Santander: We know customers are heading for financial difficulty before they do

Santander often knows which customers are in financial difficulty before they know themselves, according to the bank’s customer engagement lead, Clive Head, who is using this information to help increase relevance, all the more important during a cost of living crisis.

He describes Santander as a “very, very data rich” business, with unique insight that allows it to understand customers’ habits in detail.

“We can see customers approaching financial difficulty before they know that themselves,” he said, speaking on a panel at the Data and Marketing Association’s (DMA) Customer Engagement event today (13 September).

However, he said most consumers do not want to admit when they are in financial strife, and so the bank needs to be very careful about how it uses this data.

During lockdown, for example, Santander called many of its customers to discuss financial health and overall wellbeing, and Head said the business found many customers would insist they were doing OK financially even if that wasn’t the case.

But during the pandemic, and now as recession looms, Santander believes consumers will value suggestions on how to manage their finances, even if they are reticent to speak about it.

As a result, the bank has introduced ‘My Money Manager’, which uses data to understand what customers do within their Santander accounts before making suggestions as to how they might spend better. As an example, Head said the tool might recommend consumers cut multiple streaming subscriptions to save discretionary income.

Not many people love their bank.

Clive Head, Santander

The cost of living crisis is also disrupting Santander’s own business and product offer, with changes to the housing market just one example of how it is being impacted.

“The product mix that we’ve got is going to change dramatically,” he stated. “We’re going to have to be a lot smarter in what we do and how we do it.”

However, he said there are opportunities for the bank, by making sure it is there at the right time with the right product for consumers.

He said it’s more important than ever to understand customers, which comes from “having those conversations and using behavioural insights to frame those conversations”.

He added that the brand employs behavioural psychologists, something that works “very, very well”, to aid Santander’s understanding of its customers.

The challenge of building love for a bank

Head was candid about the fact “not many people love their bank” but added that despite this, love is exactly what Santander aims for. Setting that goal allows the bank to “shoot for the stars”, he said.

In terms of how the business measures loyalty, he said that while it does look at functional KPIs, the “North Star” for the business are “emotional KPIs”. He added that Santander looks to its Net Promoter Scores to understand how it is building an “emotional connection” with its customers.

In response to a question about how much the bank sees customers who join just to take advantage of signing up perks before fleeing to a new bank, Head said people think very carefully about joining a new bank.

He said there were few “players” that change bank regularly but added that these tend to be younger consumers shopping for rewards.

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Head was also asked about new legislation brought in by the Financial Conduct Authority (FCA) on consumer duty. The FCA says the new rules will mean customers “should receive communications they can understand, products and services that meet their needs and offer fair value, and they get the customer support they need, when they need it”.

Head said that what that means for the like of Santander is that, for example, it should be flagging to a consumer that’s on a very low-interest account, that they could move to another account that will accumulate more interest.

“We do a lot of this already,” he insisted, adding that this relates back to the bank’s focus on customers.