Engaging in Financial Services Industries
For years, the bond between a bank and its customers has served as the operational backbone of business processes. Building customer engagement isn’t something that develops overnight. Trust, dialogue and consideration need to be continually built upon to form relationships with customers.
A study by Gallap suggests each engaged customer is likely to bring banks 37% more annual revenue compared to people who are not emotionally attached to their banks. For banks, this result is an enormous increase in their revenues. This makes it more important to start building a customer/organisation relationship right from the beginning of the customer’s journey.
What does engagement look like in the finance sector?
Essentially, people want to speak to people they trust – especially when their personal or business finances are at stake. In 2016, Forbes partnered with SourceMedia and American Banker to uncover how the financial industry’s most-respected decision-makers are rethinking customer engagement. The survey found:
- 91% of banking leaders surveyed agree technology is a disruptor. Technology is majorly changing the way organisations engage with customers.
- 86% said mobile, digital payments and online/web transactions are technology investment priorities.
- 76% of bank lenders reported digital and mobile engagement represent the highest-priority channels for growing small and medium-sized business engagement over the next 24 months.
What are the benefits of engaged customers in the finance industry?
Jim Marous from the financial brand released an article about the “Nine Secrets to Building Customer Engagement in Banking.” I’ve condensed his list to come up with what I think are the three most important benefits.
- Increased revenue and product penetration. Each engaged customer brings an additional $402 in annual revenue.
- Greater purchase intent and consideration. Engaged clients tend to hold more accounts at their primary bank (rather than be with multiple banks).
- Becoming a financial partner. Committed customers build a bond with their bank, credit union or financial institution. 54% of engaged customers agree their bank helps their financial dreams come true. Similarly, 71% of engaged customers use their current bank for the rest of their life.
Three ways to engage with customers in the financial industry
1. Manage relationships with regulators
Financial industries need to show they are able to understand regulators needs and the messages they want to communicate. To be trustworthy, you need to have the right mechanisms in place to secure information. This will benefit from the help of a data management system. Storing events, conversations, potential issues and tasks and then having a system to report based on those needs will always be helpful.
2. Increasing trust
A study by MORI found only 35% of those surveyed believe their online bank provides effective customer service. Today, more people are entering the new era of online banking. To improve this, banks need to provide the right resources and support to build stakeholder and customer trust.
3. Focus on Building a Relationship with Customers and Stakeholders
You need to create engaged customers to be able to generate long-term relationships and profitability. Building an engaged customer all begins with the initial account opening process. This is where your customer will have the most questions and believes you’re generally interested in getting to know them and willing to look out for their best interests.
You have the opportunity to build a positive relationship with stakeholders
Building trust and accountability are always important. Whether it’s another business, an individual client, even a community member, the key is to show members they can trust you.
Have any questions about data management in the financial sector? Leave us a comment or contact us now for more information.
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