When pursuing convenience in banking, it is easy to focus on technology, such as mobile apps and online platforms that allow customers to manage their finances from anywhere at any time. However, convenience isn’t just about technology — trusting your bank and having reliable customer service are also priorities. Convenience means carrying about your day without concern regarding your account. Is my money safe? Is my balance accurate? Where did this fee come from?
Rivel Banking Research found that the top two important drivers of a customer’s banking experience when choosing a new primary bank are trustworthiness at 92% and good customer service at 86%. This is true on both the retail and commercial sides of the banking world, and it’s interesting to see how the in-person experience continues to evolve.
Trust and Customer Service are Cornerstones
Trust is fundamental in the banking sector, particularly from a consumer’s perspective. A recent survey of nationwide consumers by Rivel revealed that most associate trustworthiness with transparency regarding fees and services, as well as positive customer service experiences. When customers have confidence that their bank will resolve issues promptly and effectively, they’re more inclined to remain loyal. A commitment to trust and reliability allows them to cultivate long-term relationships and distinguish themselves in a competitive landscape.
Banking in general is more convenient when consumers and businesses don’t need to worry about unexpected monthly fees, or services that stop working without notice. This is a simple reminder for banks and credit unions to proactively share their evolution of products and offerings with consumers early, and often.
According to research from Morning Consult, the percentage of US adults who say they trust banks and credit unions sits at 66% and 65%, respectively. The percentage of adults who said they trust digital banks and fintech’s was 43% and 37%, respectively. Industry-wide, banks and credit unions may have a leg up on the digital options, but cultivating that reputation takes work. One advantage for traditional financial institutions is expanding a physical footprint which digital options can’t offer.
To Stay Ahead, Be Proactive
Punitive rates and high fees are often common contributors to a customer’s decision to consider switching banks, but poor customer service is a strong contender for second place, according to Rivel’s latest consumer research. While banks may have limited control over interest rates and fees due to regulations, they can significantly influence the quality of their customer service.
The Real Data:
According to Q3 2024 data from Rivel, 24% of customers might leave their current bank due to customer service issues, just behind fees and poor rates.
In fact, this is a lynchpin of Bank of America’s recent announcement to expand their branch footprint. According to B of A, the expansion is done with “a focus to create offices and meeting spaces for clients to talk with financial specialists, make state-of-the-art technology easier to access at the front of the centers, and ensure clients have a consistent, modern experience inside every center.” It’s clear that one of the largest banks in the country is investing in the idea to meet the customer where they are, even if a majority of the transactions are occurring online.
Banks that excel offer seamless and proactive services, doing their best to anticipate customer needs before they arise. Unfortunately, there’s a fairly noticeable gap in understanding customer needs, according to Rivel’s Q3 2024 research: Only 48% of bank customers believe their institution truly understands them as a consumer. The level of personalization is even more discouraging, with only 37% feeling they receive personal advice most or all the time.
To thrive, banks must anticipate customer needs and deliver smooth, engaging experiences. This includes developing intuitive, user-friendly digital platforms and taking the initiative to reach out to customers proactively, perhaps inviting them to a face-to-face conversation. This outreach could cover notifying customers about potential fraud, providing tips on avoiding fees or suggesting financial products that align with their goals.
Bank of America shared that more than 95% of client interactions are taking place on the bank’s digital platforms, so they have adapted their financial centers to focus on meeting spaces where clients can have in-depth conversations about their finances. In the past year, B of A clients have made nearly 10 million appointments with financial specialists in financial centers with 20% of those appointments to discuss investing.
Personalization Means Anticipation
While the face-to-face experience is second to none, institutions need to remember that a consistent relationship with customers starts with personalizing conversations and recommendations. Much like their competitor Bank of America, Chase is also adding new, focused branches to its footprint, however in two distinct areas—consumer-facing in lower-income areas and rural communities with limited access to traditional banking, while also rebranding First Republic commercial centers to JPMorgan for those vital relationship-building activities.
Within the commercial banking space, not only do small businesses see a successful relationship with an assigned banker at their primary as essential, but they need continuous access to someone who understands their business’ needs. According to Rivel’s recent research, responsiveness and care for business growth are more important to business customers than an industry expert. Moreover, simply being available for customers, and likely in more traditional ways, will cement a strong relationship.
Understanding the best ways to stay in touch with customers enables banks to anticipate issues and opportunities, leading to a more tailored customer experience. For instance, a bank in a region with a growing Hispanic population might offer financial education programs to help families plan and manage higher education costs. That is more likely to be done in a safe space like a branch than a simple email. It’s about recognizing vulnerabilities in the local market and becoming a trusted institution for better financial relationships.
The goal of anticipatory customer service is to minimize complaints, issues, and inquiries by addressing potential problems proactively. This not only enhances the banking experience for customers but also allows staff to focus on more complex and valuable services.
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Convenience is Non-negotiable
In today’s competitive environment, convenience is no longer just nice to have. It’s non-negotiable. By focusing on ease of access and use, trustworthiness, and personalized service, banks and credit unions can meet and exceed customer expectations. Studies over the past few decades have continued to show that customer service has a strong association with retention and word-of-mouth engagement among consumers. People are more likely to casually talk about customer service experiences compared to rates and fees, for example. By adopting an anticipatory approach to customer service, banks and credit unions can build stronger, longer-lasting relationships with their customers, no matter where that connection occurs.