We know that banks and credit unions have long relied on inertia as one of the primary forces that kept consumers from switching. You literally had to be driven away by horrible service or high fees – it was just way too much of a hassle to change accounts, get new checks and set up all that automatic bill payment stuff. Most customers did nothing.
Now, however, research suggests changing banks has become a more appealing option than it has been in the past. And easier. New research from Resonate, a consumer research company, suggests that people planning to switch banks in the next year are 16% more likely than the U.S. population to value innovation when selecting financial services products. “Innovative” is an attribute that stands out in terms of differentiation. That correlates directly with “better online and mobile banking services.”
In the past, the reasons people changed banks were typically related to changes in life circumstances – moving to a new city, changing jobs, getting married or divorced. The reasons driving people to change banks now focus on pricing and digital banking capabilities.
In fact, Resonate’s research suggests that there are 5.6 million people in the U.S. who plan to switch banking providers in the next 12 months. And women are the segment identified as most likely to make a change – 53% of them say they may change institutions soon, and the top reasons include more convenient branch locations (34%), better customer service (19%), and better online/mobile banking services (19%). Women also complain that banks don’t communicate with them often enough, and they generally don’t feel valued as a customer.
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Men also give similar reasons for switching financial institutions – lower rates/fees (43%), more convenient branch locations (32%), and better online/mobile banking services (21%).
Research by Sells Agency found only 5.5% of customers said they chose their current banking provider because it was “local,” and even fewer (3.5%) cited the bank’s “good reputation.” Just 3.5% said they were attracted to their new bank’s products.
According to the Sells Agency report, 30% of the respondents indicated that “services quality” was the biggest different between their bank and its competitors. Less than 10% said there was no difference between their bank and another. The lack of loyalty makes you wonder how you can win and retain those types of customers?
At Perficient, we think one of the approaches to this challenge is for banks to employ data-driven intelligence to a number of different processes, from product recommendations to the way fees are applied. Banking customers want more personalized services and technology, which is why some of the big tech companies like Amazon, which have built successful personalization business models, are interested in entering the financial services business.
We have deep experience in successfully implementing advanced analytics solutions. We can help with strategy development, product evaluation, and implementation. One of the advantages we can bring to a bank is our experience working with Fortune 1000 retail and consumer products companies to deliver next-generation business strategies and technology solutions that better engage the new connected consumer.
When a bank says “We want to be more like Amazon,” we can provide the industry-leading concepts and innovative solutions that drive business transformation, streamline and enhance operations, and improve customer satisfaction.