Can Banks Change Their Customer’s Life?
In 1950s Turkey, families living in rural areas started to migrate to urban for an easier life, better education, electricity, water etc. Istanbul became the epicenter of many migration stories. Several famous writers, novelists were nourished from those people memoirs (some of them narrated their own history) in the last 50–60 years. The migration created many notable anecdotes. Some of them are about success and adaptation, some of them are about urbanization, cultural transformation etc. Most of you know the famous book ‘Empire of Cotton’ written by Sven Beckert. One of the striking aspects for me on this book is, affiliating human life, human stories with economic developments. For example, according to Beckert, cotton’s first serious incursion to Europe, as in West Africa was the result of the spread of Islam (By 950 CE, cotton was manufactured in such Islamic cities as Seville, Cordoba, Granada, and Barcelona). In Later stages, Manchester would be the manufacturing center of Cotton industry across the globe.
Recently I have been reading books or articles mostly relevant to human stories. Regardless of being a history book, marketing, or psychology article, they have a common ground which is having coherent human stories. Apparently, when there is human element that means there is a big possibility of having productive stories or vice versa. What I realized that whenever an abstract, a text which cover human stories it grabs my attention and encourages me to read it. David Aaker calls it as signature stories and backs them as tools to convey overall branding strategy. Rationalist people such as economist Nassim Taleb calls it as narrative fallacy to explain how flawed stories can shape our future with bad decisions. Nobel Laurate Phycologist Kahneman puts it under system 1 approach and explains how it makes it easier to convince people with halo effect. Regardless, stories make people to be convinced without too much thinking or keep the attention alive and energic while conveying the message.
Since more than a decade, banking sector, consultants in reputable advisory companies are working on the migration of bank customer from physical channels to digital meanwhile there is a big progress on this area. There are fully digital banks launched across different part of the world already. Nu Bank in Brazil is a good example for such a bank which was started to be listed in NYSE in December 2021 with valuation of 40 billion USD. Due to this reason, I will not explain why the Digital Banks are important, why it’s needed etc. I just would like to focus on the stories being told by each major successful digital bank launched in last decade since it’s also a migration story by some means.
In summary if there is a migration of humans there are great stories because of the change. According to Aaker a signature story pops in a few dimensions; Beyond being intriguing, authentic, and involving, having characters that we can emphasize, a meaningful challenge, an emotional connection high relevance and professional presentation. In the era of the digital marketing, of course, the dimensions need to be leveraged with a strong content.
According to Trust Pilot, there are 60 Neo Banks in the USA, and Chime is highest rated Neo Bank among them. There are also 35 Neo Banks in the UK and 33 Neo Banks in France. Obviously, number of Neo Banks already exceeds hundreds in global financial market. To do a brief overview of those major Neo banks as per approach above, I reached following list: Nu Bank, Revolut, N26, Chime. I selected brands based on their rating score and number of ratings. Of course, if you do a search for Neo Banks, you will see very well-constructed comparisons based on different dimensions. Since my objective in this take on is to investigate their change stories and see whether there is a signature story behind their success, I skipped this part with assumption that they have already a well-designed value proposition for their target audience.
Nu Bank: It’s obvious that Nu Bank focuses on new generation and low income communities to motivate them for controlling their own financial life. The story of the Nu Bank has an authenticity in terms of their passion to put people at the center of their communication and have a positive social impact on their life. The challenge for Nu Bank is creating emotional connection with people who are not connected with financial system adequately due to traditional banks fees. The community approach and financial control to save money is always at the hearth of their story. In Nu Bank, characters of the story are ordinary people who are trying to survive their life and change their life to better. This is already a challenging starting point for a financial corporation. Nu bank has high relevance and professional presentation when conveying the message. Supporting entrepreneurs, innovative outdoor activities with communities is also convincing to show that they have helped to change their life in a positive way. Their community blog has a very rich content in terms of savings, crypto currencies, investments etc.
Revolut: Revolut has a wide set of payment options, transfers, currency exchanges including crypto currencies, commodities, donations etc. Having various options for people abroad to send money, split their bills, manage their money transfer expenses is their strength. Revolut’s challenge is to become a super app for their customer’s money management, perks, and investments. So, the character in their story is mainly young professionals across the Europe and other countries who will travel frequently and transfer money to his country as well. In Revolut’s case its seen that they are focusing on social causes to create the emotional connection and convey their brand message via showing reaction to regional events such as wars, fires, refugee crisis etc. with donation campaigns. Emotional connection is highly relevant with their brand strategy and story. Revolut does not have human characters in their story enough, however they use their products to tell their story and fulfill their challenge in a consistent way. Instead of having a compelling signature story to grab attention immediately, Revolut has a range of new product and service as a tool to convince people.
N26: N26 is a full digital bank operates in Europe and based in Germany. N26 challenge is to manage account on the go, control the finances with confidence. N26’s story is becoming the worlds digital bank with a simple and transparent way. In N26 way, enabling customer to open account in different EU countries can be assumed as their signature story. It has similar features with Revolut when it comes to payment options. The characters of the N26 story are young professionals who would like to save their money and, in the meantime, enjoy their life. So, even during the spend they are trying to show that there is a way for saving. Offering saving money and managing accounts with simplest way is the story that is conveyed to their customers.
Chime: Chime promises their customers less fees and no hidden fees with basic banking services. So, they want to do profit without taking fees from their customers. Chime tries to keep their offerings simple and basic. On the other hand, they use real people with social media interactions to show how their life has changed with Chime. Their focus is encouraging young generations to save money and stay in touch with their community. Boosts feature enables their members to convey their message with an emotional way among their friends and families. For example, they highlight story of a nurse in a Covid-19 hospital during worst times as one of their real characters. Chime’s story has most of the dimensions that enables them to have a signature story. Their story is authentic, intriguing, and consistent with their branding strategy, despite their simple product offerings.
In conclusion, four Neo Banks who are preeminent in the financial technology have their own signature stories supporting their brand strategies in different ways. Although we don’t know at what extent they created positive impact on their customers life, changing their customers life with their products and services while migrating to digital is one of their key drivers. Changing the life can be connecting different countries under same account, saving money even while spending, boosting your friend’s overdraft limit via just one click, or including low income people in financial system to let them save their money etc. Finally, the question here is can a bank change their customer’s life and deserve to be a real signature story in their mind?
