Rising interest rates and digital alternatives to traditional banking have American banks facing unprecedented competition for market share. One Accenture study estimated that digital alternatives could capture up to one-third of traditional banking revenue by 2020!
Executives at the nation’s leading banks understand that delivering an excellent customer experience provides a significant edge when it comes to attracting and retaining clients. Customer experience includes everything from how long customers wait in line at the bank and how tellers interact with customers, to the functionality of the bank’s mobile applications and website. How can retail banks improve customer experience to be more competitive?
To help retail banks realize the benefits of delivering an amazing customer experience, we’ve put together a list of ten ways to create a winning customer experience strategy in retail banking. Keep reading to find out how you can deliver on your customer’s expectations and win their loyalty for good.
1. Start Listening, Start Winning
Research conducted by Capgemini found that just 37% of customers believe that banks understand their needs and preferences adequately. While they can’t please every person all the time, any effort to improve customer experience needs to start with acknowledging that banks are missing the mark on what consumers really want. Retail banks that want to start delivering on those consumer preferences need to open their eyes, ears, and data collection capabilities (more on that later) to what consumers are looking for.
2. Branch Visits are Here to Stay…
Financial technology has revolutionized the banking system over the last ten years, but Accenture’s 2016 North American Banking Survey found that 87% of customers were still planning to walk into their bank branches in the future. While mobile and web-based banking applications are gaining popularity for daily transactions, that doesn’t mean that retail bank managers can turn their attention away from what goes on when customers walk through the front door. Most banking customers will still visit for in-person discussions about mortgages and investments, and it’s important to build loyalty through other channels that lead to more of those conversations.
3. …But Mobile Isn’t Going Away
At the same time, 61% of retail banking customers expect to have more online interactions across their customer lifecycle. This means that banks will have to continue expanding their web-based channels to include new types of transactions. Customers love being able to remotely check their balance, pay bills, move money, and update account information and settings, but could eventually expect investment purchasing and mortgage applications to be handled through web-based channels too.
4. Upgrade Your Branch Experience
Retail banks should pay special attention to what their customers experience as visitors to their brick-and-mortar locations. Simple amenities like a comfortable waiting area, access to hot coffee and snacks, the ability to take a number instead of standing in line, and a welcoming smile as they arrive can make a big difference.
5. Leverage Omnichannel Sales to Eliminate Silos
Multi-channel sales are playing a bigger role than ever in retail banking, with more banks allowing customers to open accounts online without making an in-person appointment. Still, a lack of integration between online and in-person sales processes can lead to repetitive and tedious banking appointments when a client is looking for a mortgage or setting up retirement savings or an investment account.
Omnichannel sales offer integrated channels where a sale can start online and end in a banking office. Banks are now able to collect data from customers across multiple channels to provide better-targeted offers.
6. Understand Market Segmentation to Increase Customer Satisfaction
It should come as no surprise that not all retail banking customers are looking for the same things, and it’s important to take a data-driven approach to understanding how to meet the needs of your target customers. Successful retail banks are already defining customer segments in terms of age, financial maturity, demographics, and other metrics. They understand that someone who set up a checking account five years ago probably has different needs now that they have a family and a house. The next step is to incorporate attitudinal data by demographic and start differentiating the needs of different demographics. A deep, data-driven understanding of each market segment is required to target the right offer to the right person at the right time.
7. New Account Now, Red Tape Later
A study by Accenture 2020 found that 30% of customers had switched retail banks in the last 12 months because of competitive pricing, great customer service, or better value. The ease with which customers can switch banks today is unprecedented, with many online banks allowing new account applications to be completed in just five minutes. For demographics that demand a convenient service, allowing quick registration for the most-needed financial products goes a long way in designing an experience that customers will love. Customers can always be contacted for additional details and service after the registration is complete.
8. Provide Exceptional Service with Appointment Scheduling
One of the best ways that retail banks can immediately improve customer experience is by offering a more convenient way to book appointments with staff specialists. An appointment scheduling functionality that allows customers to book appointments directly into the calendars of your staff can improve appointment show ratios and make sales happen more quickly. This offers the most convenient route for clients to access services that require a visit to the bank, and also minimizes the time they spend waiting once they arrive.
People wait up to an hour in the doctor’s office because they don’t have a choice. When it comes to banking, there are plenty of other choices.
Learn the key questions you should ask when considering an appointment scheduling solution.
9. You Can’t Win if You Don’t Keep Score
The most successful retail banks are adopting an omnichannel approach to sales and improving customer experience for both in-person and web-based interactions. If you’re excited about doing the same, it is crucial that you develop a strategy for capturing and understanding data about your clients. Put differently, if you’re serious about improving your customer experience, you have to define what that means to your bank and how you can start collecting data to determine whether you’re succeeding. Here are some metrics you could start with:
- What is the average wait time for an appointment at this branch?
- What is the lag time for someone who wants to book an appointment at this branch?
- How many minutes does it take to set up a new account here?
Improving customer experience starts with understanding what the customer wants, capturing how well you’re delivering it to them, and then determining how you can improve the service delivery for the next customer. If you’re not capturing the data that you need to evaluate success, you could be spinning your wheels and not even realize it.
10. Innovate, Innovate, Innovate
Innovation is the value that underlies the desire to do better. Building your customer experience strategy in accordance with what your customers really want means being a good listener, even if your customers want something that has never been done before. Innovators lead the way in retail banking, and the rest of us are left to follow in their footsteps.
Here’s the good news about retail banking in 2018: A McKinsey study found that improving customer experience increased the likelihood of service renewal or new product purchases in the retail banking sector by 30-50% for consumers. There is a huge potential benefit for retail banks willing to listen to their customers and deliver on the service they’re looking for. Follow our tips and advice and get started!
I'm an expert in retail banking and customer experience strategy, with a deep understanding of the challenges and opportunities facing banks in today's competitive landscape. Over the years, I've closely followed trends, conducted research, and implemented strategies to enhance customer satisfaction and drive growth in retail banking institutions.
The article you provided touches upon several key concepts in the realm of retail banking and customer experience strategy. Let's break down the main points and elaborate on each:
Digital Disruption in Banking: The article highlights how rising interest rates and the emergence of digital alternatives pose significant challenges to traditional banks. The Accenture study cited indicates that digital alternatives could capture a sizable portion of traditional banking revenue by leveraging technology and innovative services.
Customer Experience (CX) Importance: Executives in leading banks recognize the critical importance of delivering an excellent customer experience to gain a competitive edge. This encompasses various touchpoints, including in-person interactions at branches and digital experiences through mobile apps and websites.
Improving Customer Experience in Retail Banking:
- Listening to Customers: Banks need to better understand and address customer needs and preferences. Research by Capgemini underscores the gap between customer expectations and banks' understanding of those expectations.
- Branch Visits and Mobile Banking: Despite the growth of mobile and online banking, physical branch visits remain relevant, particularly for complex financial discussions. Banks must balance investments in both physical and digital channels.
- Enhancing Branch Experience: Simple amenities and a welcoming atmosphere can significantly enhance the branch visit experience for customers.
- Omnichannel Sales and Integration: Banks should offer integrated channels for seamless customer experiences across online and in-person interactions.
- Market Segmentation and Personalization: Understanding diverse customer segments and tailoring services to their specific needs is crucial for increasing satisfaction and loyalty.
- Streamlining Account Opening and Service Processes: Simplifying account opening procedures and reducing bureaucratic hurdles can attract and retain customers.
- Appointment Scheduling and Service Excellence: Offering convenient appointment scheduling options and minimizing wait times can enhance customer satisfaction.
- Data-Driven Decision Making: Banks need to collect and analyze customer data to measure performance and identify areas for improvement.
- Embracing Innovation: Innovation is key to staying ahead in the retail banking landscape, as it enables banks to meet evolving customer demands and preferences.
In conclusion, the article emphasizes the significant impact of customer experience on retail banking success and provides actionable strategies for banks to enhance their customer-centric approach. By prioritizing customer needs, leveraging technology, and fostering a culture of innovation, banks can differentiate themselves and thrive in an increasingly competitive market.