort and security in sticking with what we know, especially when it comes to something as personal as our finances. For many, you are just an HSBC person, or a Barclays person. You’ve always been so.
You opened the account circa 10 years old and have never looked back. It’s been there through it all. The first £1 you earned from the tooth fairy. The first £20 you earned from a paper round. Your first proper paycheck and so on.
Changing banks isn’t just switching to something new. It’s basically a break up.
And nobody likes to be the one to do it.
New ways to bank.
But over recent years, there’s an enticing trend of challenger banks using hot stuff apps to lure in customers and shake up the old guard.
Take Monzo — the bank, still relatively new to the scene, boasts over five million customers in the UK. With a bright coral-coloured debit card and a sleek app that offers real-time notifications and budgeting tools, Monzo has become the go-to bank for many millennials and tech-savvy individuals.
Or Revolut — which builds on trading trends to attract young investors in a fully rounded finance experience through their app that covers everything from savings, stocks and shares, to crypto and commodity exchange.
Some traditional banks are catching on. JP Morgan have launched the Chase app, a hybrid between the old-school bank you trust and the fun feature rich tech bank — offering tools like round ups, and enticing people with generous cash back on all purchases.
All these new challenger banks and “money apps” are fundamentally changing people’s relationship with their money. People are more involved, more engaged, more interested in the differences from bank to bank than they have ever been in the last 100 years.
To younger generations, their techy banks are less about how to pay for something, and more about how to split the bill convienently, how to spread the cost of a fancy new purchase interest free over three months, how to get approval for a loan in one second flat, how to keep track and budget towards niche savings goals, how to avoid the whole “getting currency out abroad” faff, how to stake the latest crypto coin, and how to fractionally buy shares in a company they could never afford otherwise.
What about a different approach?
But maybe there’s more to it than just showing off new features. We’ve got X and your current bank only has Y is a very banky way to get people to switch. Sure it might work for some, but will it really cut through the shackles of a 10, 20, 50 year relationship?
What if there was a way to make people switch that wasn’t just — logical. Can bank brands tap into emotions and make human connections with people in a way that seems a little less like… well… like a bank.
Change is happening.
Younger generations are far more likely to change banks than at any other time previously — swayed by technology, thoughtful, easy to use features and modern, non-corporate bank speak. But despite that, traditional Banks are still winning the fight for the population as a whole.
Challenger Banks should look to new ways to cut through to people, just using feature-rich apps might not be enough to get people to hang up historic brand loyalty.
Yet, at the same time, Traditional Banks should look to new ways to grow their offering and communicate it impactfully — so that when asked “What has your bank done for you lately?” The answer can be an empathic: “Lots, actually.”
