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When Functionality Isn’t Enough: Tapping Your Customers’ Emotional Needs

As consumers spend less time in branches and increasingly turn to non-bank providers for day-to-day cash management, banks must stay relevant by tapping into the emotional and financial needs of their customers.

New research conducted by Novantas explored the way that money makes people feel — from anxiety about paying the gas bill to their desire to give back to the community when they are financially set.

The upshot: people’s emotions over their finances run deep, but banks aren’t doing enough to connect their offerings to the way consumers feel about their money. As a result, banks face imminent disruption to those existing relationships and are missing out on opportunities to acquire new primary customers.

Such a strategy underscores the evolution of the traditional banking system from its initial role of being the ultimate financial intermediary that created value by accepting and protecting deposits, facilitating payments and making loans. Banks these days aren’t the only viable option; they are often bested by upstart financial services providers and technology companies that are attractive because they make money-related tasks faster and easier to complete.

As a result, it is incumbent on banks to achieve true differentiation in ways that are relevant to customers.


Novantas partnered with Sylver Consulting (a research and strategy firm based in the Chicago area) for the latest research, using an artificial intelligence-powered online platform to conduct qualitative interviews with 306 consumers. (see Figure 1).

First, we dove into consumers’ money-related pains — what keeps them up at night, where and how they feel held back in life, and, specifically, what a “bad money day” looks like for them. We also explored the positive — how money enables consumers, their aspirations, how money helps them achieve those goals, and what makes them feel accomplished day-to-day as it relates to money.

The responses fit into three categories of what the respondents believe is important for money to enable (see Figure 2):

Self-sufficiency: This is the level where consumers experience the most basic and immediate financial needs (e.g. paying this month’s gas bill). Consumers are most concerned with being independent and confident in their ability to take care of themselves, contributing to a sense of self-worth.

Financial comfort: Here consumers are less concerned about paying the bills or having enough money, are beginning to feel more secure and stable financially, are able to increase their discretionary spending, plan for future expenses, and experience less stress overall.

Ability to give back: Ultimately, consumers desire to invest in their own future and that of others’, giving back to communities and causes they care about and no longer being as inward-focused and worried about individual or family needs on a day-to-day basis.

Despite banks’ inability to deliver value to customers beyond basic functional benefits, the reality is that money is a deeply-emotional part of people’s lives. Money (or the lack of money) has the power to trigger negative emotions like fear, anxiety, hopelessness and confusion, as well as positive feelings of control, freedom, empowerment and accomplishment.


The path for banks to differentiate from one another will depend upon their ability to create and articulate emotional and social benefits, delivering them on top of leading functional proof points. This isn’t a one-or-the-other proposition: banks must still deliver adequate functional benefits and create sufficient perception of them in the marketplace, while at the same time connecting them to consumers’ higher-order emotional and social needs.

If this was easy, we would see more examples of it. As it is, we only have a couple.

Two of the best examples of distinctiveness come from Huntington and USAA, both of which have created unique positions built on consumers’ non-functional needs and supported by market-leading products and service.

Huntington’s “Fair Play” initiative, supported by the 24-hour grace period it provides customers before charging overdraft fees, is a good example of a bank leading with an emotional benefit and delivering on it functionally. From a business perspective, that position has created a customer acquisition advantage for Huntington in its regional footprint.      


Our qualitative research also revealed five key themes of benefits consumers want banks to deliver, with each being strongly tied to the values that money enables.

Show me you care: Consumers require that banks treat them with respect and demonstrate appreciation for being a customer. To prompt consumers to switch, a bank must convey that it understands its customers and their individual goals, makes them feel unique, and acts as a partner whom their customers can count on.

Teach and empower me: Consumers want their banks to teach them to be financially literate, a desire that gives banks an opportunity to differentiate themselves by offering educational opportunities that empower customers to take charge of their finances. Banks must do a better job connecting financial education efforts to higher-order emotional needs of consumers, ultimately helping them achieve their personal and financial goals.

Meet my needs: Consumers want to feel secure and protected financially. They want their bank to be easy to work with, and they demand access to products tailored to their needs. Meeting higher-order consumer needs means that banks communicate with customers in a way that builds trust and makes customers confident the bank is serious about delivering on its promises.

Reward me: Consumers believe their bank should be transparent about fees and rates. Banks can attract new customers by rewarding them for loyalty, customizing rate and fee structures, and sharing in the bank’s success.

Bring the bank to me: At the least, consumers expect banks to keep up with technology and stay digitally relevant. Interestingly, having branches nationwide was mentioned frequently by consumers as a value, but it wasn’t a priority when they had to choose among other factors. This validates trends Novantas has previously identified in other research projects.

To deliver true value to consumers — not to mention differentiated value — banks must decide which set of core money goals they want to help consumers achieve. Banks’ ability to align themselves first with consumers’ goals and values, while also delivering top products and services, will determine which providers will experience success in the new world of retail banking.

Banks that don’t align with consumers’ emotional needs risk being usurped by technology-first providers that merely provide a more seamless banking experience.

Matthew Sharp
VP of Market Research, Chicago

For more information, contact Novantas Marketing

+1 (212) 953-4444

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