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It felt like power structures had shifted when retail investors organised themselves on Reddit to collectively buy GameStop shares, forcing the share price to rocket and hedge funds with big bets against the stock to bail out with huge losses. Then, of course, the price plummeted back down to earth.

It seemed inevitable that blood would be spilt on both sides, but whether you think the hedge funds had the last laugh or the retail investors had the first, the bigger, more important, point is that there has been an awakening in the retail investor community. An awakening to the fact that the financial system is stacked against them. An awakening to the fact that they now have the technology at their disposal to self-organise and stand together. An awakening to the fact that there are businesses out there offering individuals new ways to manage their finances that are much better aligned to their needs and values.

Tomorrow’s customers will demand more from their banks

It’s the inter-generational nature of the saga that retail banks should be focused on, because the Reddit army of today are their valuable customers of the future, and they’re turning to unbundled alternatives like the Robinhood trading platform in their droves.

It used to be enough to let loose a stampede of stallions on a beach and tell customers that you’re by their side. However, to win the hearts and minds of today’s customers you have to actually be by their side – offering them the digital experiences that genuinely improve their lives.

The opportunity is significant – according to The Future of Money Management report, only 18% of retail banking customers are actively investing anywhere. But some 78% of retail customers would be interested in receiving investment advice from their bank. 

Creating the banking experiences of tomorrow

The first wave of new businesses providing unbundled investment services was built upon the lure of lower fees. Robinhood, Freetrade, Revolut and many more offer commission-free trading – then there are companies such as Indexa Capital, which offer index tracker funds that boast 86% lower fees compared with most banks. 

However, we’ll reach a tipping point when all the established retail banks have finally wrestled their legacy systems to the ground and have created frictionless mobile banking experiences that are all competitively priced. In this scenario, the brands that win will be the brands that seek to create value perceptions that run deeper than price alone.

Understanding what customers value

At Rapp, we have been analysing the evolving meaning of value in culture for over eight years now. Through a series of semiotic analyses, qualitative research and quantitative studies, we’ve been able to explore and understand what ‘value’ means to different customer groups across different contexts.

We’ve identified five value levers that can help brands drive value perceptions in the modern world. The first is control, but specifically about handing back control to customers. The second is how brands help customers navigate choice. The third is about tapping into a strong sense of community. The fourth is ensuring that you’re creating convenience for your customers. And the final one is about talking with clarity.

If we consider these five value levers in the context of the traditional banking experience, I would argue that none of these value levers are properly addressed. To the customer, it feels like the bank is in control and that financial products are hard to navigate, confusing and difficult to access in many cases.

Creating digital banking experiences that customers value

The success with which you can bring the five value levers to life will be down to how you combine technology with humanity, and there are some great examples of challenger brands doing so very successfully.

Take Albert, a challenger bank in North America that offers mobile banking, savings and investing in one place. It blends these self-serve solutions with easy access to human expertise as and when it’s required by the customer.

Another interesting example of a company providing financial services that combine technology and human expertise is Darwinex, which allows traders to monetise not only their trades but also their strategy and performance. Top traders receive a flat percentage of the profits made by their ’followers’.

Alternatively, take a look at Bunq, a Dutch bank that appeals to customers on a sustainable level – by helping them save time, money and CO2, which it achieves through tree planting, sustainable investing and by offering a metal card.

All three examples combine technology with humanity in interesting ways that ultimately realise our five value levers. They all put the customer in control, make choice easy, create a sense of community and have slick human-centred design that makes everything feel intuitive.

Making great banking experiences exceptional  

If banks want to really differentiate themselves in the future, then they need offer their customers truly original and, critically, useful functionality that goes beyond what every other bank will be offering in the very near future.

Take Dyme, another Dutch company that uses access to all your bank accounts to compare how much you pay for electricity, subscriptions and all kinds of fixed costs that you often lose sight of. It not only tells you when you’re paying too much, it also renegotiate all the contracts and subscriptions for you. Any retail banking customer unfamiliar with Dyme will be reading this thinking, ’why on earth does my bank not do this for me already?’

Another example is Parent Pay, which facilitates payments between schools and parents, taking the hassle out of paying for trips, clubs and all the other bits that come up throughout the school term. It also has an app and a pre-paid money card for children that is designed to help them develop good money habits and provide them with basic financial education. Again, a very natural space for traditional banks to play in and add considerable value to their customers’ lives.

Technology alone is useless, it requires a human touch

Blending technology with human understanding will be the key to creating the exceptional banking experiences of tomorrow – experiences that customers truly value. Brands need to ask themselves if they know what their customers value today and consider whether tomorrow’s customers will value the same things.

Richard Colvile, senior strategist at Rapp UK.