Defining Digital Differences amid Financial Disruption

PayPal, TransferWise, Zopa and Fidor are nimble digital brands that are radically disrupting financial services. Alternative choices for managing money, including digital services, mean that retaining and rewarding customers in a way that reflects their personal preferences and motivations is more important than ever to ensure brand loyalty.

To help understand these differences and their impact on preferences for digital interaction when it comes to financial services, we recently surveyed 4,400 affluent middle class consumers (within the top 10-15% income bracket) in Brazil, China, India, Italy, Singapore, UAE, UK and US. This group is increasingly valuable to brands, as they have the ability to influence other consumers. The research identified four of the following global “tribes”, who share common traits across age, gender and international boundaries.

1. Prudent Planners, for example, are motivated primarily by family and altruistic goals.  This group will represent around two billion consumers by 2030. This significant segment continues to value face-to-face interactions as well as digital services, so retaining this as an option is key for this sizeable segment. 

2. Stylish Spenders represent 8% of the affluent middle class globally.  Over half of them are under 35 years of age, with 32% earning over $190,000 a year. This group, who figure prominently in China and the UAE, are most loyal to brands they trust. This category expects companies to know who they are and offer highly tailored offers and content. Banks should therefore look to build services with responsive platforms, as well as applications that provide access to financial services. 

3. Mid-Life Modernists stand out for their enthusiastic use of technology, with 90% spending more than five hours a week using their smartphone and 45% spending over 20 hours a week of their leisure time online via a computer.  In the UAE, 90% of consumers use their mobile phone for ten hours or more per week; and our research indicates a growing trend among consumers who use mobile applications for banking services (this is highest in India at 59%, 32% in the UAE). To target this segment, banks should ideally offer customer benefits such as lounge access, card assistance and insurance solutions on mobile applications and sites to ensure a truly omni-channel experience. 4. Experientialists want unique, ‘money can’t buy’ experiences and exclusivity rather than standard products and services. This group, which is prominent in China and UAE, loves spending on holidays, dining out and luxury foods.  This segment expects fresh content, regular updates and unique experiences from their financial service providers.

Our findings also showed that despite the differences there are certain commonalities that all financial services brands should consider when targeting these groups. These include:

Personalised service:  Around 47% of UAE consumers still feel that their bank does not know or understand them. When asked why they did not feel loyal to their bank, the number one factor cited was poor customer service; only 55% feel they receive a high level of personal service. Our research has found that customer engagement improves by a third amongst individuals who ‘feel understood’ by their bank and a further third for those who say they receive a seamless multichannel service – whether in person, by phone or via digital channels.  

Recognition and reward: Our research found that not being rewarded for loyalty is the biggest frustration for affluent middle class consumers, cited by two thirds of respondents globally, ahead of poor interest rates and charging unnecessary fees. Optimising digital channels to modernise how customers are recognised and rewarded is key to overcome this problem. 

Choice of reward to boost loyalty: Some banks still tend to think of rewards which relate to other financial services or points-based programmes. Experientialists, however, “live for the moment” and expect brands to offer unique experiences to maintain their interest; Prudent Planners appreciate rewards which they can share with family and also offer longer term gains. 

Simplified redemption:  Giving customers greater flexibility in how they access rewards will enhance the experience and differentiation of a loyalty programme. 

Real-time engagement: Social media and mobile services can help card providers offer real-time, tailored promotions and redemption at the moment of purchase online and in store. It also boosts customer loyalty and relations. In return, financial services providers can track spend, understand who their best customers are, and motivate behavioural change.

Our study also found that the affluent middle class is willing to reward organisations which cater for their personal motivations, and financial firms can cater to these at various points of customer interaction as long as there is value exchange for customer participation. Nearly three-quarters (72%) are willing to make a repeat purchase from a brand they feel loyal to; 70% would recommend that brand to friends and family and 53% will choose a particular brand even if it is more expensive – directly impacting the bottom line and driving customer loyalty. 

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