Author: Mikko Kähkönen, Global Head of Card Products, Giesecke+Devrient
July 26, 2022
During recent years, global brands have been resonating well with consumers to such an extent that they have become a way of life. Last year, Apple’s brand loyalty reached an all-time high of 92 percent, as the tech giant focuses on delivering unique customer experiences and on the promise of continuous innovation. As such, like-minded groups of people identify with the company’s purpose and vision, naturally becoming strong advocates. Financial services can use this positive word-of-mouth as another form of marketing to build up, interact and grow from their own evangelistic community, similar to how technology businesses have benefited from this growth in the past.
Lifestyle branding has been growing among younger generations like the digital native Gen Z as they favour self-expression and listen to influencer recommendations. While advertising and TV shopping defined the pre-social media era, it is the social influencers who are shaping the purchasing decisions of the new generation, with the market growing from £1.7bn in 2016 to a staggering projection of $16.4bn this year. It might not be surprising that the finance world is looking to tap into this trend. Branding expert Apple has even ventured into this space by introducing a one-of-a-kind titanium credit card to allow consumers to benefit from individuality in their lifestyle. With the customer experience front and centre of these strategies, how do banks and fintechs venture into lifestyle-based banking?
Design is key
It is important that banks and fintechs focus on a holistic, engaged approach that improves the customer experience, and there are plenty of examples out there of a successful strategy that puts the customer front and centre. Monzo is one example of an app-based challenger bank looking to disrupt the traditional way of banking, as the firm places a key focus on its customers’ requirements. Its super-colourful bank card means it has a distinctive look. The bank’s head of design, Hugo Cornejo, described this as an intentional move to grab people’s attention and create a discussion when handed over to make purchases.
This strategy is reflective of a brand that truly understands its desired customer base. Understanding the motivations of consumers will enable banks and fintechs to select the right design elements for their bankcards, as these are the physical symbol for the lifestyle they promote.
This is just one instance of how a card can amplify someone’s lifestyle. The design could reflect exclusivity, innovation or sustainable practices for customers that want to support green initiatives. For example, a metal card is resilient against fast-paced lifestyles; it is defined by its longevity and ultra-sleek design. Eco-cards made of 100 percent recycled, ocean-sourced, or bio-plastics can also resonate with environmentally conscious consumers, which is particularly crucial as a 2020 report discovered that 73 percent of Gen Zs were willing to pay more for sustainable products. A further study also revealed that nearly 90 percent of Gen X consumers would be willing to spend 10 percent extra for more sustainable products.
Apart from design, communication to consumers is critical, with social channels now a crucial medium to spark conversations with younger customers. As an example, the launch of digital US bank Step was promoted on TikTok by leading influencer Charli D’Amelio and achieved support from celebrities such as the rapper Nas. For younger consumers who do not have an interest in finance, harnessing the power of social media and influencer marketing will help to resonate with their interests.
Alongside impactful and sustainable bankcards that can also be personalised to reflect the tastes and personal interests of the consumer, digital applications will allow for effective online experiences as part of a combined ‘phygital’ approach, where digital and physical experiences are brought together. This will be critical as more consumers decide when they want a physical or digital touchpoint, with the banking situated where the customer is.
Embracing a holistic approach
For banks wanting to create a successful lifestyle brand, the key lies in fully understanding their consumers and boosting the user experience by taking a more holistic approach. The most successful banks understand their customers’ aspirations, speak their language, know where they ‘hang out’ online, and offer them personalised and unique products and services that resonate and are instantly recognisable. Effectively utilising data at hand could certainly help with seeing valuable customer insights, their behaviours, motivations and interests. The subsequent building of a strong image, targeted products and use of relevant personalities will place banks and fintechs in much stronger positions to attract new customers and ensure their loyalty and advocacy moving forward.