3 Marketing Strategies Banks & Credit Unions Can Lift From Neobanks

A slick user experience is mandatory for any successful challenger bank, but underlying the technology are three cultural principles that are a key reason for the success of these companies. Though deceptively familiar and easy to talk about, these principles are hard to implement.

Challenger banks are swarming the industry battlefield of financial services, winning mind and market share from incumbents. In many cases, it’s the product and user experience that’s driving their growth. But usually these challengers also deploy a different strategy and set-up in how they go to market as well.

Part of the reason their marketing is more effective and efficient is because they are new. They don’t have any legacy systems or culture to compete with. But if you boil down what they’re doing, the principles and practices don’t require you to be young and small — they can be applied to any financial institution.

There are three things that successful challenger banks do differently and better than incumbents that helps drive their hyper-growth.

Challenger marketing is:

  1. Purpose-led.
  2. Customer-centric.
  3. Insight-driven.

Here we look at how challenger banks make these three core strategies come to life.

1. What Purpose-Led Really Means

Being purpose-led isn’t just about having a brand strategy. It’s about bringing a brand to life internally and externally through the stories you tell and the actions you take.

The most successful financial brands (big or small), are the ones that have a clear, consistent brand purpose that comes from who they are already. They don’t need a big, fancy creative agency to come up with something completely new. Their purpose flows from within outward, not the other way around.

Having a purpose that’s true to who you are means your people will be more “bought into” it, and you’ll be able to more naturally and sustainably act on that purpose with your external marketing. The word “act” is used intentionally. It’s not enough to talk about your purpose, you need to live it.

Most don’t. Havas Group found that 75% of brands could disappear tomorrow and people wouldn’t’ care.

Make your brand meaningful to consumers. Make it have an impact on the things they care about and they will care about you. Challenger banks deliver on their purpose and have an impact on the conversation or cause they believe in. Varo Bank’s tagline is “A bank for all of us.” Sure, that sounds great, and maybe your tagline does too. But Varo’s is great, once you see how much they’re actually doing in the real world to make it happen.

The Takeaway:

How much of an impact is your institution’s marketing having on what you say your purpose is? Make sure there’s no gap between what you promise and what you deliver.

2. ‘We’re Customer-Centric. No, Really’

Being customer-centric is one of those things that every financial institution talks about but few do really well. As a group, challengers are very good at being customer-centric in how they think and act in their marketing. Habito is a great example. Take a look at the U.K. company’s “about us” page. Their entire story is about fixing the pain points of the average mortgage customer (putting an end to “mortgage hell”).

Good marketing in any organization is about making the company more customer-centric, but it seems many financial institutions lose sight of that as their marketing practice scales.

Get back to basics — put the customer at the center of everything you do. This is more of a cultural change than an operational one. Make the customer the start and end to any conversation you have internally.

Find fun and engaging hacks to remind people they need to focus on the customer. At 11:FS we have a monthly session with our marketing team where we step into the shoes of our customer and experience our brand and business through their eyes. We click around on our website, we search for relevant terms, we watch and listen to our content.

Or you could take a page from the Amazon playbook and always leave an extra chair (or Zoom window?) in every meeting to represent the customer.

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3. ‘What Insight Are You Working On?’

Being insight-driven is about making sure there is a human truth at the root of everything you do. In our client work we used to say “data-driven,” but data is a means to finding insights that you can use to do something new or differently. Everyone talks about data, but it’s the insights that really matter.

A Simple Truth:

It would be better to have less data and more insight than the other way around.

The best brands and marketing campaigns are always ones that are based on a profound, relevant and differentiated insight. Challenger banks are great at finding these insights in the data and using them to shape their brand-building and business growth initiatives.

Part of the advantage they have in this area is they are closer to their customer because they’ve built communities around their brand. Their marketing teams are spending time listening and interacting with customers, which is where many of their insights come from.

Key Resource: Neobank Tracker: The World’s Biggest Database of Digital-Only Banks

Monzo is the challenger brand that exemplifies this principle the best. From the very beginning, they’ve had community.monzo.com where their customers can get help, interact with the business and each other, and (most importantly) post feedback and ideas. No doubt many insights have come from that community that have led to more effective product and marketing.

Think about how you can get more insight from the data you have, think about how you can get your team to spend more time listening to your customers. My favorite hack for this principle: Whenever someone comes to you with a new idea or initiative, always ask, “What’s the insight you’re acting on?”

You’ll find they don’t always know, which of course is the point! It will nudge them to start being more insight-driven.

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