Poor Service and Security Issues Driving Consumers To Switch Banking Providers
Despite all the recent advances in banking technology and digital channels, people still cite basic customer service and security concerns as their two most important factors — whether they choose to stay with their current financial institution... or find a new one.
If you’re not making your people feel valued and safe — whether online or at a physical branch — you could lose them to a competitor.
Consumers have high standards when it comes to account security and fraud prevention. According to a study by March Networks, nearly one in ten of those surveyed switched banks due to security concerns, and half of consumers say they have abandoned an ATM transaction because someone was hovering nearby. One in five U.S. consumers also say they have changed banks due to a negative customer service experience.
According to the survey, three in five consumers spotted a fraudulent transaction on their account before their bank. With the prevalence of account fraud in the Digital Age, today’s consumer expects their institution to notify them, not the other way around. People expect real-time notifications when fraud is suspected, and once recognized, they expect to have the situation resolved promptly. Fall short in any way, and they will be primed to switch.
And while digital banking channels are top of mind for most financial service providers, the study shows that physical branches are still important to consumers — including Millennials. Of those surveyed, 66% of Millennials and 73% of all other age groups say they regularly bank at physical locations and ATMs.
The survey concluded that customer service shortcomings were the main reason consumers switched banking providers, other reasons for switching included their nearest branch closing (14%), fraudulent account activity (9%) and safety concerns (9%).
Consumers also say they want more in-branch services and shorter wait times. (Doesn’t that sound like Henry Ford’s old adage: "If I had asked people what they wanted, they would have told me they wanted a faster horse.") Nearly half of those surveyed said that waiting more than five minutes in a branch is unreasonable.
When looking at the appearance of the branch itself, consumers take note of the overall presentation of branch lobbies and common areas. In fact, three quarters of those surveyed said they would consider switching banks if they were unhappy with the appearance. That number jumps to 88% among those consumers with children.
Read More: Security Issues Shaping Consumers’ Payment Behavior
"Banks and credit unions recognize that today’s consumers want a mix of in-person and online banking service options," said Peter Strom, President and CEO of March Networks. "They have very high expectations when it comes to security and customer service."
Strom says people expect a reliable standard of service, and want to feel that they and their accounts are safe — whether they are visiting a branch, using ATM or conducting transactions digitally online. Without the basic fundamentals in place — something that could be lost or forgotten in the digital arms race — financial institutions run the risk of losing customers.
"Most financial institutions are meeting these expectations at present," Strom said. "However, they will need to get even more strategic to retain customers and attract new business in their extremely competitive environment."
