A Forbes study discovered that approximately 66% of customers feel disengaged. 73% of users interact with multiple financial institutions beyond their primary one, increasing the level of competition. The variety of digital opportunities has brought many benefits for bank account owners, but has also made communication with banks more transactional than personal, resulting in a loss of connection.
The lack of engagement can lead to customer churn, and customers may start seeking a more appealing solution for financial control. No wonder banks struggle to change it with better engagement and stronger bonds with their customers.
Is customer engagement in banking a problem for your organization? No worries, this article will help you discover how to build a high-impact strategy. We will discuss the challenges of retail banking and share expert insight into the engagement topic. Through real-world examples and our recommendations on key metrics, you can develop a plan to deepen your connection with customers and improve the quality of interactions.
According to the Financial Brand, 66% of banks are sure that they understand their customers, but did you know that 41% of them have never actually tested their engagement strategies? Here are a few reasons that make engagement so challenging for the retail banking segment.
The growing demand motivates modern retail banks to undergo digital transformation and adopt new technologies to stay competitive. Reliability as a financial organization is just a start; customers also expect enhanced experiences and streamlined operations. The traditional approach to the banking system is no longer effective, as users have become accustomed to the convenience of digital banking and the ability to manage their finances through mobile apps and online platforms.
Basic banking services are the bare minimum, which is not enough to keep customers loyal to your company. To win customers' hearts, retail banks must demonstrate a high level of personalization and offer services tailored to individual preferences and financial needs. Banks often employ advanced data analytics and provide targeted financial advice to address this challenge.
As the rules and standards governing information safety and banking operations become more complex, banks must provide timely adjustments to their technologies and operational workflows. Only banks that stay compliant can fully mitigate potential risks and maintain their reputation as trustworthy partners, thereby keeping the funds secure.
Based on our experience as an outsourcing customer service provider, several key principles can significantly enhance your engagement strategy. Let’s review them shortly to show you the direction of improvement.
Personalization in loyalty programs and recommendations can enhance banking customer engagement by showing users exactly what they require most. The same applies to communication with customers via contact channels. This way, you can transition from a transactional communication style to a more meaningful connection and stronger relational bonds.
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Banks can enhance customer engagement by incorporating lifestyle-related elements into their services. For instance, they can integrate gamified challenges or coaching offers. Some customers may appreciate the opportunity to track their financial goals or receive tailored health-related insights. Educational databases will help new users adapt to the banking solution more easily and with less effort.
Customers expect to have access to customer services via preferred communication channels. For instance, some users prefer to contact banks via phone calls, while others consider live chats and emails more convenient. However, keep in mind that for high satisfaction, all touchpoints must provide the same level of service quality.
You can make the customer journey smoother by adjusting seamless interactions to switch from digital to human. For example, you can simplify and speed up the process by enabling automated responses in an AI chatbot for customer service, while leaving a keyword trigger that will switch the interaction directly to a human agent when needed.
Predictive analytics can significantly help with tailoring customer engagement activities in banking by anticipating their needs and interests in future products or services. With predictive analytics, banks can identify common patterns and trends among their customers and detect the risk of churn before it actually happens.
If you provide all the necessary information in plain language, without using complex financial terms, customers will feel more confident and informed. Such an approach to information delivery makes the decision-making process easier for customers and enables them to become familiar with everything your company has to offer. Simple content that users can understand without extra effort and timely updates will keep them engaged and informed about everything they need to know.
At Simply Contact, we believe that engagement makes customers more involved in banking activities and motivates them to stay loyal to a financial company where they spend more time. It is an opportunity to demonstrate that the bank views them not only as a number in the system, but also as valuable customers whose lifestyle, habits, and interests matter. A positive impression of interactions within banking solutions can encourage existing users to recommend your bank to their friends and acquaintances, and passively attract more potential customers.
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Let’s take a closer look at the real-world examples where banks have succeeded in effective customer engagement.
Deutsche Bank Belgium employs a tailored email marketing strategy to foster stronger customer relationships and boost loyalty. They segmented customers based on their investment habits, locations, and risk potential to create targeted campaigns with specialized offers. It enabled a higher rate of open emails and more frequent clicking on their offers.
Banco Comafi is a private commercial bank in Argentina that has chosen to enhance customer engagement through direct communication channels. They focused on proactive messaging through push notifications, the WhatsApp messenger, and SMS. As a result, customers become more familiar with digital channels and receive personalized offers tailored to their financial needs. With timely fraud alerts and updates on transactions, users gain complete control over their financial situation and security.
FirstBank chose to enhance the customer experience by providing them with all the information they may need to know. Their approach to customer engagement in digital banking included notifications and warnings about account balances, purchases, suspicious activities, and many other updates. FirstBank made messaging services the foundation for convenient and informative account management, thereby increasing customer activity.
Key performance indicators often help evaluate the success of a new strategy; the same applies to the level of customer engagement in the banking industry.
Here are the metrics that will help you control the process of engagement improvement:
The belief that customer engagement is optional is the fastest way to lose the competition. It is no longer an option; it is one of the most valuable competitive advantages. The more customers interact with your banking solutions, the higher the chances they will be more loyal to the company and trust your bank with their finances. Personalization, tailored interactions, and timely security alerts help customers become more familiar with your workflows, fostering a stronger reputation as a reliable financial institution.
At Simply Contact, we specialize in creating personalized customer support solutions that drive business growth and customer satisfaction. Let us help you elevate your customer experience and stand out from the competition.
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