High street banks have spent decades building up customer trust and loyalty. Their branches, a familiar sight across most UK towns and cities, provide a space where customers can seek advice and assurance around their personal finances. As such, banks’ physical
buildings have come to symbolise their overall reliability and stability, underlined by the fact that many are housed in historical or listed buildings (Lloyds Bank in Canterbury
is one notable example).
Yet, thanks to a digitalised world, many of these same banks are now retreating from the high street. Indeed, according to research from
Which?, nearly 5,800 UK bank branches have shut their doors since 2015. This is largely thanks to the availability of mobile banking and an increasingly digitally capable population. As a result physical branches are not seen as a worthwhile continued investment.
However, without the tangible anchor of their time-honoured buildings, legacy banks are now faced with a new challenge: retaining their perceived customer engagement edge in a digital world with myriad competitors. The answer lies in hyper-local marketing;
that is, leveraging digital advertising to foster meaningful connections with customers at a community level.
Reinforcing trust through localised engagement
High street banks’ perceived trustworthiness is, arguably, their greatest advantage and they should continue to tap into this as they move away from the physical high street.
Through hyper-local digital marketing, banks can exhibit an understanding of local economic conditions, cultural events and customer preferences. For instance, promoting a first-time buyer mortgage product in an area with a high percentage of young renters
speaks to the specific customer base in that location. Tailoring messaging and offers to specific neighbourhoods, in this way, generates “fellow feeling.” In practice, this means that customers feel their personal and local circumstances are recognised by
the bank and, as such, are more likely to place their trust in it.
Moreover, leveraging digital social media platforms allows banks to engage in community conversations and showcase their commitment to local economic growth. A bank may no longer have a physical branch in a town but by sponsoring local initiatives and providing
financial education workshops, it can still maintain a strong presence.
Overcoming the “slow-moving” perception to compete with neobanks
Although many are investing heavily in technological transformation, traditional banks are still laboured with a reputation of being slow to innovate. Meanwhile, neobanks – the likes of Monzo, Revolut and Starling Bank – are winning the digital banking battle.
Their online-only offering and brightly coloured bank cards might appeal to a younger, digitally native consumer base; however, much of their success is actually driven by the way in which they’ve embedded a sense of agility into their DNA, partly driven by
their digital marketing.
For example, Monzo built its early success through referrals and organic social media engagement. Its strategy is focussed on ‘meeting its consumers where they are’, such as through
TikTok memes and emoji-heavy, relatable content. This creates a sense of a cohesive community and as CEO TS Anil put it, an “intimate” connection with consumers. By contrast,
for Gen Zs and millennials, who expect immediacy, personalisation and a frictionless banking experience, traditional banks may appear slow-moving and disconnected from modern customer expectations.
To address this shift in consumer preferences and reinforce their presence without, necessarily, a physical footprint, high street banks must look to hyper-local marketing. By using location-based insights, brick-and-mortar institutions can demonstrate responsiveness
and relevance in real time while also capitalising on their existing strengths. For instance, geo-targeted campaigns allow banks to deliver location-based promotions for a particular time period, such as discounts with local retailers or cashback offers for
spending at nearby businesses. By adjusting marketing messages based on local economic conditions and refreshing those messages regularly to maintain local relevance, traditional financial institutions can showcase their adaptability.
Furthermore, a hyper-local strategy enables banks to precisely address the specific needs of different demographic groups within a single geographic area. While first-time savers might respond to promotions linked to local restaurants or entertainment venues,
retirees might appreciate targeted content around pensions. For example,
Yorkshire Building Society used hyper-localised sponsored posts to engage with audiences with an active interest in the economy and managing their savings. Responding to different groups in this way helps legacy institutions strengthen and expand their
existing customer base.
The heart remains the same
Regardless of the impact of technology, the essence of banking is still rooted in building trust, creating strong customer relationships and engaging with the local community. Physical branches may once have represented all of these things, but high street
banks must now look to the digital future.
By embracing the power of hyper-local marketing, through platforms like Nextdoor, and creating a personalised digital experience, traditional banks can continue to serve their customers in a meaningful way and re-assert their position as trusted financial
partners. In doing so, they will bridge the gap between tradition and innovation, ensuring that personal service and community connection remain at the heart of banking in the digital age.