How to become your customers' primary financial institution
How do you become your customers’ primary financial institution? You appeal to them.
It’s a short answer – and the short answers are always easier said than done. Simply put, understanding your many customers’ needs and expectations allows you to better serve them, and by improving service you’ll increase customer satisfaction, loyalty, and retention.
In March 2017, Vantiv and Socratic Technologies conducted an online survey, receiving responses from 502 consumers. Asked about their banking experience and expectations, here’s what those responders shared:
Millennials gravitate to larger banks
28 percent of millennials bank with Bank of America and 20 percent with Chase. Both banks are technology leaders in the banking industry and offer millennials a variety of banking services and digital applications.
Type of financial accounts vary by generation
It’s no surprise that Retirees (14 percent) are the least likely to have a mortgage or home loan compared to other generations. Millennials (21 percent) are more likely to have auto loans compared to Boomers (12 percent) and Retirees (8 percent). Millennials (21 percent) are also more likely to have business accounts compared to other generations.
Millennials’ needs differ from other generations
While locations of bank branches (45 percent) and ATMs (41 percent) are important reasons for millennials when selecting their banking provider, other features carry significant importance compared to older generations:
- Mobile banking app (31 percent vs. 12 percent)
- Debit card rewards (24 percent vs. 8 percent)
As a generation of connected consumers, 19 to 35 year olds are set to become the largest customer segment the U.S. has ever known. By 2025, Visa expects millennials to represent 75 percent of the workforce, eclipsing all other generations in personal income, pocketing 46 percent of total U.S. income. And as with their other networks, millennials reported a high level of significance in their banking connections: the quality of the mobile app and the usefulness of their debit cards’ features. A personalized banking experience is critical for this segment – and for your institution.
Creating easy-access, digital channels should be a priority not just for millennials, but for a growing population of all ages. According to a 2015 CEB survey, 57 percent of bank customers in the U.S. and Canada prefer digital channels for their banking, which has grown since 2013 (49 percent) and 2010 (42 percent).
Let’s review some key takeaways from its findings concerning digital customers:
- Historically, digital customers have tended to have more assets.
- However, only 25 percent of digital customers use just one bank.
- Furthermore, digital customers of all ages are more likely to spread their balances across multiple providers.
Their research shows that digital banking is an important deciding factor for choosing a financial provider, although the data also highlights that among those users, a primary FI is lacking.
How do you use digital technology to promote a more personalized – and primary – banking experience?
The CEB/Gartner study found that more bank customers valued “staying on track” features as the most important activities offered by their institution. Providing tracking features such as the ability to monitor finances, avoid overdrafts, pay bills, and control their spending habits, institutions increased customer loyalty by making such features available digitally, all from the convenience of their customers’ mobile devices.
As Nicole Sturgill, an executive advisor at CEB/Gartner, stated in the report, “If you want to tip the balance of value back in your favor and boost growth, the way to do it is to help customers with the pivotal steps that they have to take toward their goals.”
In addition to giving your customers free services and convenient branch locations (both rated most important features), providing a personal connection to your services through digital channels can give your institution the advantage to grow to become their primary provider. Knowing how best to serve your customers is achieved by understanding how they prefer to manage their finances – and is key to mitigating risk and developing adoption of new ideas for the future of your financial institution.