Technology has changed the way customers select and interact with financial services. It also presented them with a sheer increase in consumer choice. The one-size-fits-all model, in which customers are divided up based on how much they earn, has become obsolete with the rise of open banking, so it’s time for banks to look into today’s emerging tribes in financial services and their expectations.
We carried out a global online research called ‘The financial tribes you need to know’ and surveyed more than 4500 people who have a bank account to find out common traits that will be the key banking trends in the coming years.
Here are the five banking tribes of today:
- Ethical bankers - one of the fastest growing tribes and with the loudest voice. These purpose-driven consumers want to make an impact on society and the environment and want to see their banks do the same. They value purpose over profit and are happy to pay a premium to support communities or help the environment.
- Convenience cravers - often time-poor, consumers from this tribe value ease of use and are happy to pay for a hassle-free experience. They are likely to use super apps like Alipay or Revolut.
- Techcelerators - tech savvy, home-owning, slightly older consumers who manage their finance online despite banking with traditional banking institutions and sometimes using cash for some services. At 33%, this is the largest tribe globally.
- Covidpreneurs - people who started their business during the pandemic belong to this tribe. They value online, easy-to-use banking services for businesses that are always on and cash-free.
- Neo-asset hoarders - people in this tribe own cryptocurrencies like Bitcoin or Ethereum, they purchase NFTs or invest in gaming companies. They feel priced out by traditional assets like property or bonds and want their banks to support sale or management of neo assets.
One of the most striking findings is that the new audiences are not only defined by financial behaviours, but share core values and way of life. Technology has also changed the way these people interact with their finances: they can manage their transactions entirely on their smartphones (N26) or interface with non-financial companies thanks to BaaS infrastructures (Solarisbank).
In order to keep up with the demands of these new consumers, banks need to rethink how they engage with their customers in order to retain their audiences and attract new ones.
Thinking about tribes, what would a bank focusing on yoga teachers look like? How could they tie together financial health and physical health? What about a bank for crypto holders, one that can also create a community around a commodity? Or can banks provide cashback in exchange for reforestation projects?
These are only a handful of examples of how a financial institution could gain loyalty just by being focused on a tribe. Thanks to customer centricity, we have already experienced digital revolutions in communication, travel and entertainment. Are we in the midst of a tribalism revolution in financial services too?
Belonging to a tribe is nothing new. However, what is new is the fact that by being tied into one gives consumers more power in shaping the world of financial services around their personal needs or beliefs. The pressure is now on for financial institutions to show how they can deliver on ethics, efficiency, and digital innovation.