Enhancing customer experience and loyalty through online intelligence

RETAIL BANKING IN 2017 A Digital Marketing Perspective

Digital technology has been a top priority for retail banks over the past few years and continues to be a key success factor in 2017. The ability to interact easily with banks has become increasingly important to customers, as new disruptive players bring technology to the forefront.

In this report, we look at the top trends and takeaways for retail banks. We detail ways in which financial service providers can enhance their online experience and customer loyalty, through better use of competitor intelligence and customer data.

According to the Global Digital Banking report, the top 2 initiatives for financial institutions were: improving the digital experience and enhancing data analytics capabilities to identify customer needs. Over the past year alone, we have seen significant online growth among a diverse set of financial players, including: challenger banks, traditional retailers and financial aggregators.

Retail Banking in 2017 Report 3

State of the Industry

Introduction

Diversification of Players in Retail Banking Growth in 2016 YoY*

11% 10% 7%in visitors to challenger banks

In visits to retailers with financial services

In visits to financial aggregators

118%In visits to challenger, Metro Bank

23%In visits to

retailer bank, M&S Bank

26%In visits to

aggregator, uSwitch

Data Collection: Hitwise Intelligence. Sub industry and domain levels, comparing 2016 with 2015 yearly visits.

How has this impacted the retail banking industry?

1. Digitalisation of the banking industry Beyond simple payments, more complex actions are migrating online. The rise in searches around applications (such as credit cards and loans, which increased by 19% and 16% in Jan-Feb YoY), not only demonstrates growing consumer confidence, but also growing expectation for these services online.

2. Commoditisation of financial products The rise of financial aggregators has shifted how customers research and compare offers online. Whilst transparency has improved, brand loyalty has eroded at its expense. According to the UK Regulators Network, price comparison websites have also increased the risk of people buying products without full understanding of the key features.

3. More players, more competition Challenger banks have differentiated themselves by delivering targeted products seamlessly, particularly on mobile. Retailers with financial services have furthermore grown in popularity, as the likes of M&S, Tesco and Sainsbury’s, compete with unique offers (such as rewards credit cards).

In this report, we detail how banks can take a “digital first” approach in this highly competitive market. It comes down to the basics: developing a clear understanding of online audiences, and tailoring product and content to meet the customer’s needs.

Identifying online audiences in their research and consider phases

Audience Profiling by Financial Product

Optimising search engine marketing

Taking a Mobile First Approach

Understanding your ranking vs. the competition on financial aggregators

Influencing Market Share on Aggregators

1

2

3

Table of Contents

The need to optimise the mobile experience has never been more apparent than now. With the release of Google’s Mobile First Index* and Accelerated Mobile Pages**, website parity across platforms is absolutely critical. Whilst content needs to be aligned from mobile to desktop, search marketing should still take into account differing search behaviours by device, as illustrated below.

When we look at key action words that involve research (such as “switch” or “compare”), desktop is still the preferred platform, with a larger sum of search variations than on mobile.

Taking a Mobile First Approach

1

Search Terms

1

2

3

4

5

6

7

8

9

10

compare current accounts

compare bank accounts

bank account comparison

compare bank accounts uk

current account comparison

bank comparison

compare uk bank accounts

compare joint accounts

compare uk current accounts

debit card comparison

Desktop Clicks

1.8%

1.6%

0.6%

0.5%

0.4%

0.3%

0.1%

0.1%

0.1%

0.1%

Mobile Clicks

2.0%

1.1%

0.3%

0.3%

0.5%

0.5%

0.0%

0.0%

0.0%

0.0%

Total 5.6% 4.7%

Search Terms

1

2

3

4

5

6

7

8

9

10

switch banks

switch bank accounts

switch current account

switching banks

switch bank account

current account switch service

switch bank

switch accounts

current account switch guarantee

switching current accounts

Desktop Clicks

1.5%

1.0%

1.0%

1.0%

0.9%

0.5%

0.2%

0.2%

0.2%

0.1%

Mobile Clicks

0.7%

1.3%

0.5%

1.0%

0.4%

0.2%

0.3%

0.2%

0.0%

0.0%

Total 6.7% 4.7%

Searches with “Switch”

Searches with “Compare”

Data Collection: Hitwise Custom Intelligence. Based on a portfolio of 374 bank account search terms, from 4 weeks to 21-Jan-2017.

* Mobile First Index - Google will prioritise mobile-optimised content on their results pages and, for the first time, take a domain’s mobile version of a site as the primary source over desktop. ** Accelerated Mobile Pages (AMP) - Allows users to access content instantly within the search engine’s page and preview content without downloading on mobile device.

But when we delve into searches around opening a new account, mobile and desktop are almost on par. Key term “open bank account online” is also more searched for on a mobile device, pointing to a growing trend on mobile to perform more complex banking actions.

Search Terms

1

2

3

4

5

6

7

8

9

10

open bank account online

open a bank account online

open bank account online uk

opening a bank account online

open a bank account

opening a bank account

open a basic bank account online

what do i need to open a bank account

open bank account

opening a current account

Desktop Clicks

1.8%

0.7%

0.5%

0.4%

0.3%

0.2%

0.2%

0.2%

0.2%

0.2%

Mobile Clicks

2.7%

0.4%

0.3%

0.3%

0.2%

0.2%

0.5%

0.2%

0.4%

0.2%

Total 5.4% 5.3%

11

12

13

14

15

16

opening a uk bank account

opening bank account

open account online

open current account

online bank account opening

open basic bank account online

0.2%

0.1%

0.1%

0.1%

0.1%

0.1%

0.0%

0.0%

0.0%

0.0%

0.0%

0.0%

Searches with “Open”

Data Collection: Hitwise Custom Intelligence. Based on a portfolio of 374 bank account search terms, from 4 weeks to 21-Jan-2017.

There is also significant opportunity for paid search on mobile. For most bank account types, particularly debit cards and joint accounts, searches on mobile devices are mostly organic. Only when we get to more niche searches, such as children’s account and cash accounts, we find a high organic rate on desktop.

Track the differences in search behaviour and paid vs. organic rate on mobile, compared to desktop. Understand which terms are going to your competitors for which products and tailor content accordingly.

Top Takeaway

88%

60%

55%

54%

53%

44%

23%

12%

40%

45%

46%

47%

56%

77%

76%

79%

83%

87%

100%

24%

21%

17%

13%

cash account

children's account

general

current account

joint account

basic account

debit card

Desktop Organic rateDesktop Paid rate Mobile Organic rate Mobile Paid rate

Data Collection: Hitwise Custom Intelligence. Based on a portfolio of 374 bank account search terms, from 4 weeks to 21-Jan-2017.

Searches by Account TypeOrganic vs. Paid Clicks by Device

Desktop Split Mobile SplitBasic searches on mobile are mostly organic.

Whereas, niche searches (e.g. children) have a high organic rate on desktop.

105 104

97 97 94

113

96

104

99 92

102

123

< £20K £20K - 30K £30K - £50K £50K - £70K £70K - £100K > £100K

By Household Income

86 95

111 120

90 96 96

111 108

93

18 -24 25 -34 35 -44 45 -54 55+

By AgeAggregator - LN Index Bank - LN Index

Aggregator - LN Index Bank - LN Index

Audience Profiling by Financial Product

2

Banks have full visibility over their existing customers, but not necessarily their potential customers. A way to track online audiences in their “research” and “consider” phases is through search behaviour and page visitations.

We analysed people who searched for loans and visited loan pages to illustrate these audience differences. People aged 45-54 are most likely to visit loan pages on aggregators, as are people with the highest and lowest household incomes. But only the £100K+ group is largely over-indexed on bank sites too. This suggests that high income earners require more information than what is currently provided on aggregators, and potentially reliant on receiving detailed information on bank sites too.

Loan Visitors - Aggregators vs. Banks

105 104

97 97 94

113

96

104

99 92

102

123

< £20K £20K - 30K £30K - £50K £50K - £70K £70K - £100K > £100K

By Household Income

86 95

111 120

90 96 96

111 108

93

18 -24 25 -34 35 -44 45 -54 55+

By AgeAggregator - LN Index Bank - LN Index

Aggregator - LN Index Bank - LN Index

Data Collection: Hitwise AudienceView Intelligence, Visitors to top 5 Aggregators & top 5 Banks for Loan pages, 12 rolling weeks to 4-Mar-2017.

The extremes, lowest & highest household incomes, are also most active in visiting loan pages.

35-54 year olds are most likely to visit loan pages on aggregators and bank sites.

18 - 24

25- 34

35- 44

45- 54

55+

91

106

118

104

88

Business

85

100

129

123

78

Car

88

84

115

125

92

Personal

Compare your “researchers” with your “buyers”. Understand which audiences are converting and which ones are not. Ensure sufficient and differentiated information on your own site to target high income earners.

Top Takeaway

On the other hand, people aged 35-44 are most likely to search for business and car loans, whereas 45-54 year olds are the most over-indexed for personal loans. Compared to loans for younger segments, the top searches for these types of accounts are largely branded (such as: “Barclays personal loan” or “Natwest business loan”).

Loan Types - Over Indexed for 35-44 and 45-54

18 - 24

25- 34

35- 44

45- 54

55+

198

125

109

86

57

Student

142

114

107

102

74

Payday

Data Collection: Hitwise AudienceView Intelligence, Loan searches split by age group, 12 rolling weeks to 4-Mar-2017.

Loan Types – Over Indexed for 18-24 and 25-34

18-34 are most over-indexed for student and payday loans.

The specific types of loans also vary significantly by age group. Unsurprisingly, student loans are mostly searched for by people aged 18-24. However, so too are payday loans. These searches tend to be unbranded and related to “application” or “calculation”.

35-54 are most over-indexed for business loans, whereas personal loans are most over-indexed for 45-54.

Data Collection: Hitwise AudienceView Intelligence, Loan searches split by age group, 12 rolling weeks to 4-Mar-2017.

23%

20%

12%11% 11%

6%5%

3%2% 2%

Halifax MBNA Sainsburys Virgin Barclays Lloyds Bank of Scotland

Santander Nationwide HSBC

Top 10 Providers By Credit Card PagesInternal Market Share on a Leading Aggregator’s Site

Influencing Market Share on Aggregators

3The new year typically brings about a flood of new deals and offers, as bank providers try to take advantage of post-Christmas spring cleaners. Providers need to know how their products and brand are perceived on financial aggregators.

A way to do so is to track internal market share on financial aggregators. The below example showcases an example for credit cards on a leading aggregator, over the month of February 2017, tracked by bank provider and by credit card feature.

News deals have been issued by Sainsbury, Virgin and Barclays since the start of the year. However, it is Halifax & MBNA who are leading the way in terms of their internal market share, offering extensive 0% interest period on balance transfers (38-months and 43-months, respectively).

Top 10 Providers By Credit Card PagesInternal Market Share on a Leading Aggregator’s Site

Data Collection: Hitwise Custom Intelligence, Internal market share on a leading aggregator’s site specific to credit card pages, February 2017.

With banks releasing new credit card deals at the all-important start of the year, Halifax and MBNA has drawn the most interest on this leading aggregator.

Understand how your brand and products are perceived against the competition on financial aggregators. Track which features (such as “interest free period”) are actively searched for to inform your own product offering.

Top Takeaway

If we dig deeper into the credit card results, we can see how and why MBNA and Halifax are the top-ranking providers. MBNA was largely ahead for users searching for and selecting a Balance Transfer credit card. Whereas, Halifax ranked in the top 5 providers for a range of features, including: Balance Transfer, Low Fee and Purchase Cards.

Data Collection: Hitwise Custom Intelligence, Internal market share on a leading aggregator’s site specific to key credit card terms (Balance transfer, Low or no fees / rates and Purchase cards), February 2017.

Top 5 Providers By Key Credit Card Feature Internal Market Share on a Leading Aggregator Site

Halifax ranks in the top 5 for all key searched-for credit card features.

6.5%

8.1%

8.7%

9.9%

15.0%

Sainsburys

Halifax

Barclays

Virgin

MBNA

Balance Transfer

2.0%

2.0%

2.8%

3.5%

6.2%

Virgin

Barclays

Lloyds

Halifax

Sainsburys

Low Fee/Rate

0.1%

0.1%

0.3%

1.7%

2.3%

Santander

Bank of Scotland

AMEX

Halifax

Lloyds

Purchase Card

Key Takeaways

Optimise search terms on mobile vs. desktop, based on the different behaviours by device.

Track PPC on mobile vs. desktop to optimise your return on investment.

Identify who your online audience is by financial product.

Track the differences between your “researchers” and “buyers” across the customer’s online journey.

Track your market share on aggregators and understand how your brand is perceived against the competition.

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For Retail Banks

For more information visit us at:www.hitwise.co.uk