Know your customer

For decades, most banks used geographic proximity as their primary calling card and it worked fine – until it didn’t. Consumers have been finding their way toward alternative banks with little or no physical presence, and the growth in non-financial accounts seems to have come at the expense of both regional and community banks. This shift is even more pronounced by age: younger consumers are even less impressed by physical branch presence, and they are even more open to alternative providers.

Some financial firms will use this shift to dig even deeper into their local roots and find ways to make their branch presence meaningful to a profitable segment of customers, but it will be an uphill battle. We believe that, for most banks, the alternative – pursuing a well-defined customer niche with a relevant offering, without regard to geography – is a useful defensive strategy and an opportunity to grow.

Leading banks have been seizing the opportunity to package trusted advice and convenience through solutions rather than products. These solutions are:

Tied to affinity groups, a particular industry or a particular behaviour.

Specific and specialised, and purposefully broader than just financial products and services.

Offered nationally through marketing that targets well-defined groups of consumers.

Often delivered through strategic partnerships.From ‘Digital Banking Consumer Survey‘, PwC