Halifax, one of Britain’s biggest mortgage lenders and part of Lloyds Banking Group, recently launched its Home Finder app, which combines property search functionality, house price data and a mortgage payment calculator. This app, which has received favorable customer reviews in the Apple app store, represents an attempt to serve not just existing customers of the bank in the way a standard mobile banking app would do but also to reach out to potential customers by offering a genuinely useful tool. While the Halifax app is a UK first, Commonwealth Bank in Australia pioneered this type of service with its Property Guide app launched back in 2010.
Barclays has also sought to use an app to court potential customers with its Pingit mobile payments service. By registering online, even consumers who do not bank with Barclays are able send and receive money using the service.
By offering a free service to potential and not just existing customers, these banks are hoping to establish a relationship, and put that relationship on a positive footing by providing something that, in its own small way, improves their lives. Marketers call this approach ‘branded utility’ and it is one that we are increasingly likely to see banks adopt alongside their main applications used to serve customers.
Branded utility works for banks because the associations of helpfulness, security and trust are arguably better expressed through pragmatic, financially-related tools than through entertainment apps such as games or through content such as video and music.
While Barclays and Halifax have invested in quite elaborate services, it is also possible to deliver fairly simple branded utility, focusing on just doing one thing simply and effectively, as First Direct has illustrated with its Currency Converter app.
Whether simple or more extensive, such apps can offer significant marketing return on investment potential compared to mass media advertising and sponsorship. Furthermore, for those banks that can deliver really useful apps, branded utility could prove a very effective component of their engagement strategies for existing and potential customers alike.
David Hodgkinson, Senior Advisor in the UK