Dave Wallace was 25 years into a successful career in and around digital banking. He’d been one of the first UX designers working in the United Kingdom’s financial services space. But in talking to customers in recent years, he started to notice that the intense focus on usability and online experience had left customers wanting for real connections with their banks. Wallace noticed that the people he surveyed were anxious about their money. “‘Well, the digital channels are not solving those problems at all,’” he remembers them saying. ‘“In fact, what we feel is that we’ve been pushed down this terminal by the banks. And although we’re closer to money, we’re not closer to the institutions, which provide these channels.”’

So, Wallace, Natalie Raja, and Mark Caudell started NMD+, a creative and tech consultancy firm that works to improve customer experience for financial services. “Everything the industry has done for years has been about optimizing processes and perfecting processes,” Wallace says. “And what we hadn’t done was spent really any time thinking about relationships and engagement.”

We connected with Wallace to learn more about the different challenges of connecting with consumers that face an incumbent and challenger bank. We wanted to know the value of tone and how his background in psychology has helped him understand the way banks communicate with customers.

Unifimoney: Let’s say you were advising an incumbent bank and a challenger bank; what are the biggest differentiators in brand strategy between the two?

Dave Wallace: For a challenger bank, it would be about, ‘How do you really understand what you’re doing from a kind of product and proposition point of view and, more outward-looking, how do you connect better with an audience in order to do that?’ The goal is to really dial up the experience around that and build a loyal customer base. Then, you can build out from there. But it’s key to be very, very focused.

Whereas, for a traditional bank, it would be more: ‘Look at the existing relationships that you have and look at the data from those customers, understand them, go and talk to them, and then actually start looking at the assets you have from a digital point of view and make them more active in terms of building those relationships.’

What the existing banks have is massive pools of data, which they can call on, so theirs should be more of a data-led strategy. Whereas, for challenger banks, it’s more about identifying an opportunity and focusing on it.

But the danger of that challenger bank strategy is, if you look in the UK, for instance, there’s been a war of attrition around making it as easy to apply for a bank as possible. But beyond that and spend management, there’s very little in terms of loan and credit. So, these challengers become, in a way, mono-dimensional. And one of the interesting things, when I’ve gone out and talked to people, what you hear is that consumers see them as almost disposable. So, the fact that they’re easy to apply for makes them very easy to get rid of. Whereas I think the legacy banks are a lot more difficult for customers to unpick from their lives.

So, the challengers have to think about the holistic thing that they want to build as part of their story. I look at what you’re building with Unifimoney and I say, ‘Well, actually that’s a rounded proposition in its own right, and it’s also very focused on a particular segment.’ So, you know, that feels like a good thing to be doing.

Unifimoney: We’ve been working with an amazing comedy team called Stocktual who made a series of advertisements for Big Brand Bank — our stand-in for all the American incumbent banks. We’ve found that humor is an effective tool as a disruptive newcomer. How important is tone when it comes to branding? What are some of the most effective uses of tone that you’ve seen in the financial world?

Wallace: I think tone is absolutely everything because it’s the way you connect. And tone is the guide across multiple communication channels as well. If you go back a decade, there weren’t all the channels to reach customers that there are now. But today, if you don’t have a good understanding of the way you want to talk to customers, you’re in danger of going off at many different disparate angles, which just waters down the overall message. The industry has been incredibly poor at managing these things.

But if you go back a few years, HSBC had ‘The world’s local bank’ as their tagline. That tagline found its way through their advertising and started showing up on air bridges. So, when you got off a plane in an airport, in many parts of the world, there was the HSBC branding bringing that whole notion of being local. It was a brilliant example of how tone worked incredibly well to hold everything together. And I think it’s no coincidence that that coincided with them being the biggest bank in the world.

Another example on a smaller scale is Monzo in the UK. They’ve got a great tone, which finds its way across all of their communications touchpoints, from their social media through to their website through to their app. Everything is very cohesive and that works incredibly positively in their favor.

Unifimoney: You studied Psychology at the University of Birmingham. Our founder Ben also has studied Psychology at university and is fascinated by the way psychology has been used against consumers’ best interest when it comes to finance (he’s trying hard to create a product that automates through the problem of us devaluing delayed gratification). Obviously, psychology is used in branding as well. What are the best and sneakiest uses of our psychology in financial branding?

Wallace: Oh, that’s a good question! You know, I posted something on LinkedIn, which was about something I remember from my psychology days: that the brain is essentially a lazy organ. And by that, I mean, it’s trying to find the line of least resistance in terms of achieving things. So, if you look at human history, we’ve gone from kind of dropping out the trees to walking around the savannah to agriculture to the steam engine to the internet to basically slumping on a sofa and watching Selling Sunset, and all of that has been about making our lives easier.

When you look at what many of us in the financial industry have done over the years, we’ve been trying to align the way the brain likes simplicity to create better processes. I think a lot of the neobanks are really doing a brilliant job of creating incredibly simple interfaces, which help people to understand complexity at a glance.

But I really like your question about the sort of sneaky ways that companies might be using psychology. I need to think about that for a minute.

Unifimoney: Well, in that vein, we always think about credit card miles and points. Banks have become masters at showing happy families in paradise and promising free trips, while all the while gamifying spending. What they don’t mention is that the programs increase spending and a huge percentage of the miles and rewards go unused. It’s just like Chuck E. Cheese psychology brought into the banking space.

Wallace: The master of it is American Express with their membership rewards. I mean, I fell for this hook, line, and sinker the other day. There was a promotion they were doing, which was 2000 extra reward points if you spend over a hundred pounds at LuluLemon. With American Express, curiously, you have to opt into these things. You’re not automatically enrolled, which I think is quite interesting psychology in and of itself. But I didn’t do anything about it and then they sent me an email saying, ‘Oh, you’ve only got a few more days to go before this expires.’ And then, sure enough, there I was on LuluLemon. I think they’re real masters at doing all of this.

Unifimoney: They also have mastered the idea of exclusivity. Their Black Card became a symbol of wealth and their membership program continues to give off a members-only sheen.

Wallace: Yeah, god… You’re right. I mean, I’ve got a platinum card. I don’t need a platinum card, but I sort of feel like I don’t want to give it up. And they’ve connected it to the airline club level in a way that I don’t think any other brand has to be honest with you. It says: Member Since ’97, which does make me feel part of their club, you know?

Unifimoney: The last thing we wanted when launching our first credit card was to make yet another metal card trying to be the new Black Card. Instead, we decided to partner with CPI Card Group and The Ocean Foundation to put out an ocean-bound plastic card that made an automatic micro-donation to The Ocean Foundation with every purchase. We thought: we have to do something different and why not make it meaningful? The world is overflowing with metal cards.

Wallace: You’re right, but I think people see through it all eventually. Metal cards will drop away. What you’re describing in terms of the ocean plastic card, I want to be part of that club, to be honest with you. So, I really applaud you for that. I think it’s a fantastic idea and with the cards made out of ocean plastic, then there’s a real connection with all of this as well.

Did you see Razer last week? They’ve launched a card which lights up. [laughs] So, it’s the next level of antics around cards themselves. That feels like it stops very suddenly, whereas what you’ve got with the ocean-plastic card is the potential to expand all of that out into a much more holistic view across your business.