Banking on insight

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Eleven years on from RBS Group’s £45bn taxpayer-funded bailout at the height of the financial crisis, the company is still feeling the effects in terms of its reputation. Last year, then chief executive Ross McEwan said it could take another 10 years to rebuild consumer trust.

When I meet Paul Smith at the bank’s cavernous offices on the outskirts of Edinburgh, change is afoot: a new chief executive is about to take the helm – Alison Rose, who took over from McEwan on 1 November, is the first female CEO of a major UK bank.

Reputation is a continuing issue facing the insight team working for the Royal Bank of Scotland, which is just one of the subsidiaries within the wider RBS Group umbrella. “We can’t change the story, but we can help people understand it – how do we help customers do that?” Smith says.

Smith looks after customer insight and marketing data for everything inside RBS Group’s ‘ring fence’; the company is required by law to separate everyday banking services from investment banking. Everyday banking services includes the retail banks Royal Bank of Scotland, NatWest, Ulster Bank – and private banks, including Coutts and Adam & Company. “You’ve got small businesses starting out, all the way up to £25m+ turnover companies. On the personal side, you’re going from basic customers to ultra high-net worth consumers,” says Smith.

While it’s a varied portfolio, there are commonalities, and sometimes one piece of research can have implications throughout the organisation. “Underpinning everything is human need, human behaviours – that’s what we’re there to try to understand, and then communicate to the rest of the organisation.

“We did a big piece of work on behavioural economics recently – these considerations hold true whether you’re a NatWest customer in Kent or a Royal Bank of Scotland customer in Orkney, or even a Coutts customer in Switzerland.”

There is also common ground between the consumer banks, particularly RBS and NatWest, which share a similar underlying infrastructure. Branding still reigns supreme, however, so the challenges look different for the two brands. “The problem for RBS is very well-known – everyone has read about that for the past 11 years,” says Smith. “One of the big things is understanding why the NatWest and RBS brands are so different in performance – when they are effectively the same underlying systems, product sets, and same coverage.”

Knowing the history of RBS, this is “intuitive and obvious”, but Smith adds: “We’ve done a load of reputation work for the RBS that we haven’t necessarily had to do for NatWest. That’s a good example of the different approaches we take.

“It’s also dead easy to get NatWest customers to talk to you, because there’s so many of them – it’s a big pool. Coutts is a very different story. There are very few ultra high-net worth customers who sit on consumer panels, so we have to make much better use of our own data. We have to build things like a client council – we have an ongoing focus group with them. So we have quite different approaches depending on the brand.”

For such a large bank as NatWest, Smith is focused on establishing the right marketing mix, from data science to broadcast media. “It’s about how to wake up – what I would call – a sleeping giant, and turbo-charging that brand.”

Smith’s team is responsible for all insight and research, and is the voice of the customer programmes for the organisation. Pre-financial crisis, RBS Group had no fewer than 14 different marketing departments. This has been streamlined over time, and the organisation now has one central team; the same process took place  with the insight function within that. There are now 40 people, including a research operations team that runs the Net Promoter Score (NPS) surveys and in-house surveys, as well as a marketing data team.

A flourishing fintech landscape means new digital-only banks such as Monzo and Revolut are creating competition for the established banks, particularly for younger consumers. Insight, therefore, is crucial to spotting where the opportunities lie and identifying blind spots.

Hindsight to foresight One of Smith’s big priorities is for RBS Group to focus more on foresight. “From a methodological perspective, we spend a lot of time looking back.

The big focus is working out what might happen and then helping the business either plan for that or build new propositions.

“It’s very easy to look back. We have tons of data and millions of customers. For a market researcher, it’s an extreme luxury to delve into this, and do segmentation and all the rest. But this stuff is of no use unless it drives an action.”

Instead, the team wants to maintain a closer connection with the rest of the business. “Our focus is about working with the various businesses and disrupt their thinking. For example, based on everything they know, they might assume customers are over here, when in fact they’re over there.

This might involve ethnography on a particular topic. In this regard, NatWest has analysed business customers’ attitudes to open banking (see ‘Opening the opportunity', below) and worked with consumers to rapidly generate new propositions. “We’ll get consumers in at the end of an evening – it’s not pure research [in the sense of being a] representative sample but it allows us to iterate quickly and get ideas we’ll take into a qualitative study, and from there into a quantitative study.”

As with the rest of the ‘big four’, RBS Group is being forced to innovate or be left behind to keep pace with challenger banks (which, while struggling to make a profit, are vastly popular). The bank launched its own digital-only service, Bó, towards the end of the 2019, to rival the ‘neobanks’. While it was developed separately to the rest of the organisation, the insight team worked with Bó on market mapping and positioning.

Likewise, it has launched Mettle, an online account, and NatWest Tyl, a merchant acquiring service that helps companies take online card payments. Both aimed at small businesses, these services were also developed separately from the core business, in response to opportunities identified through insight work.

Performance culture

In 2016, the company introduced a NPS system, run by the research operations team, using customer experience feedback collected in branches, on the phone and online. The data is used to make operational improvements and is fed back directly to branch employees or telephone agents to highlight where things could be improved.

“It has driven a huge culture change. It’s like a performance culture – understanding how well you’re doing for your customers,” says Smith. “If something happened in a branch that meant the customer wasn’t fully satisfied, we know that, and we can try to stop that happening next time.”

While NPS for the Royal Bank of Scotland has taken a hit because of branch closures in the past couple of years, this is now recovering. “We’re listening, learning and acting on customer feedback in near real-time.

It’s not research for a data pack or to prove an opinion – it’s research to change the business and make it better for customers,” says Smith.

In addition to the customer experience management programme, the company also works with Kantar on advertising and brand tracking and Join the Dots on a consumer and business panel.

The insights function works with data and analytics colleagues, with the help of a group of individuals Smith calls the ‘translation team’, to bridge the gap between insights and data science. This team works with the insight team to refine the briefs in a way that those working in data and analytics can understand.

“It’s like we’re talking the same language but using different words – I can’t tell you how to build something in code. We recognised early on that we need to put a translation team in and that’s what our marketing data team is,” he explains.

One example would be fusing the company’s NPS research data to its database, where it is permissible and possible to do so. They then automate the reporting of that when the marketing data team has appended the behavioural data. “We try not to do it ourselves – we try to blend both, and that translation team in the middle is critical to helping everyone understand what we’re here to do,” says Smith.

In terms of sharing understanding with the rest of the organisation, there is a set of partners assigned for each of the group’s businesses – effectively operating as the strategic insight lead for that particular business area, collating requests and reporting on NPS and brand performance.

The insight function also has a hub that serves as a library for all the insight work, and where people are directed to before a new research project begins. Insights, including snippets about trends in the economy and market trends, are also shared on the RBS Group internal workplace.

Smith’s main priorities are in refining insights’ relationship with the data team, “trying to stay in the future rather than raking over the past,” and moving at the speed of the business. How does he balance speeding things up with long-term brand health?

“That’s why we have our big ongoing programmes that allow us to see subtle changes over time and do the longitudinal analysis. If you just did four qual groups then launched a product, you might miss some of the subtleties of what’s going on. But equally, if you waited two years to have that dataset, someone else has already launched it who doesn’t have a 40-strong insight team and just thought ‘that’s a good idea, I’m going to throw it out there.’

“It’s about using the past to inform the big trends and shifts and the tools and techniques of data, UX, or qual quant as we know it, to get quickly into how we can help customers more in this space or take them to that space. It’s not an easy balance; it comes down to the priority for the business, and our priority is serving customers well. Is this going to help this customer get a better experience, better product or, ultimately, live a better life? That’s what we use as our judgement criteria.”

Opening the opportunity

The ‘Open Banking’ reforms, which came into force in January 2018, aim to give consumers more control over their financial data. But they also have implications for businesses.

“Most of the noise in financial services has focused on individuals and the opportunities and challenges open banking would bring,” says Zoë Willment, insight lead, communications and marketing at NatWest. “There didn’t seem to be anything that was focused on the business-to-business side of things – which could bring advantages for our business and commercial customers, as well as for us.”

In 2017, NatWest worked with research agency Illuminas on qualitative research to explore attitudes towards open banking among businesses, going back to revisit the issue in 2019.

At a strategic level, businesses didn’t realise how valuable open banking could be and what benefits it could bring. Research found that while smaller businesses are usually single-banked and more cautious, and larger organisations are multi-banked with more complex financial products and their own systems, there is an opportunity for NatWest to help firms in the middle “understand and adopt” open banking, explains Willment.

“Often B2B is presented as one thing. You wouldn’t do that with personal [banking] – you’d talk about ‘high-net-worth’ or ‘students’… It’s too easy to talk about businesses as just one group when they’re as multi-faceted as anything else.”

The research has informed NatWest’s open banking workstream on getting the basics right and making sure customers are confident in the technology. It also reinforced the importance of clear communications in this area. “It’s very easy to forget that the customers out there are not all fully aware of open banking, so it reinforced that we needed this communications workstream,” says Willment.

This article was first published in the January 2020 issue of Impact.