Khloe more important than Australian banking?
Sometimes when your being interviewed you get asked a loaded question.
On Friday I was asked by Andrew Robertson, of ABC News The Business, if the Australian public really cared about the Royal Commission's review of the Australian banking system. I said that the general public were more likely to be interested in Khloe Kardashian's baby daddy having an extramarital affair than the Royal Commission into the Australian banking system.
I said this because the reality is that most Australians don't care as much as they should. Most look at the Royal Commission as the government doing their job, making sure that the banks don't 'rip them off' and, if someone has done wrong, they are tossed out of their 'overpaid' jobs. There is well founded belief that 'one bank is the same as the other' from their perspective.
The water cooler talk in most offices last week probably focused more on who is the new Bachelorette, the impending Royal Wedding between American Meghan Markle and Prince Harry, who is going to win MKR or The Voice and a number of other popular culture topics.
It isn't because we don't like money or that we don't care if our banks are safe. It is just that many don't understand enough of what is going on. Most people think the 'guys at the top are overpaid' and it becomes a tad 'boring' for the average person so the switch off factor is high. Keep in mind that this is an industry where the Big Four Banks continually have some of the lowest customer satisfaction levels in the category and yet they retain their customer base.
According to Roy Morgan Research, the percentage of people banking with a big four bank has been maintained but the top five banks with only Westpac experiencing a 2% decline amongst those that say they bank with them.
It is the customer owned banking sector that has the highest customer satisfaction figures but this is not evident in customer retention figures overall. A third less customers say that they bank with a credit union and more than 50% less say they bank with a building society than they did 5 years ago. Why?
When I ask people they continually tell me that they know they should shift to a credit union, mutual bank or building society but it is just too hard to make that switch. The reasons vary from 'I don't have a branch in my area' through to 'I can't be bothered setting up my payments again'. The customer owned sector have also been impacted by mergers, acquisitions and a trend towards their members becoming 'mutual banks'.
So let's go back to Andrew's original question ... what should the big four banks do to repair brand damage? Well, in my opinion, they need to do very little. The bank that holds their own counsel, learns what the commission has to hand and then comes clean in one statement with the actions they have undertaken will fare better long term than those acting on an ad hoc basis. At the same time their management and marketing teams should come up with new positioning to help set the bank up for the future which should be able to be believably reflected across all areas of their business. A new strap line to embrace the bank's new positioning should be developed and launched as part of a campaign that filters through all layers of the bank, internally and externally.
Will the public care? Not really, particularly if there is no change for them. Will the public engage with any new brand campaign? Some will. Will the public move their accounts en mass to a more honest bank? Not unless there is a substantially better offer at the other bank ... like a free car with every account opened, no strings attached. Will the general public still complain about their big four bank that they stay with? Yes.
To read Andrew's full article you can click here.