Feb 2023 UK Banking App Overview
Starling Bank continues its overall dominance in the UK market with Lloyds, RBS, NatWest, and Halifax all very tightly grouped together, and any one of these banks could take second place and look to catch Starling if they prioritise their energy on the features and journeys identified with the biggest gaps in engaged customer scores with the other competing banks.
Touchpoint Groups ability to segment and benchmark against competitor feedback enables banks toget very granular and focused on actions that will impact rankings and customer engagement. Utilising benchmarking data comparative to the market leader and nearest rivals is the fastest way to make ground and outperform the competition.
An example of this is Lloyds Bank which ranks very well in most areas but, if they want to improve the overall satisfaction and engaged customer scoreto make ground on Starling Bank, the core areas they could focus on arecheque deposits and paying bills. Thewse two journeys have the biggest negative gap between the market leader and the peer group with similar rankings.
Likewise, if Starling want's to widen the gap and cement the position at the top of the rankings, the journey they could focus on is transferring between accounts where they only rank third.
Churn Risk
HSBC continues to be a churn risk concern as far as major banks go. In 2022 they did lift from the absolute bottom of the pack with ECS scores in the mid 1's in Engaged Customer Score to mid 3's, they have not managed to continue the lift in performance and are stuck in the bottom 25% of tracked banks in the UK market with Monese, Monzo and Virgin Money below them at the bottom of the pack and as far as Engaged Customers and Chun Risk goes, this is definite red flag material for HSBC and potential upcoming cust churn.
UK Banks Video Transcript
Banking App Insight Session February
00:05 - Intro by Glenn.
00:31 - Engaged Customer Score Overview
02:37 - Major Journey Score
03:50 - UK Challenger Banks Review
06:05 - Customers Threatening Churn
07:33 - Customer Reviews
09:50 - Final comment by Glenn
00:05 - Intro by Glenn.
Glenn: -Hello everybody and welcome back to another Banking App Insight Session February 2023. We're looking at the UK Market, the main UK Banks and the UK challengers and this month, Tony Patrick, we are going to go and look a little bit deeper in some of those areas where even though you may be the number one Bank in certain areas, it's very rare that you're number one across the board and a great way to identify and focus on those areas that you can really dig down into to give you that overall lift and how to prioritise what areas of the app to focus on. I'm just going to hand it over to you, my friend and I'll let you work your magic with the data.
00:31 - Engaged Customer Score Overview
Tony: -Brilliant. Thank you, Glenn. So today we are looking at the main UK Banks and the UK Challengers and let's have a look at how they stack up broadly and even the leaders as Glenn alluded to, is as there's room for them to improve too. Let's just jump in and see what is going on.
Now, just a quick overview. We've seen this before, looking at the 2022 trends and the colour coding there is really helpful because we can see things like, when apps have picked up, when they've dropped away. A clear one at the bottom there is how HSBC has picked up from mid-year and moved forward from there so that's just a nice perspective. One of the things we can see is Starling, Lloyds and Barclays sitting there in the top three and we can sort of see you know, next we'll actually see why they're doing so well. So, give me a... -let's just jump forward and have a look at what's going on in here. The first view we'd like to look at is this Overall Score and we can see that the HSBC has jumped up, but one of the good things we can do is just -just put them to the side for the moment so we can sort of see what else is going on in here.
One of the things is apart from the Santander drop in July there's actually nice consistency across the year from there. One of the things we're also like closely watching is this NatWest jump that we saw in November and how it's so tightly fighting it out with Lloyds at the top there, very very close. You can see there they sort of touched this point there's a small gap now, but NatWest has done well to increase and maintain that position ...and the only reason they haven't left ahead of Lloyds is because Lloyds actually jumps slightly at a similar time. Lucky they've done that otherwise, they would have been in second place.
Let's just move forward into this and have a look at some reasons why these apps perform in the world the way they do.
02:37 - Major Journey Score
What we're looking at here is the major Journeys. So, looking at things that are probably 90% plus of what people are doing inside the app. Monitoring Account Activity, Transferring between Accounts, Depositing a Cheque, Checking your Account Balance and Paying Bills.The majority of things you're going to do with the app, get these things right and you're going to do very well in terms of your score and your overall presence in the market.
We saw that Lloyds is doing very well in terms of its score & getting a high score here is really good. We can see here with the very simple thing of just Monitoring your Account Activity they are second overall and the leader here is Starling. We'll cover Starling off in a bit more later but, Lloyds is doing well on that. They're doing first on Transfer from Accounts, one of the areas though potentially they could actually improve on is Depositing a Cheque. Even though they're leading in their area there's a few others that they could learn from the likes of Starling and Revolut and the same here for at the end here with Lloyds for Paying Bills.
Very you know, very simple thing people want to be doing but, Barclays is actually doing better in that area. Lloyds could learn from Barclays to improve there.
03:50 - UK Challenger Banks Review
Let's step forward and look at the UK Challengers.
The consistency of Starling is one thing to look at. Now, there's a few little jumps. One down in November they picked that up very fast so, they're on to these things fast if anything goes wrong. Averaging around 4.6 so, up there globally in terms of the scores here. Very very good for them and others in here are doing well as well.
One of the things we saw -we can see consistently are the likes of Chase UK. So, Chase has actually picked up and up and up. Now, even though it's very, very slight the number they have in February is slightly ahead of where they've been over the past 12 months. So, very good for them and, hopefully, they can hold that position and stay up there.
Let's have a look though at those Journeys, those all-important Journeys.
The reason for being for these apps and the reason customers are using these apps. Let's have a look. Now, one of the things I like to point out here is Starling is doing so well. However, there are two clear points where Starling could improve even further.
We see they're doing you know, the leading on Monitoring Card Activity but they're only third on Transferring between Accounts. So, some room to improve for them there. They could learn from the likes of Barclays and also from Lloyds who are doing better in that area and by a reasonable margin from 4 to 4.3 so... doing very well there.
They're doing well on Check Deposits, they're doing well on Checking Account Balance but, Paying Bills... that is a slight pain point for customers there, they're fifth. Now, that seems it ...doesn't seem to line up with their position in the market. It just shows they still have room to go up a notch and they could learn from the likes of Barclays and Chase sitting up here at 4.2. A 4.4 ahead of Starling there.
So, room to improve always for these apps.
One of the things you have to be aware of though is, of course, this is -these are ways to improve across the board but, what are the tangible outcomes of this?
06:05 - Customers Threatening Churn
Obviously, you can improve your overall score, great... you can retain customers but one of the things we can see is when customers are actually giving feedback they also talk about threatening churn. Now, just to give some context, there's been a few studies around now that line up in the sense that of the users of the app around a third of those actually say if the app doesn't perform it continues to underperform or causes bugs or doesn't do what it's supposed to do for me, I will actually leave. So, a third is saying they would actually leave a bank because of Poor App performance.
Now, in here we can see from the feedback we're getting even though -we got this one here so UK Legacy Banks we've got a 2.1% for one particular Bank saying they will leave because of the current performance. Now, whether or not they follow through with that or not, we don't know but, at least it shows the relative performance of each of these.
The best-performing ones are sitting at 0.5 here, so it's looking at four times the level of people threatening churn for this one at the top here and similarly here in the UK Challenger Banks one of those is getting a 5% of customers are saying they're going to leave because of the app performance and that's around five times the level of the best performer in that area. There's real -a real tangible information you can get out of this and understand why would customers leave you? So, what can you do about it?
We saw before the Journeys can be underperforming there's ways to improve even for the best players. What can you do?
07:33 - Customer Reviews
Obviously, you can see the comments coming through but, along the way what customers do. I'll show you what's happening inside here in a moment but, what customers do they'll give feedback and say and give Improvement suggestions. They'll say things like: "This thing is missing... I'd rather it do this... I want to see this Improvement here..." What we're seeing here is a whole topic around missing out features so customers mention that something's missing, there's something that was there before or doesn't exist, and they want some improvement somewhere.
And also, what we can do is look at this in various parts. I can look at this by, for example, in the area of Making a Payment there are suggestions around how can I improve the payment, Journey. There's a simple thing here, Checking the Account Balance... these sort of line up with those Journeys we saw before. If I want to improve that, what do I need to do?
On the right here I've actually got Missing App Features for Checking your Account Balance... a very simple thing.
What we've got here is actually customers telling us how they can improve that particular Journey so, if you can see you're not doing so well on that Journey, you can go in here and actually see what customers are saying across the total market. You can probably take advantage of that in the sense of things that customers are not seeing across the whole Market how can you can actually leap ahead of the others by putting those things in.
So, simple things this one here, this customer here is talking about Pending Payments and Balance after Bills where we call it's missing some features there "...a simple feature of hiding a balance when the app opens up" Interesting position there for that customer.
Missing features like balance after regular bills are paid, so you have your Cheque deposits and things like that they want to see the balance immediately as that appears. Even this one's interesting "...I'd like to actually have some more options of the app like being able to hide the balance and movement Etc." This is similar to what we saw in the second one up here.
Potentially a future Improvement coming through and this is across the market across various all the feedback but of course, you can filter this down to your particular app and understand what improvements are required for you in particular. So, learn from the market and then learn what you need to do specifically and you're going to leap ahead of others definitely. Thank you, Glenn.
09:50 - Final comment by Glenn
Glenn: -Yet again, another masterful Insight session on that UK Market, my friend and it's amazing how when you actually drill down into those different features and Journeys how you can really prioritise what area will make the biggest impact on that customer engagement and the customer experience so, thank you once again and we'll see you all next month.