Traditional banks continue to hold a major market share, yet an increasing number of consumers are embracing digital or neo banks and other fintech companies for their banking activities and value-added services.
This is seen mostly today among digitally savvy younger generations/millennials, who are averse to visiting physical bank branches given their preference for real-time, 24/7 banking solutions available at the tip of their fingers. A study found that 46% of people exclusively use digital channels for their financial needs, hence it is not surprising that fintech is among the fastest-growing industries in the world.
Traditional banks’ monolithic legacy systems and a reputation for slower innovation have led 81% of banking CEOs to be understandably concerned about the speed of technological change.
Most traditional banks are pursuing multiple digitization and innovation initiatives to ensure a customer-centric perspective rather than their age-old focus on just products. By embracing cutting-edge technologies such as augmented reality, blockchain, robotic process automation (RPA), and artificial intelligence (AI), they are trying to forge ahead to keep pace with their more agile online-only competitors.
Increasing customer retention has a significant impact on company profits. International Banker, Bain & Co research, reports that “increasing customer retention rates by 5% can increase profits by anywhere from 25% to 95%.”
The modern banking customer journey does not begin just at a branch location today. It starts with one channel, nurtures into other channels, and concludes with another channel. Hence, the time to ensure that the strategy, systems, tools, and processes are agile enough to kick off the sales process in one channel and switch over to another to close the deal. Throughout this process, Customer Experience is the key to success.
By the strategic setting of channel priorities and investing in the right infrastructure to deploy multichannel/omnichannel efforts, banks can navigate quickly shifting and evolving marketing channels and effectively drive customer acquisition.
91% of customers expect their brand experiences to be seamless, no matter where they are and irrespective of what channel they’re surfing.
Omnichannel marketing strategy– Stay ahead with reliable advertising intelligence to develop efficient media strategies across channels and differentiate themselves from their competitors.
Personalization at scale demands recursive learning, a single view of the customer, and a personalized curriculum (a sequence of interventions that are intended to change a customer’s behavior).
Translate data into personalized products and real-time offers across all channels, products, and services.
Customer-first experience – systematically redesign and reengineer the customer journeys at scale.
Ensure retention and use customer advocacy to drive referrals.
Hardwire customer experience to value.
Choice of products Develop cutting-edge digital sales capabilities capturing data & insights on which financial products are desired and gaining traction by customers thus converting inquiries into sales. Leverage insights to develop innovative products and unique features to go beyond purely traditional financial services & products.
Leveraging social media A good social media presence not only ensures simplified access for potential customers but makes it easy for those already on board to encourage referrals. 59% of consumers use social media as buying inspiration.
Prioritizing reviews management A study has shown that customer reviews are five times more influential than TV advertisements and six times more than social media ads. Financial institutions need to ensure that they consider online review management in their customer acquisition strategy. This includes acting on both positive and negative reviews and using the positive reviews to improve search visibility while simultaneously analyzing data to extract valuable insights. Reviews are very important to 55.2% of consumers when it comes to finding a new bank.
Instill a service culture Most banks think that customers consider banking interactions to be transactional, but little do they realize that significant benefits await those institutions that build a customer service culture. A study has shown that 86% of consumers are willing to pay more for great customer service and banks that stay connected with them post-transaction, offer VIP programs, and even acknowledge them by name can go a long way to fostering loyalty and trust and, in turn, improve customer acquisition and retention.
Customer experience The age-old habit of opening an account with one bank and staying with them for life is long over. It has never been easier to switch banks and financial institutions precisely why customer experience is as important as the products, prices, and rewards programs they offer. This is also seen by the results of a study that found 69% of customers who planned to leave their bank said it was due to poor service rather than poor products. Hence, it is not a surprise anymore that banking experts are leaning towards a greater focus on customer experience as the decade unfolds.
Automation of acquisition strategies Using automation to identify the key retention levers and enabling them in a contextual employee experience can reduce costly turnover and help an organization acquire & develop talent.
Banks and other financial institutions that frequently feel the pulse of evolving consumer demands and expectations are the ones most likely to acquire new customers.
In the face of changing demands and preferences, you need to build a customer acquisition strategy that nurtures your brand’s digital presence, enables insights from review data and feedback, and puts the customer at the forefront. By following the above 9 focus areas, you can position your company to drive customer acquisition and retention.
