It’s easy to see that the pandemic has had a significant impact on consumer behaviour regarding retail banking and how they value both products and services. Individual organisations have felt some pressure to reinvent their operations based on consumer demands. But what does the actual data say about the overall industry?
Using natural language processing and data analytics on consumer review data of over 58,000 data points, Delta Capita has identified key trends across the sector. In an increasingly commoditised and competitive marketplace for retail services, reacting to these themes can allow you to remain competitive and capture market share.
This blog will review the most common themes, discuss the importance of monitoring sentiment, and how Delta Capita can help you with your proposition.
Interpreting the changing retail banking landscape
Historically consumers have tended to stick to major institutions with little mobility. However, expectations regarding products have shifted and increased with the growing number of market entrants. We can see this by monitoring the reviews and topics raised by consumers, who have left more feedback recent years.
This trend further accelerated with consumers during the pandemic, with the highest quarterly reviews for Retail Banking on Trustpilot (2019-2021) in Q1/Q2 2020. That timeline overlaps with the first UK lockdown. Unsurprisingly the main topics included apps, customer service, and ease of use, with a drop-off in mention of abroad use.
We would suggest this resulted from the shift from in-person services to digital channels. The abrupt and total change had a compounding effect on many banks who had relied previously on minimal digital interaction. They initially had consumers registering complaints manually, which revealed further issues with customer service when the banks attempted to resolve issues.
Interestingly, despite the minimal opportunities for in-branch services, we have seen a consistent upward trend of mentioning “account setup.” This suggests that consumers have continued to view services as interchangeable. When combined with the general increase in reviews across lockdown, this indicates that revenue shifts have occurred, with banks that had already invested in their digital offerings reaping the most benefits.
Realising the importance of monitoring sentiment
Despite the crowded marketplace, it does appear that when a brand does well, consumers do go to efforts to acknowledge this. The overall average of the sector in 2019/2020 was around four stars, although the averages per institution varied significantly.
This churn has resulted in lifting star ratings for banks. One example is TSB Bank, which moved from a poor 2-star average to over 3-stars within a year due to usability and online banking improvements.
We’ve written previously about how the pandemic has provided an opportunity to shift their market perception with consumers, and the data points support this. There is a compound effect where other consumers appear to be switching to products with improved reviews. Therefore, we can see that the sentiment data acts as early feedback on critical propositions before gaining momentum from a revenue perspective. Additionally, these trends can help reinforce existing business cases for investment and testing out new products or services by providing a live test of market reaction.
Despite the generally positive sentiment across the sector, institutions always need to continuously improve and not become stagnant. For example, some banks have seen a drop from 4-star to 2-star average in the span of 12 months.
The fact that customer reviews can also reduce a bank’s standing further reinforces our earlier point that consumers are no longer loyal to brands (particularly the heritage banks) as there are many quality products on the market. In line with our above points around the value of monitoring positive sentiment, recognising such trends early on can allow you to embark on a corrective course before it starts impacting your revenue. This is especially true for the topics mentioned most in negative reviews, such as customer service and call centre experience.
Improving the resourcing and capability of customer services functions is a comparatively easy win and can be implemented before a trickle of bad reviews leads to a shift in customers.
How can Delta Capita help?
The pandemic has accelerated existing customer trends towards valuing digital offerings alongside exemplary customer service. Consumers are increasingly mobile, and therefore monitoring these trends is key to ensuring relevance and proactively mitigating customer concerns.
At Delta Capita, we can partner with you to help identify areas for improvement based on consumer insights and ensure alignment with industry peers. In addition, we can place perpetual monitoring to ensure you can proactively identify shifts in opinion, monitor new product launch reactions, or identify gaps in the market of new offerings for customers.
We can use multiple data sources to gain a rich view of the customer, whether that’s publicly available review sites or internally gathered data, to create a complete picture of the customer. This data-driven approach can direct where we should focus our efforts, spend, and attention versus where the competition should be.
Finally, where there are clear breaks identified in your customer journeys from the data insights, our digital team can work with you to audit those journeys and improve them to be differentiated, market-leading offerings that will not only retain your existing customer base but attract new ones. Contact us and speak to on of our experts today.
Alex Zaiac – Principal Consultant
Sarah Carver – Head of Digital