By D.J. HaskinsAs financial institutions race to adopt new digital technology and transform their online capabilities, many overlook defections. Nearly 25 percent of households are vulnerable to switching financial institutions.
Because this metric is reliant on a variety of factors, the first step is understanding why customers switch outright. By identifying the reasons that customers want to switch, and marketing to your strengths in association with those pain points, financial institutions will be able to attract vulnerable customers into their financial institution.
Rivel, a data-driven management consultant firm, recently completed the Rivel Banking Benchmarks, the largest syndicated brand and customer experience study in the world. The survey interviewed customers and prospects of more than 3,000 banks and credit unions across the United States, conducting more than 180,000 annual interviews. In 2020, the survey was able to evaluate the effect that COVID-19 has had on defections and highlight the pain points for vulnerable customers.
The survey revealed that while in the throes of the pandemic in 2020, bank switching was almost nonexistent. This could be attributed to the physical barriers of going to a branch to close an account, but also the tendency for customers to avoid changes during times of crisis. However, as more operate within the new normal, the rate at which customers are switching financial institutions is increasing. Approximately 7 percent of households changed in October 2020. Currently, the total number of people vulnerable and open to switching financial institutions is roughly 29.9 million households and 8.3 million businesses. But what are the reasons driving them to switch, and how can financial institutions take advantage of that?
The survey continued its research to find that two out of the four top reasons customers cite for leaving a bank or credit union have to do with their customer experience and not with rates: lack of proactivity across digital and human channels and inadequate technology training when asking for digital support.
To truly reduce customer frustration and account holder defections, financial institutions must assess their own current customer experience to ensure that it is succeeding in the areas that are causing customers to leave. Self-assessment can be a key tool to retaining these vulnerable customers. Here are five key concerns:
Are you surrounding your customers with access to information?
Not all customers are the same. Some customers may want to use search, while others may turn to virtual assistants. They all crave access to information whenever and wherever they need it. By supplying navigation beacons, financial institutions can improve customer experience while meeting individual customer needs. Navigational beacons, such as live chat, search, virtual assistants and contextual FAQs, guide customers by delivering easy-to-find answers through a variety of channels. In addition, by providing these options, it increases digital adoption and conversion while reducing the volume of contact center inquiries.
Are you providing the right prompts at the right time?
While this can often be overshadowed by more pressing components of customer service, it can make a large impact. Contextual guidance, such as prompting customers with questions or content needed at an opportunistic time, is essential to creating a meaningful, streamlined digital experience. By being proactive and attentive to the details, financial institutions will be able to create a seamless experience that increases adoption, reduces abandonment rates, makes customer support inquiries less frequent and removes friction. Offering appointment scheduling to connect customers directly to subject matter experts is yet another opportunity banks can seize to offer exceptional customer experiences.
Additionally, banks should look to business leaders in other industries to inspire their own digital experience. For example, many digital-only brands, such as Amazon and Netflix, anticipate the next step in a customer interaction and supply contextual guidance to solidify that action. By looking to these industry leaders as inspiration, financial institutions can create a digital presence that can stand on its own.
Are you delivering access across all digital channels?
Financial institutions should seek to provide customers with access to information through a customer’s preferred channel, whether in-person, online or mobile banking. Mobile and online banking are often considered tools that banks provide to their account holders. However, mobile and online banking are best considered extensions of the branch.
Are you empowering your frontline staff?
If the financial institution provides navigational beacons, contextual guidance, appointment scheduling and access across digital channels, the number of support inquiries greatly decreases. These components allow customers to utilize self-service to answer their simple inquiries on their own time and in their own way, allowing for frontline staff to spend more time guiding customers through complex questions. By eliminating time spent on answering simple questions, banks and credit union can support staff to lead customers to the right answer, faster.
However, to be productive and efficient, staff must be able to receive the most up-to-date information quickly and without friction. By centralizing updated information, knowledge management tools supply employees with easy-to-follow and easy-to-find information to share with customers. With this knowledge, staff can better inform and educate customers on their inquiries and needs. Enterprise knowledge management allows frontline staff to deliver quick, consistent answers to customers’ questions at their convenience.
The bottom line
As lack of proactivity across digital and human channels and bad technology training when asking for digital support stand as two of the top reasons that customers switch, financial institutions should consider how their own customer experience matches these pain points. By delivering better service, support and customer experience, financial institutions can avoid the loss of customers primed to leave, while attracting those seeking an improved customer experience.
D.J. Haskins is senior director of marketing at TimeTrade SilverCloud, headquartered in Tewksbury, Massachusetts, offering self-service, knowledge management and appointment scheduling solutions.