Editor's note: Last week, D3 hosted a webinar on customer loyalty, local/regional vs. national institutions and personalization.
There is a lot of noise in the industry around an assumed level of consumer dissatisfaction with their financial institution and what consumers really want and expect from their bank or credit union. A recent survey conducted online by Harris Poll on behalf of D3 Banking Technology found that 74% of respondents are satisfied with their financial institution and would even recommend their bank or credit union to family, friends and colleagues. But why?
D3 hosted a webinar with the Consumer Bankers Association (CBA) last week that featured Alex Jimenez, senior strategist for Zions Bancorporation, Ginger Schmeltzer, principal of digital banking and payments for GDS Advisors, and Michael Carter, EVP of digital banking for SRM Corporation, to discuss and highlight the results from the survey. The three industry experts provided commentary and practical insights on what drives customer loyalty as well as guidance on what financial institutions can do to sustain and increase loyalty.
Five key takeaways include:
- According to the survey, 82% of respondents were willing to recommend their financial institution based on good customer service, more specifically, good customer service in-branch as the top reason (65%). However, as digital becomes a channel that’s leveraged more frequently than branches, banks and credit unions must find ways to maintain this high standard of service through their digital offerings.
- The survey results demonstrated that size does matter. Nearly three in five Americans (58%) would prefer to bank with a local/regional financial institution over a national one. The top reason cited is better customer service (59%) and of the consumers that prefer to bank with a national institution over local/regional, 42% said it’s because they offer a better digital banking experience. The survey numbers demonstrate that it’s the community and regional institutions’ game to lose, and considering that $2.4 trillion of deposits have flowed into the largest banks since the birth of the smartphone, they are losing it. If the community and regional banks and credit unions want to compete, they must address digital in a comprehensive way sooner rather than later.
- Offering a seamless digital experience is expected, however, that is not enough. In addition, institutions must be able to anticipate customer and member needs. More than three in five Americans (61%) want their financial institution to anticipate their financial needs the same way online retailers do. Small acts of personalization and anticipation make a big difference such as sending customers a happy birthday note or offering specialized lending options at relevant times.
- While tech giants and emerging fintechs may seem to have the inside track when it comes to collecting personal data to help meet customer needs, more than three-fourths of Americans (78%) would feel more comfortable with their financial institution having access to their personal data than a large technology company. This trust could be critical to allowing greater levels of personalization and expanding digital services.
- While banks and credit unions are trusted by consumers, they must expand their digital offerings to remain competitive and own customer and member satisfaction moving forward. FIs no longer function like utility companies; they’re now retailers that must cross-sell. Every member of the executive committee and board of directors needs to be onboard with this way of thinking and conducting business for a bank or credit union to be successful. If financial institutions don’t have buy-in from the top to approach digital as more than just a product upgrade, chances are, success is going to be limited or short-lived.
If you missed the live event, you can review the slides as well as the full discussion online.