Jun 10, 2013 Sean Albert
Everyone needs a method for managing their finances. Whether this means having a relationship with a traditional bank or using alternative financial services, every individual has a way of ensuring his or her money is safe. But one thing that is becoming increasingly apparent is that just because people need help to guarantee their financial situations remain positive doesn't mean they aren't picky about what kind of treatment and options they want. Today's customers want great customer service, and they'll embrace it wherever it's found.
What's the disconnect?
According to the 2013 World Retail Banking Report by Capgemini and Efma, many traditional financial institutions may not be doing enough to get ahead of their competition. One important factor in gaining customers is making people feel valued, and while the Customer Experience Index did improve from 2012 by 1.4 percent, many patrons are still not convinced that they want to stay with their bank. Among the more than 18,000 consumers surveyed, 10 percent responded that they plan to switch banks within the next six months, while nearly half - 40 percent - said they are unsure whether they will be using the same financial services provider in that same time period.
The research emphasized that customer satisfaction hinges on the quality of the entire banking experience, and it is especially dependent on positive experiences. When consumers have great interactions with these organizations, it builds up their levels of trust and also enhances their perception that the bank is understanding of their needs. Capgemini and Efma added, however, that satisfaction can be a deceptive indicator - some banks that rely purely on this factor to determine the likelihood that a customer will stay may be surprised to find that the holistic experience is more important.
"One of the biggest problems facing retail banks today is their inability to stand out in an increasingly commoditized and competitive marketplace," the report noted. "Few banks are forging innovation in developing new products. Nor are they connecting with customers in a personalized way as the role of the branch continues to diminish."
Innovation is the answer
The study emphasized that one of the ways in which financial services providers can differentiate themselves from competitors and retain customers is by releasing mobile apps. Especially when it comes to younger consumers, these tools are necessary to staying relevant as a banking option. However, one emerging challenge may be developing technologies that meet the needs of these discerning and experienced customers. While 78 percent of patrons 65 or older said they had positive experiences with their bank's solutions that were delivered via the internet, only 56 percent of those between 18 and 24 felt the same.
This battle to develop the best mobile app is likely to be an important one for banks. The report pointed out that by 2017, most regions worldwide will see fewer customers visiting branches and ATMs. In North America, the rate of branch usage is forecast to decrease by 3.5 percent.
While the perception of many business leaders has been that people are fearful of mobile options, this anxiety over consumer credit report-damaging identity theft may be dissipating. According to American Banker, a recent survey of 1,000 consumers from Mojiva found that 75 percent of respondents are as comfortable accessing their financial data from their smartphones and tablets as they are from their home computers. Nearly as many - 72 percent - use a mobile banking app or website on a weekly basis.
This newfound emphasis on customer experience may be good news for providers of alternative financial services. No longer are people tied to the idea of just a traditional bank - they want the best experience they can get. By striving to think outside the box and develop the most innovative money management options, less mainstream companies may be able to earn significant loyalty among the most discerning of customers.