By Troy Kohut
Consumer attitudes to financial service products are changing, driven by the emergence of new competitors in the market and the significant impact changes in technology are having on how we engage with money more broadly. This disruption to the traditional landscape has given consumers more choice than they have ever had and is making it increasingly easy to access alternatives. The advent of open banking rules and the ability for consumers to take their data with them as they shop for better products and services will continue the erosion to the concept of ‘main financial institution’ which in turn will change the way banks talk to and engage with consumers.
The financial services industry needs market research that focuses on why and how consumers can and will choose a bank, or many banks, in the future. Traditional measures tracking awareness, satisfaction and NPS will become less salient in a market where consumers understand that it is not as hard as it once was to change financial service providers and where they can easily shop around for the services they want. There is a distinct generational divide in these changing attitudes to financial services. Most Boomers still use banks in a relatively traditional fashion, relying on an MFI for core products and services. Younger generations, however, are more interested in online services and apps, where flexibility is more important than established stability and each product, is selected based on its value and suitability rather than who the provider is.
In this rapidly evolving market, research is an important foundation stone. Beyond measuring customer satisfaction, it is a key tool in understanding customer loyalty and sentiment, journey and repertoire, product innovation and UX. The right research will help you to understand why and how current, potential and lapsed customers engage not just with your brand but with other financial institutions and service providers and support you to build a full understanding of what is an increasingly complex consumer market.
To meet the challenges of a market that is more fragmented and more dynamic, financial services must borrow research tools and strategies from FMCG and Technology markets that address the increasingly fluid nature of financial services decisions made by consumers and the rapidly evolving technology that allows this. Using techniques like mobile qualitative research and video ethnographies, alongside focus groups, in-depth interviews and a range of rapid response quantitative survey types will provide greater agility and responsiveness to the changing attitudes and motivations of consumers.
Historically, financial services providers have relied more heavily on large scale quantitative surveys to track awareness, satisfaction, main financial institution (MFI), advertising, etc. All of these are valuable metrics that should be tracked. However, they are reactive measures and do not lend themselves to supporting quick product development cycles, responding proactively to changes in the market landscape or moving to address shifts in consumer sentiment. What is needed here is a combination of agile qual and rapid response quant using a range of available and emerging technologies in areas like social listening platforms, apps and chatbots, market research insight communities and micro surveys.
1. Agile Qualitative Research: To get fast impressions and understand GUT FEEL as opposed to lengthy deliberation of ideas, concepts and prototypes. The goal is to deliver quick feedback on raw ideas, offers, benefits or messages allowing a quick initial assessment of how well they resonate with current or prospective customers and, importantly, how a customer is likely to respond to them. Quick ‘wash-up’ reporting gives almost immediate feedback that can be used to develop the concepts being tested quickly as they move along in rapid succession sprints. Agile qual comes in several forms including depth interviews and short, single-topic focus groups, leveraging online technology to find and engage the right people more quickly than traditional means might allow.
2. Rapid Response Quantitative Research: Rapid response surveys are short and to the point. They are intended to be focused on a very limited range of topics and are intended to be device agnostic allowing convenient response for the user.
3. Micro Surveys: Micro surveys are just that, short simple 2-5 question surveys that can be conducted with consumers on the run. Mobile or app-based technology means that the survey can be conducted with minimal interference and maximum impact in busy lives.
4. Chat Bots: Using a chat bot as part of a website or integrated into an app allows a consumer to answer questions relevant to the task they are currently performing, at the time they are engaged rather than as a follow-up day or weeks later. Like micro surveys, using a chat bot must be short and to the point so as not to interfere with the task as user is trying to accomplish.
5. Social Listening and Text Analytics: Look at qualitative data from a variety of sources including social media, online reviews and direct customer feedback in a quantitative way. Unlike traditional recruitment, this technique allows you to analyses open ended data from reviews, surveys or data already collected in house (as opposed to views from people on research panels) to determine and size what emotions are felt. It also helps to identify contradictions in expressions, uncovering consumer tensions and opportunities for improvements.
6. Jobs To Be Done Frameworks: To understand the higher purpose for which customers buy rather than the product or service. For example, they want to hang a picture not hammer a nail into the wall. Consumers are loyal to the job to be done, not the solution they use. The framework is predicated on knowing what the job the customer wants to achieve is and how we can help them RATHER than focusing on what they want to buy. This is an agile approach: we need a phase upfront to define the market, uncover needs, and then quantify or verify where needs are being underserved or overserved. That’s where we can discover opportunities and produce a solution that wins in market.