August 13, 2020

How Brand Awareness Distribution Varies by Demographic for Neobanks

by Laura Harker

Neobanks are changing the banking industry, converting people one niche audience at a time. Here's how their brand awareness levels vary by demographic.

Banking is often seen as a traditional industry: it’s been around for hundreds of years and in that time has rarely seen any major changes. Most consumers will say it’s an industry made up of a few major brands that have a very steady customer base. But, in the last few years, the banking world has begun to change.

The big brands remain, but there is now a host of smaller and newer challenger banks that are swooping in on the marketing and claiming loyal customers.

Unlike the main banking brands, these new neobanks - modern, digital-only banks without physical locations - mostly build their presence online, before finally including more widely used marketing methods, like TV advertising.

In addition, most neobanks enter the market by focusing on niche customer segments. They don’t want a head-on challenge with traditional banks - or not just yet, at least. But it’s also not a case of neobanks versus traditional banks, even if it might seem like that on the surface. Different neobanks will be attractive to different customers. But which audience fits with which brand? We decided to examine brand awareness for four of the UK’s top neobanks (Starling, Monzo, Cleo, and Monese) to determine the niche demographic most aware of which brand and why.

Starling

Starling is one of the forerunners of the UK’s neobanks. After being found in 2014 by Anne Boden, it was granted a banking license in July 2016, launched its first mobile personal current account in May 2017, and launched the UK’s first digital business bank account in March 2018.

Starling brand awareness levels

Starling has pretty strong brand awareness across numerous demographics. However, one interesting insight that we found is that it is strongest in older generations - 66.73% of males and 64.15% of females aged 56-65.

Starling has nabbed this key audience by pushing beyond the stereotype of new, modern brands only appealing to millennials (not that it’s unknown to the younger generation, as it still scores highly with the 18-25 and 26-36 age groups too). This is likely due to its recent decision to take a more traditional marketing approach and launch its first TV campaign in Q3 2019. Starling’s advert focused on a small business owner and how she runs her business. The presence of this advert could also account for the fact that people with a medium-high income are more likely to be aware of the brand.

However, while some key demographics stand out more than others, it is clear to see that Starling is resonating well across the board. Of course, this is a key marketing aim of Starling. They are actively creating a brand that isn’t “defined by age or geography” by setting themselves up as a bank for everyone. One way the bank has established itself with such mass-appeal is that they shunned marketing that would be seen as cool and trendy. Instead, they positioned themselves as a trustworthy bank that customers can trust with their money - which certainly appeals to the high-income, older generation.

That doesn’t mean that Starling’s branding is completely without its quirks. It reimagined the common debit card by producing ones with a vertical design, rather than the traditional horizontal look that we’re all so used to. Starling just needs to be careful not to fall into the trap of catch-all marketing if they want to build a loyal customer base and stay in the banking game for the long run.

Monzo

Monzo is another of the neobanks that is doing particularly well with its brand awareness. With males and females in the 18-25 bracket, the brand scores 33.11% and 34.3% respectively. This percentage increases as people get older, and 62.96% of women and 63.71% of men aged between 56 and 65 know of the brand. In addition, the higher the education, the more people are aware of the brand.

Monzo rand awareness

The neobank can have the fact that it’s the UK’s most recommended bank to thank for these promising brand awareness figures. If it wants to keep this title though, it may have to think outside the box a bit more. Monzo’s brand awareness and marketing are very similar to Starling.

Just like Starling, Monzo created an equally eye-catching debit card, although rather than designing it in portrait, they colored it in neon orange. When early adopters were out flashing their cards, it got people talking, which helped with word-of-mouth marketing.

Monzo also forayed into offline marketing with its first TV advert in May 2019. The impact on brand awareness was noticeable immediately, as the following month was the brand’s best for sign-ups and brought in more than 250,000 new members. This could also help to explain why the brand scores better for brand awareness in older age groups. As Millennials and Gen Z are more likely to watch TV content on social media, they may miss these ads that appear on traditional TV channels.

One unique thing that can help Monzo hold onto its prime position is the Monzo Community Forum, users’ go-to place for voicing their queries and complaints directly to the brand. The brand’s sense of community also helped them find their footing in the market early on. Customers and employees regularly frequent the community, which helps give it a real sense of personal engagement. The forum doesn’t just benefit customers, though, as employees are able to suggest possible changes to the app and brand, letting the wider community cast their vote. For example, when the brand changed its name from Mondo to Monzo in 2017, Monzo was voted for by customers.

It will be interesting to keep an eye on the Starling versus Monzo battle as the years go on.

Cleo

Not all neobanks are doing quite as well with brand awareness as Starling and Monzo. Take Cleo for example. Its best performing demographic is 18-25-year-olds with higher education, but it still only manages to reach 10.76%.

Cleo brand awareness

Cleo does perform better with younger generations, compared to the other two brands we’ve seen. 9.37% of females and 7.94% of males aged 18-25 know the brand compared to just 3.45% of females and 3.11% of males aged 56-65. Brand awareness in this older age group is always weaker than younger ones, regardless of other demographics, too.

This may initially read as bad news for Cleo but it’s not. These insights show that they stand out with a niche audience that the other neobanks in this article don’t: 18-25-year-olds with higher education. Cleo can capitalize on this to accelerate growth and build a loyal customer base. In fact, they already are.

One reason why Cleo performs better with Millenials and Gen Z is its use of quirky chatbots. The bots can communicate usually boring and complicated information and advice on all aspects of banking in a fun and humorous way. The use of memes and emojis mixed in with regular bank-speak has really helped to win over its young target audience.

cleo chatbot

As well as using memes and emojis in chatbot conversations, Cleo also harnesses its power in their digital marketing as well. This might not be an older consumers’ cup of tea, who would prefer a more traditional image for a bank, but it certainly helps the brand build awareness amongst their younger target audience.

Monese

Monese will be glad to know that it has its own nice to tap into. The brand does quite well with the 26-35 and 36-45 age groups, especially those who have been in higher education (16.48% and 16.98% respectively). It might not be on the same level as Starling or Monzo when it comes to brand awareness, but this insight shows there is a space the bank can dominate.

Monese brand awareness

What was also interesting for Monese, that we didn’t see with any of the other brands, is higher brand awareness amongst those who live in urban areas. In the 26-35 bracket, 17.11% of those who live in one of the top 3 cities know the brand compared to just 10.92% of those in rural areas. This is mirrored in the 36-45 age group as it’s 17.13% vs 10.99% when comparing the top 3 cities and non-urban areas.

The brand’s rebrand in 2016 could be down to the appeal with middle-aged clientele. Monese decided to move away from a childish logo and built the new brand around values that would appeal to older consumers - trustworthiness, progressiveness, and showing a human side.

The bank has proven to be particularly popular with digital nomads interested in opening UK and EU bank accounts, as there is no need to provide proof of address when signing up to many of the high-street brands. The brand’s customer service is available in a number of EU languages, and it can be used alongside Apple Pay in a number of European countries.

This popularity with European expats could be one reason why the brand’s awareness rates are the highest amongst the 26-35 and 36-45 age groups and those who have been in higher education. Consumers who have come out of university and are at a stage in their career will be more likely to move abroad, compared to young Gen Z-ers and those who are older and potentially more settled in their life.

Final Thoughts

It’s easy to think that these modern neobanks are big hits within the Gen Z and Millennial generation, but as you can see from the data, that isn’t always the case. With some carefully tuned branding and marketing, even a neobank can easily target the older generations.

Right now, Starling and Monzo only really need to worry about each other; Cleo and Monese just don’t have the same levels of brand awareness. While this could be despairing for Cleo and Monese, our data shows that they have their own niche in which they are popular. They should take this niche and run with it to accelerate growth.

Even if you’re not in the fintech sector, you can still take this nugget of wisdom away for your brand. By targeting marketing and branding, you’ll be able to increase brand awareness amongst your chosen audience. Once brand awareness starts to get some traction, you can build on this and begin to work on branching out into other audiences or working on other brand metrics, such as equity and loyalty.

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