Leading a financial institution in the 21st century is a balance between physical and digital, security and creativity, personalized engagement and ease of use.
It’s extremely difficult, but it doesn’t all have to be so difficult. Traditional banking providers can achieve their growth goals without performing big fintech-style stunts, if they keep a few essentials in mind.
Here are six of the best methods and features The financial brand found that banks and credit unions could add to their repertoire to keep customers hooked.
1. Give people immediate and easy access to funds
All over the world, people have become accustomed to the idea that they can get funds from their banking provider any time of the day or night – through an ATM, through their credit card to make online purchases. line at 2 am or to pay a friend for dinner by payment. apps like Venmo and Zelle.
It’s a modern concept: no matter where you are or what time it is, your bank account is accessible and working for you.
Equally important is that banks and credit unions be hyper-aware of consumers’ need to access credit other than by card. Nearly nine in ten consumers (86%) – across all income levels – say they are quite or very likely to want to take out a small loan from their financial institution soon, according to a 2020 survey conducted by Alchemer (formerly SurveyGizmo ).
Notably, nearly three in five people (57%) would start a new relationship with a banking provider if there was a better option for such a small loan than their current bank or credit union. Another 27% of consumers say they would get up and go completely.
( Read more: 4 ways to become the main financial institution for consumers)
2. Offer money management tools
Today more and more people like to keep track of everything in their life. And they can. More and more consumers are staying ahead of their finances with apps that track subscriptions and help them budget and maintain.
While such oversight was extremely onerous before “digital transformation” became a term in the financial industry, consumers can now stay ahead of the game by using mobile apps, according to Scientia Consulting.
Meeting this need no longer has to be a complex project lasting several months for financial institutions. Instead of developing unique money management tools, they can more easily integrate existing products created by third parties, with features such as:
- Track spending and savings
- Budget preparation
- Expense reports
- Subscription management
- Crypto investments
( Read more: Generation Y and Generation Z demand digital investment tools)
3. Improve the security game
Security is an underestimated part of the customer’s banking experience. Yet its importance cannot be underestimated. People trust traditional banks and credit unions more than neobanks and fintechs, but that could change soon.
Sotiris Fousekas, Vice President of Fintech Insights at Scientia, recommends banking providers go beyond passwords and security questions. Instead, biometrics could be the way of the future.
“Imagine losing your phone, wouldn’t you feel more secure for your money if other people were to use your fingerprint or scan your iris to log into your bank account? He writes in a blog.
Setup can take place at the time of onboarding, advises Fousekas, and financial institutions can introduce products, such as live videos or instant selfies to verify security. Then banks and credit unions can expand that by incorporating device pairing networks where users take a selfie or photo of their ID if they try to log in on a new device.
While this is not the only approach, the most important point is that consumers expect security to be foolproof. The next section covers a related point.
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4. Approach alerts the right way
Alerts are a simple way to ensure safety and instill consumer confidence. If people always know what’s going on with their bank account, they are all the more likely to stay with a financial institution.
But, while people appreciate being alerted to potential security threats, unnecessary alerts can weigh on a consumer, even to the point where they begin to look elsewhere for their banking experience.
While there may be an element of “art” in sending alerts to people, there are a few important things to consider when establishing alert programs for consumers:
- Hourly – Taplytics, a push notification and analytics program, recommends that banks and credit unions think carefully about the timing of their notifications. For example, if consumers need to order a new debit or credit card before it expires, financial institutions can send 30-, 45-, and 60-day reminders to make sure people follow through.
- Intention – It is not enough to inform people at every stage of the customer journey. It is imperative that there is a good reason behind every post. Find out what every consumer cares about and values, alerting them when something is happening they or they want to know.
- Variety – Of course, when there is a safety issue, customers want to know. However, they also want to follow their budgets. If they hit a wealth management goal or meet a savings goal, send them a notification encouraging them to check on their progress. Positive notifications mixed with alerts will keep consumers coming back for more.
5. Walk on the “phygital” line
Going from one set of study results to another, a financial institution could easily be thrown off course – do we have to cut our entire branch network? Do people still care about going to a local bank or credit union? What are the implications of going digital?
It’s no surprise that financial institutions feel confused, especially since their customer base is a generational mix. However, there seems to be a hint of congruence: People love digital banking, but they still want this branch, even if they don’t go there frequently.
This led to the creation of the term “phygital” bank.
( Dig deeper: Branches still dominate, but banks won’t need that much to compete)
“Banks are opting for a remote omnichannel communication strategy using digital tools while maintaining the physical relationship in the branches”, explains Lucile Diboune, Junior Marketing Product Manager for the French payment solutions company WorldLine. “The ‘Phygital’ strategy then seems to achieve the right balance. “
While a digital approach opens up various channels of communication for consumers, the physical agency remains the preferred mode of “high value-added exchanges”, explains Diboune, adding that it is much easier to maintain the dialogue between advisor and consumer. Then, digital automation frees up time by performing recurring tasks.
A winning strategy:
Banks and credit unions can follow this “phygital” line by using face-to-face conversations for high-value tasks and online banking for repetitive, low-value tasks.
6. Make CX efficient – and Fun
One area where fintechs and neobanks have a head start over banks and credit unions is their ability to make banking not only easier, but sometimes even fun. Of course, their lack of significant regulatory oversight is an important factor, but not the only one.
One characteristic that people associate with neobanks is how very open they are with their goals and manage to make dealing with money interesting. However, despite the conservative mindset of traditional banking providers, financial institutions can also make the customer experience fun.
Moroku, a software company focused on getting financial institutions to better engage consumers, says it is essential to focus on the human, who likes to progress while having fun.
“As we learn new skills, we instinctively seek out the next challenge, which in turn builds the next level of skill,” reads Moroku’s “Making Banking Fun” report. “This is how games work and it is a very useful template for mapping progress professionally and personally.”
That’s not to say that banks and credit unions always have to integrate games into their existing banking platforms. However, brainstorming techniques to retain and retain consumers of all ages are the key to unlocking loyal customers.