1. MARKET SITUATION

Belgians are known to be very risk averse people. They prefer security above all else and like to know what they're in for beforehand. This need for security also plays a big role when it comes to making financial decisions.

Belgians like their money where they can see it, either on their bank account or in bricks. This has made them one of the most avid savers in the world with a record high of 281 billion euro parked on Belgian savings accounts (NBB, 2020). Per household, this equals a saving rate of almost 12% while the European average is 10% (Eurostat, 2018). This also impacts Belgians' investing behavior, resulting in only 1 out of 3 Belgians actively investing their money (Spaargids.be, 2017).

For KBC this is a fundamental problem. Being able to activate savings is crucial for the bank because of profitability. Especially in times of a historically low interest rate, where banks don't earn any money on these savings instead it costs them. Clients who actively invest - instead of only saving - are proven to be more profitable. Likewise, investors are proven to be more bank-insurance stable than savers. This means that through investing, the bank is able to secure capital over a longer period of time and is able to build more profitable long-term relationships.

But in order to achieve this profitability, banks first have to succeed at turning more clients into investors. Despite countless incentives and communication efforts, there is still a general bad perception surrounding investing. Resulting in a lot of misguided beliefs. Recent research by Profacts (2019) shows that the perceived lack of capital is the number one reason for consumers not to invest, amplifying the belief that investing is only for the few. Followed by the fear of losing money, amplifying the belief that investing equals taking big risks. And thirdly having insufficient knowledge, feeding the belief you need to be an expert in order to invest. All of which form barriers that keep people from investing.

So how can KBC break this status quo and convert more clients into investors while at the same time building more profitable long-term relationships?

2. OBJECTIVES

The overall ambition of KBC was to create a unique campaign that activated a new and more profitable group of clients to start investing, by initiating a movement and making the bank gain leadership in the investing segment.

Business objectives

• Double the amount of in-app round-to-euro activations in comparison to the average number of monthly activations (1250) during non-campaigned months.
• Increase the number of overall investment plans sold with at least 10% during the campaign period.

Behavioral objectives

• Attract new, first-time investment clients that weren't investors before.
• Address a new audience of investors with long-term potential for the bank in terms of profitability.

Perception objectives

• Generate positive effects on the brand familiarity of KBC among the target audience.

3. STRATEGY

For a long time, banks have tried explaining the importance of investing through arguments of reason. Hoping that 'thinking about it' will eventually push consumers to actually 'start doing it'.

But this tried and tested method never turned out to be very successful. Instead of activating people's savings and encouraging them to invest, this normative and rather instructive approach has created an investment fatigue amongst consumers, reinforcing the already existing skepticism and misguided beliefs amongst consumers.

So if we can't convince people to start investing through arguments of reason - first thinking about it and then doing it - KBC needed to do things differently. How? By making a radical and daring shift: letting people 'first do it' and only then 'start thinking about it'. For this to happen, KBC needed to remove every barrier or argument people can possibly have when it comes to investing. Literally.

KBC had the perfect tool to put this new strategy into practice: round-to-euro (R2€). Through the R2€ feature in the KBC Mobile app, clients have the possibility to invest their spare change with every transaction they make. The amount they have to pay is rounded up to the next euro and the difference is used to invest. This means KBC clients are able to invest with money they won't miss and don't really need; the spare change they even forgot they had. Using spare change as a vehicle to facilitate investing took away the existing psychological barriers and turned investing:

• From something that asks a lot of money to something you can do with the littlest of money (capital barrier)
• From something that requires taking risks to something you are in control of
  (risk barrier)
• From something that asks a lot of knowledge to something that everyone can do (knowledge barrier)
• From something that is complicated to something that is as simple as enabling an in-app feature (complexity barrier)

This was a bold choice for KBC because for the first time all communication effort was put on R2€, an in-app feature that - as such - is not the key driver of investment income. Therefore, the objective was bigger than just making people activate an in-app feature. It was about turning savers into investors and changing the overall behavior within the investment category.

4. RESULTS

Business results
8.794 new activations of the in-app feature, equaling an increase of 252% compared to the average of non-campaigned months and an average uplift of 62% in overall investment plans sold during the campaign period.

Behavioral results
Created a new audience of investors with high long-term potential in terms of profitability; greater monthly income, greater available capital, higher loyalty and younger. 68% of them were first-time investors.

Perception results
Overall brand familiarity increased with 8,7% among the target audience. But converting people into the R2€ application was never the only objective. Knowing that the win in average gross income of investors is bigger than that of non-investors, the real created value amounts was far greater. In total the campaign will generate additional gross income of € 25m for the bank and this over an average investment period of 15 years. But the campaign did more than generating profit for KBC. It succeeded at convincing 14.506 additional Belgians to stop the vicious circle of value-destroying savings (due to negative interest rates, cfr. context), turning lost spare change in additional purchasing power.