Until recently, customer loyalty in banking was all but accepted as inevitable. When brick and mortar locations were the primary way of doing business, and financial information was difficult to share, banks could rest easy knowing their customers were probably going to be banking with them for life.
Times have changed, however, and now it’s not quite so easy to ensure your customers remain loyal. With open banking becoming a ubiquitous trend, it’s much easier to transfer between institutions, usually for a more lucrative interest rate offer.
Here’s the thing — within this space there’s an enormous opportunity for banks to change the way they’ve traditionally done business and appeal to new, dynamic customer expectations. And when this is accomplished, your bank will have the opportunity to establish deep loyalty and a long-term, mutually beneficial relationship.
Here’s how you can accomplish customer loyalty in banking:
Keep Your Bank ‘Top of Wallet’
The simplest way to ensure your customers remain banking with your institution is by keeping you “top of wallet.” In essence, this means that while people may have a variety of accounts, their account with your bank is the one they use day in and day out. When they reach into their wallet to use a card, invariably yours is the first they go for.
Of course this is easier said than done. Every bank out there is competing for the prime accounts of their customers, as they tend to be the most consistently lucrative. Which means you need to be prepared to act quickly and ensure your customers have incentives to continue using their account and drive new customers considering switching institutions to switch to yours.
The best way to stay top of wallet is encouraging direct deposit of paychecks. If your money is coming directly into your account, it almost goes without saying that’s the account you consider primary. Offering and managing incentives to encourage this behavior is essential, and can be empowered by using FinTech solutions (like Zafin, for instance) to keep IT costs down and incentives desirable. Using analytics to show customers at risk of leaving is another tactic, so you can offer personalized offers or wave certain fees to maintain their primacy.
Focus on Customer-centricity
This may seem self-explanatory, but it’s important enough that I’m going to stress it. If your only concern is profitability, the jokes on you — you’re probably going to be less profitable. Appealing directly to customers, especially those with increasingly high expectations, is going to be essential to the success of your bank.
The big tech companies and challenger banks are reshaping the expectations of millennial customers, who are increasingly making up a majority of the work force, and thus deposited paychecks — the key to prime bank accounts. If you’re going to appeal to this class of customer, you’re going to need to prepare to offer compelling promotions, flexible fees, and personalized product bundles.
Essentially, you’re going to need to seriously consider the needs of your customers, respond to changes in their desires, and offer more lucrative promotions than ever before to maintain interest. With that said, you don’t want to throw the baby out with the bathwater — profitability is of course a concern. With a focus on the customer, it’s a “build it and they will come” scenario. By appealing to their desires, you’ll increase customer loyalty in banking, deepen relationships and increase profitability over time.
The more products your customers use at your bank, the more likely they’ll remain loyal to your institution, right? Very few people are going to have multiple checking, savings and lines of credit spread across several institutions. For convenience’s sake they’ll consolidate them if they can. They might keep a cheeky savings account at a challenger bank with a great rate, but ultimately most people want easy access to all their banking products in one place.
This provides an opportunity for the savvy who want to instill customer loyalty in banking. Don’t simply offer one product, offer a bundle of products with benefits for customers who are willing to take multiple products simultaneously, and contingent on profitable behavior customers should display when using each one.
And once again, pulling this off is easy with the right solution. With lower costs and more efficient delivery, plus the right system to track eligibility, you can ensure your customers are consistent, content and — of course — loyal.
Maintaining Customer Loyalty in Banking
Consider your customers. If they’re happy, they’ll want to bank with you. If you’re top of wallet, they’ll grow comfortable staying with you. And if they have multiple products interlinked, it will be difficult to leave you. When all those pieces combine, you’re set to have loyal customers.
As to the how, our solution is custom designed to help achieve this. Don’t wait — get in touch with Zafin today and find out how.
Zafin (@zafin) is a leading financial technology provider that enables banks to form richer, more personalized client relationships. Built from the ground up for financial services, its platform empowers banks to enhance revenue and operational efficiency. Founded in 2002, Zafin sits among North America’s top FinTech companies, and is trusted by retail and corporate units at some of the largest banks worldwide. Headquartered in Toronto with global offices, Zafin has a proven track record with a 100 percent client retention rate as validation.
Cam is the Digital Communications and Marketing Coordinator at Zafin. With a background in journalism and a passion for blogging, Cam strives to tell compelling digital stories. At Zafin he will share the latest trends and news in the FinTech world, and share the Zafin role as leader in the industry. Follow him on Twitter @CamSmoth