As the old adage goes, turnover is vanity, profit is sanity, and this is no better exemplified than in the sector busting profits recently announced by Virgin Money. The Financial Times (29th July, 2015), reported the Bank’s profits surged by 37% on the back of significant growth in mortgage loans. As Bank CEO's struggle under the weight of rising costs and falling profits, what insight can we give to help Banks get their ‘slice of the pie’?
Every market has a different requirements, as does every Bank. What works in London, may not work in Mumbai. In an over crowded market, where Banks are struggling for market share, the only weapon they have in their armoury is to differentiate themselves through engaging, relevant and personal customer experiences - and this is what Virgin do brilliantly.
It has been argued that Virgin is already a strong, known brand, and that equity from this has simply been transferred to Virgin Money to bring success. There is some merit in this observation, the Virgin brand has a reputation for doing things differently, they are bold and challenge the paradigm, especially when it comes to customer experience. They stay connected with customers in a way customers want and their businesses reap benefits. However, for Virgin Money, it was not enough to bathe in the glow of Virgin’s brand equity and hope this will make a success of a new venture. New businesses need to do something different, make their mark and own a territory in customers minds.
Virgin asked allen international to help them totally redefine the whole Banking experience - from end to end and the resulting Virgin Money brand has skilfully moved financial services customer experience to a whole new level. Customers do not ‘Bank with Virgin’, they are ‘With Virgin’… and this means that as with other iconic brands, the organisation has positioned itself as a lifestyle enabler and not as a transaction based box shifter.
With their paradigm busting, universally acclaimed Virgin Lounges, they have redefined the Banking experience to such an extent, that their Banks no longer feel like Banks. Gone is the old austere, rather dirty and depressing image of Banking, to be replaced by a totally new experience which importantly, gives customers a reason to visit the Bank. In fact is gives customers lots of reasons to visit. With their ‘Lounges', the brand positioned itself at the heart of the community, the ‘Lounge’ is a place for relaxing, entertaining, working and… Banking.
So what is stopping other Banks taking this lead, distilling what really matters to customers down and creating their own unique experience? Why are the majority of Banks still producing boring, ‘dental surgery’ style branches that look ok, but have no brains behind them? No planned customer journey and therefore no reason for customers to visit? We can only speculate about the reasons. Perhaps it comes down to a fear of change, a perception that customers do are not ready for something new, maybe some Banks are run by old style leaders who would rather stay within their comfort zone, doing what they know rather than something that really challenges the paradigm? Perhaps it comes down to cost or the perception that the future is a fully digital world with no bricks and mortar?
The reality is that none of these strategies are the strategies of the successful Bank of the future. The reality is, if Banks do not change, think differently and create meaningful, personal experiences that are authentic to their market - like Virgin did in the UK, they will loose because there are new Banks all over the world who are brave, who realise that investing in creating something authentically special for every customer is the only way to win.
The time for change is now. We hope to see a paradigm busting Banking experience appearing in Mumbai, Manila, Karachi, Lagos, UAE and Kuwait… Banks must be brave, they will not loose, they can only win… if this is done right.