As banks continue to prioritise online over physical channels, traditionalists still complain that banks have lost touch with their role in the centre of their communities.

I’d like to argue that this is not just a cliché, it’s actively untrue. Bank communities are on the cusp of flourishing as never before - online.

There are many examples of successful brand communities - Lego, Harley Davidson and Playstation, to take a few leisure oriented examples. But the desire to participate and connect online extends to personal finance too - H&R Block’s community lets users talk about tax. MoneySavingExpert’s Forum is an essential part of the brand.

Banking is better with friends

Fidor Bank’s experience shows that communities work brilliantly for banks too. In fact Fidor’s online community now has close to one million members. That’s nearly a million people getting personal finance advice from old and new online friends, reviewing, rating and and even suggesting new products, forming special interest groups, sharing information and, all the while, being rewarded by Fidor through rankings and even monetary rewards.

But our experience is that they aren’t just doing it for rewards. The fact is that people like to help each other, and that’s no different online. They like to feel part of something and to contribute - the IKEA effect is a well-known cognitive bias that causes people to value more highly things they help create.

Brand communities are great for customers. They are even better for the bank. The average banking NPS is 35. Fidor Bank ( as the first bank to launch a community) has a net promoter score of +70.

Everyone benefits

Fidor’s community benefits the bank in multiple ways. We’ve seen that it’s great for NPS. In fact it’s good for loyalty in general. Consumers like brands that share their values and vision and the co-creation aspect of the Fidor community allows the member to help influence these aspects. It also reduces churn, important as regulators make it easier to switch banks.

The community is more than a loyalty vehicle though - it forms a key part of bank strategy, impacting all elements of the customer experience, from initial contact through onboarding and onwards.

Fidor Bank makes community membership open to non-customers as well as customers. That means that anyone looking online for advice can join and benefit from participation. From there it’s easy to risk assess and convert them to becoming a customer. This removes the expense of advertising and reduces customer acquisition costs down to far below the industry standard of €60-120.

It’s easier for the customer too as it spreads the burden of KYC. Because community members have to provide basic information to join, the conversion process is less onerous in KYC terms for the customer than signing up as a customer immediately.

It cuts costs in the area of customer support. Many queries will be answered by the community, reducing the need for support agents.

This also provides a better experience for the person asking the question; they no longer need to wait on hold, listening to terrible music, to get an answer. They also gain far more from the experience of hearing from other customers who have been in similar situations than they would from a support agent and they also benefit from the opportunity to boost their knowledge about personal finance from being on the forum.

Thirdly, those giving advice benefit too because gamification elements motivate community members to take on this role.

The community also allows the bank to keep track of what customers want and what is making them unhappy, without the expense of commissioning research. This invaluable data helps drive the product innovation roadmap and highlights problems at an early stage. It can also provide valuable intelligence on what competitors are doing.

It’s not enough just to set up a community though - it has to be active and well managed too. That requires social media engagement skills. Some of this comes from community participants, who are rewarded with bonuses and incentives (Fidor Bank uses Karma Points and cash rewards) and some of it from forum administrators who can intervene to maintain quality content and a healthy dynamic.

Fidor customer banks are benefiting from communities too, adding their individual value to the mix. For ADIB with www.moneysmart.ae, the community was one of the biggest reasons to work with Fidor. Its goal was to increase financial literacy among Gen-Y - their community plays a key part in this.

If banks want to keep their brand visible in today’s world, relying on traditional marketing is no longer enough. Instead, communities will play a vital role. Increasingly, because banks are no longer at the heart of the community, community has to become the heart of the bank.