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Youth-Oriented Marketing, Frankly Speaking

When Singapore-based OCBC Bank decided it needed to more aggressively pursue the large and growing young adult market in that country, it took what it would call a very “frank” approach to reaching this audience.

Rather than offer one product for this market, OCBC Bank executives spent more than a year researching and designing a completely different style of branch and a whole package of bank services and marketing oriented to the needs and desires of Generation Y. The new banking segment, dubbed “FRANK” for speaking frankly and honestly, has indeed been a hit with young adult customers since it launched in May, according to Priscilla Yong, FRANK Segment Manager.

“We want to change what young people think about banking and to make banking itself meaningful and relevant to them, as well as being able to improve their lives, through FRANK,” Yong said. “This is a very straight way of targeting young people.”

Yong and Bee Leng Chng, head of the mass market segment for the consumer financial services division of OCBC Bank, discussed their experiences developing and launching FRANK in a session entitled “Leveraging Customer Insights for Segment-Specific Banking” during the recent BAI Retail Delivery conference.

Chng noted that it may seem an anomaly for the conservative, near-century-old OCBC Bank (Overseas Chinese Banking Corp. Ltd.) to have given rise to this funky, youth-oriented upstart. But she said OCBC needed to connect with the estimated 750,000 18- to 28-year-old consumers who live in Singapore, a country of just 5 million, and to break OCBC’s traditional “silo” mold.

“We are moving away from a very product-silo kind of treatment to customer centricity, because we realize that silos don’t serve our customers’ wider financial needs,” Chng said. “It is difficult to have a consistent experience if you go on the silo approach.”

Not Your Daddy’s Bank

The second largest financial services company in Southeast Asia, with $200 billion in assets, OCBC Bank had been “very strong in our world in the mass market” but lacked cachet with younger people, Chng said. “Young people, being brash and frankly speaking people, tell us, ‘We know OCBC, but it’s my daddy’s bank, it’s not my bank,’ and they are basically not connected with our OCBC mother brand.” The very name “FRANK” was chosen to reflect the value of “honesty, simplicity, sincerity” and to connect with these customers, she added.

To reinforce that new brand, FRANK’s retail stores are designed to “feel more like a CD music shop,” according to Chng. The branches boast an open floor plan, with card designs and banking products showcased alongside merchandise from other retailers. The branch concept for FRANK takes a page from youth-targeted retailers such as Forever 21 and Topshop, she adds. Chng described the branches as “open, welcoming, lots of space, bright lights, colors that the young people like.”

In what Chng termed a “peer-to-peer model,” OCBC Bank has staffed its FRANK stores with employees who themselves are 20-somethings; employees are encouraged to dress as they normally would outside of work. While there is a dress code, Chng said, it allows plenty of room to reflect personality and individuality.

“They are not dressed in the usual banking uniform,” Chng said. “It goes off very well with the customers, because they are talking to their peers.” She said the peer staffing model contributed greatly to the fact that 76% of FRANK customers surveyed by the bank say they would recommend it to a friend.

FRANK accounts offer customers between 0.30% and 0.60% interest, depending on the average balance, higher than the 0.10% typically offered by other savings accounts in the region, according to the bank’s Website. The bank has a presence on online social media outlets Twitter and Facebook. And it also allows customers to personalize their debit card with one of more than 130 designs. Customers pay a small fee for almost all of the designs, which will soon be available for credit cards as well, Chng said.

“It’s all about self-expression, it’s about finding a particular card here that actually kind of meets and suits your own character and attitude,” Chng said.

When OCBC Bank decided in 2009 to focus on the younger market, it began surveying 20-somethings on what they wanted from a bank. “I was personally surprised by the kind of reactions that we got from the young people,” Chng said. “They told us that ‘banks don’t care, you don’t engage us, you don’t understand us,’ that banking is something you have to do, not what you want to do.”

That’s when Yong and her team, working with Chng and other colleagues, began conducting research inside and outside of the banking industry seeking inspiration for the new FRANK model. Chng said that more than 180 people at OCBC Bank collaborated on the research and development for the new segment.

Yong said that the senior management team took a hands-on role in the research by traveling to the United States and Europe to look at how to incorporate youth retailing strategies into the new segment of the bank. After the research was completed, senior managers met for two days to come up with the value proposition that OCBC Bank would use as a foundation for its new FRANK bank, Yong said.

“We wanted to immerse our senior management and get buy-in into the whole FRANK proposition to involve them from the very start,” Yong said. “It was an important ingredient in developing a winning proposition.”

After 15 months of research and development, Yong and her team validated their plans by surveying Generation Ys and developing a prototype of the physical and virtual channels for respondents to test. Over the course of the entire development process, Yong said the bank interviewed more than 1,000 young adults in Singapore. The research was instrumental in affirming that young people, despite their well-known predilection for electronic channels, also liked and wanted branches – albeit different looking ones.

“They really still want a physical store to browse, touch and ask questions,” Yong said. “However, the store has to be refreshing and it has to have components to attract them to walk in.”

Ms. Hoffman is a freelance writer based in Lawton, Okla.