Mission impossible? How AIB bank set out to fix its 'extraordinarily damaged' brand
AIB chief marketing officer Tom Kinsella explains to John McGee why it's the customers who now matter more than ever
The Irish banking industry has turned the corner. While there are still some legacy issues to be dealt with, the slimmed down but better regulated banking environment that exists now bears little resemblance to the toxic domain that led to the Government's bank recapitalisation programme in 2009.
For AIB, which received nearly €21bn in taxpayers' money, the turnaround has been significant with pre-tax profits amounting to €1.9bn in 2015. Sometime next year, the taxpayer will get a pretty decent return on its investment.
As it is for other banks, the new reality for AIB is that it has to lend money to make money, a message that is often lost in the negative sentiment that has enveloped the industry over the past number of years.
While the sentiment may be more muted, now that the economy has picked up, it posed considerable challenges for the bank's marketing team, which is headed up by chief marketing officer Tom Kinsella and prompted a root and branch overhaul of its business.
Kinsella is one of several non-bankers who joined AIB bank over the last number of years to help shape its future strategy, reposition it in key areas within the marketplace and, most importantly, change its perception amongst customers by making it a much more customer-centric organisation.
Having held several Irish and international roles within the drinks giant Diageo, including a stint as global marketing director for Bailey's, joining AIB as its first-ever CMO is likely to be the biggest challenge he will ever undertake.
"Personally, it's been a fantastic professional challenge to take a brand that was once extraordinarily damaged, turn it around and restore it to what it should be. Working in the alcohol industry was fun but it wasn't that important. This, on the other hand, is very important and for lots of reasons," he says.
"The bank is effectively owned by the taxpayer and it's important that its investment is returned to the taxpayer. But it is also important to the wider Irish economy that we have a strong and viable AIB well into the future and that's what we are constantly trying to achieve on a daily basis," says Kinsella.
"As a pillar bank, we also have a social obligation to support business and personal customers, but in a sensible way and within the risk parameters that have been set. We take this social obligation seriously," he adds.
"The biggest change for us over the past few years is the relentless focus on the customer. Before I took the job, both the current and former CEOs - Bernard Byrne and David Duffy - shared their vision for building out a business that was centred around the customer.
"They realised that the bank needed a strong strategic proposition where marketing would essentially be the representative of the customer in the business and that's really what we have here now - we are the voice of the customer," says Kinsella.
"I wouldn't say that we're there yet, but we have invested a lot of time and energy in trying to get it right but the intent and the mind-set is now there to back it up," he adds.
Turning the bank effectively on its head to implement these changes involved a huge cultural re-think internally.
"There has also been a huge cultural change within AIB along the way and this has come from the top down," says Kinsella. "We now have a board and a leadership team that are now entirely customer-focused."
In a competitive market where many of the products and services on offer have been virtually commoditised, with little difference in terms of lending or deposit rates on loans, credit cards or mortgage rates, getting customer buy-in and differentiating itself from pack has also been crucial.
"If we can build a strong customer franchise around our brand, it makes us stand out in the marketplace. Now we are seeing our net promoter scores getting better and much stronger as a result.
"In certain parts of the business they are in the seventies while our overall transactional scores have gone from one to 36. Brilliant looks like 50, and higher, so we have some way to go but we are getting there. Now we are beginning to see the first inkling of the AIB brand being differentiated in the minds of our customers from other brands and that's very significant," he says.
But the old days when banks believed that once they had a customer, they had them for life are also gone, says Kinsella.
"There is now a lot more churn in the marketplace and I expect to see a lot more in the future and technology will be one of the drivers as it makes it much easier.
"We will do our best to hold on to customers by giving them a reason to stay with us or indeed joining us. But we have to earn that right by giving them the products and services they want, making them feel loved more than any other bank and ensuring that they have an exceptional customer experience," he says.
With competition rife in the marketplace and parvenu players springing up in the FinTech sector all the time, the future of the traditional banking industry as we know it will see a lot more innovation as technology continues to disrupt large swathes of the industry. It's a challenge Kinsella relishes.
"The thing that keeps me awake at night is whether or not there's a bunch of guys working in a garage somewhere who have just invented something that will signal the end of traditional banking.
"While it's exciting, it's also important that we keep on top of what is going and by innovating ourselves by giving our customers the products, services and technology they want. The moment we rest on our laurels is the moment we are dead,"he says.
Sunday Indo Business