Banks are using slick marketing to attract custom but the public remains unconvinced. Upholding transparency standards must be the norm, not a distant ideal.
By Nicolette Chua, edited by Francesca Ross
Banks are becoming bolder in their product marketing campaigns. They are using publicity drives to give lucrative offers, rewards and conditions to customers that sign up for their credit and debit cards. The promotional materials behind these campaigns often failed to disclose what customers really need to know.
Consumers are doubtful about OCBC’s promise of full transparency
In April 2017, Oversea-Chinese Banking Corporation Limited (OCBC Bank) launched a campaign under the tagline “To stay true, we are going to stop advertising like others”. The objective was to put a stop the “misleading advertising, complicated mechanics and hidden restrictions of promotions written in fine print”. Creative agency GOVT Singapore led the effort.
The costly campaign saw three full-page advertisements in The Straits Times, along with sponsored online ads. One video even showed OCBC’s Head of Consumer Financial Services (Singapore), Dennis Tan taking a lie detector test to demonstrate the bank’s commitment to full transparency.
This campaign did not sit well with the public. Some people felt it was yet another gimmicky marketing tactic. The bank’s Facebook page was filled with customers’ comments about how OCBC had fallen short on its service standards.
Financial blogger Mile Lion wrote a piece on OCBC’s promise of full transparency. He took issue with the bank’s sponsored post on Mothership and its Titanium Rewards Card. He believed it had failed to address the cap on its “10x rewards earning”.
UOB received public backlash for the misleading terms of its KrisFlyer Debit Card
Members of the public were also upset with UOB’s promotion of its Krisflyer Savings Account Debit Card. The bank claimed to boast attractive rewards of “up to 5.4 KrisFlyer miles per $1 SGD spent”. TigerAir and Scoot benefits for cardholders such as priority check-in, complimentary seat selection, complimentary additional baggage and a fee waiver for future flights were also advertised.
UOB aggressively marketed the card to millennials through popular local influencers on social media. It was expected that customers would be drawn to these people happily posing amidst picturesque scenery; evoking a leisurely, touristy atmosphere.
The problem was that it was not explained that to earn more than 1.4 Krisflyer miles for every $1 spent customers would need a minimum account balance of S$100,000 (US$72,233) or more. This is an unrealistic amount for those who have just started making money.
Financial blogger Mile Lion’s article added that this savings account earned virtually no interest. The bonus miles offered upon the card’s launch were also for a limited period only. This was not explicitly mentioned in UOB’s advertisements.
Finance website Dollars and Sense took a softer stance to the fiasco. Its writers gave UOB credit for its innovative product but noted its poor customer communication. It is no wonder that banks have been in the limelight for all the wrong reasons when their marketing strategies have been so poorly-executed.
A lack of consumer trust is causing banks to lose their relevance
Source: EY 2016 Global Consumer Banking Survey
The EY 2016 Global Consumer Banking Survey showed customers were skeptical about whether banks would look after their interests. The survey also showed that 40% of respondents depended less on traditional banks than they did before. They were interested in alternatives, such as digital services.
The report recommended that banks build a loyal customer base through proper customer engagement. This would need them to simplify their products and provide quality advice that is tailored to the needs of each customer. Banks in Singapore have already stepped up their customer engagement by actively responding to feedback on their social media accounts. They need to further prove their reliability by ensuring customers consistently receive high-quality products and customer service.
Brands need to know what customers really want
Marketing is not what it used to be. Eye-catching advertorials or publicity stunts can only do so much for a brand. Marketers often overlook the art of simplicity when creating a loyal customer base. Customers want to trust a brand before making a purchase.
The problem for consumers these days is that they “have no option but to trust”. This is especially the case for non-tangible products such as education or financial services. Online user reviews of financial products are available but they are subjective. The quality of a financial product can only be objectively assessed if one has prior understanding of financial mechanisms. Online contributors do not always have this knowledge.
Brands need to achieve “trustability” to remain relevant in the market. This means going the extra mile to provide the best deal – not just from the company’s perspective, but the customer’s too. To do this, a brand ought to build up a network of trustworthy advisers that customers look up to for recommendations.
Cosmetics retailer Sephora is a good example of this. Sephora created its own community, Beauty Talk, which allows influencers and customers to leave honest product reviews. The brand has won a level of transparency and “trustabiity” that customers appreciate thanks to this emphasis on authenticity. This type of influencer marketing strategy is more valuable than selecting promoters on a mass scale.
Brands often suffer a trade-off when being transparent. If they are open about their dealings they might raise the trustworthiness of their brand, but they also risk rival companies producing spin-offs of their product. This would quickly reduce a company’s profitability. It is a risk that cannot be avoided.
Brands will only become family favourites when they consistently strive for the maximum possible transparency and high-quality service standards. This will also bring them a loyal customer base.
Banks should set the standard for greater transparency
The over-the-top campaign by OCBC Bank raised a salient point: the onus is on banks to set higher standards. They must be transparent, reliable and high-quality service providers. OCBC’s campaign highlighted how online influencers need to be cautious about the products they are touting to their follower base. Consumer trust is the cornerstone of a successful brand image.