HOW CAN BANKS ENHANCE CUSTOMER ENGAGEMENT?

By Karen Wheeler, Country Manager, Affinion

The banking landscape in the UK is evolving at a rapid pace. Innovations in technology have transformed the way customers engage with their banks, with in-branch visits falling as customers embrace the convenience mobile banking offers. This shift in behaviour means banks need to constantly evolve to keep pace with the needs and expectations of their customers. From the banks that have been a part of our high-street for generations, to the new challengers on the scene, customers are now faced with an unprecedented level of choice about who they manage their finances with.We believe that building engagement with customers and becoming an integral, valuable part of their lives is the key for banks to succeed.

A recent report by the British Banking Association revealed some fascinating insight into the way customers are engaging with their banks. Banking ‘on the go’ is growing at a rapid pace, with the number of log-ins to banking apps rising from 7 million a day in 2014, to 11 million in 2015. In total, customers used banking apps 4 billion times in 2015. In contrast, the number of log-ins to banking websites fell from 4.4 million in 2014, to 4.3 million in 2015.

Anthony Browne, Chief Executive of the BBBA, commented on this trend in the report’s foreword: “This is very much a consumer-led revolution. Customers are harnessing new technologies because it’s fast and convenient, allowing us to manage our money when and where we please.” There is great potential for banks to respond to customers’ needs by personalisingthe mobile experience – and ultimately drive engagement.

We are witnessing both high street and challenger banks striving to do just this. Earlier this year, HSBC trialled its ‘Nudge’ scheme, which sends 38 different types of alert to customers’ smart phones to test levels of engagement. Challenger bank Atom allows customers to tailor-make the look and feel of their app, and also changes colour depending on the customer’s activity – for example ‘pulsing’ to alert the customer that the fixed-rate on a savings account is about to expire. This kind of personalisation offers potential for banks to build engagement with their customers through providing ease and convenience to their lives.

Customers are interacting with their banks more regularly than ever; the BBA report revealed in 2011, customers interacted with their bank on average 2.3 times a month, in 2016 it is 3.5 times and by 2021, CACI estimates it will by 6.3 times.Of course, this increase has been driven by the rise in mobile banking; the number of branch visits almost halved from 2011 to 2016, dropping from 476 million to 278 million.

This increase provides the opportunity for banks to enhance each interaction and become a daily, integral part of the customers’ lives. As customers are becoming increasingly autonomous in the management of their finances, the opportunity for banks lies in adding value through other services that benefit the customers’ lives. We believe this can be achieved by offering products and services that support them in other areas of their lives, for example lifestyle benefits, discounts and protection services.Not only this, the access to these benefits needs to be seamless. For example, we worked with RBS Group to develop a central benefits website to enable RSB, NatWest and Ulster account benefits to be consolidated into one ‘hub’ site, with single sign-on access to all benefits. This kind of ease and transparency is what customers expect and demand of banks in this modern age.

Achieving high customer satisfaction levels is crucial in order to lay the foundations of trust, engagement and loyalty. The UKInstitute of Customer Service (UKICS) report found that 96% of customers rating an organisation nine or ten out of ten for customer satisfaction also gave the highest levels of trust. As banks well know, customer satisfaction levels are in constant fluctuation depending on the quality of their experience.

Indeed, the UKICS report found customer satisfaction is lowest during the first five years of relationship between a customer and their bank, peaks between years 6-20 and then drops for customers who have dealt with an organisation for more than 20 years. The key is for banks to offer a consistent level of service and experience that sets the foundations for a long-standing relationship based on trust and satisfaction.

Challenger banks have disrupted the banking scene with a‘digital first’ approach that appeals to the lucrative millennial market. We believe the high-street banks that invest in innovation and leverage the strength of their heritage will be able to forge deep engagement with their customers. Banks today need to not only respond to customers’ needs but anticipate and inspire their behaviour with innovative and creative solutions that differentiate them from the market. We believe the banks that can provide holistic, personalised, digital and frictionless service-driven customer journeys will succeed.

By Karen Wheeler, Country Manager, Affinion

The banking landscape in the UK is evolving at a rapid pace. Innovations in technology have transformed the way customers engage with their banks, with in-branch visits falling as customers embrace the convenience mobile banking offers. This shift in behaviour means banks need to constantly evolve to keep pace with the needs and expectations of their customers. From the banks that have been a part of our high-street for generations, to the new challengers on the scene, customers are now faced with an unprecedented level of choice about who they manage their finances with.We believe that building engagement with customers and becoming an integral, valuable part of their lives is the key for banks to succeed.

A recent report by the British Banking Association revealed some fascinating insight into the way customers are engaging with their banks. Banking ‘on the go’ is growing at a rapid pace, with the number of log-ins to banking apps rising from 7 million a day in 2014, to 11 million in 2015. In total, customers used banking apps 4 billion times in 2015. In contrast, the number of log-ins to banking websites fell from 4.4 million in 2014, to 4.3 million in 2015.

Anthony Browne, Chief Executive of the BBBA, commented on this trend in the report’s foreword: “This is very much a consumer-led revolution. Customers are harnessing new technologies because it’s fast and convenient, allowing us to manage our money when and where we please.” There is great potential for banks to respond to customers’ needs by personalisingthe mobile experience – and ultimately drive engagement.

We are witnessing both high street and challenger banks striving to do just this. Earlier this year, HSBC trialled its ‘Nudge’ scheme, which sends 38 different types of alert to customers’ smart phones to test levels of engagement. Challenger bank Atom allows customers to tailor-make the look and feel of their app, and also changes colour depending on the customer’s activity – for example ‘pulsing’ to alert the customer that the fixed-rate on a savings account is about to expire. This kind of personalisation offers potential for banks to build engagement with their customers through providing ease and convenience to their lives.

Customers are interacting with their banks more regularly than ever; the BBA report revealed in 2011, customers interacted with their bank on average 2.3 times a month, in 2016 it is 3.5 times and by 2021, CACI estimates it will by 6.3 times.Of course, this increase has been driven by the rise in mobile banking; the number of branch visits almost halved from 2011 to 2016, dropping from 476 million to 278 million.

This increase provides the opportunity for banks to enhance each interaction and become a daily, integral part of the customers’ lives. As customers are becoming increasingly autonomous in the management of their finances, the opportunity for banks lies in adding value through other services that benefit the customers’ lives. We believe this can be achieved by offering products and services that support them in other areas of their lives, for example lifestyle benefits, discounts and protection services.Not only this, the access to these benefits needs to be seamless. For example, we worked with RBS Group to develop a central benefits website to enable RSB, NatWest and Ulster account benefits to be consolidated into one ‘hub’ site, with single sign-on access to all benefits. This kind of ease and transparency is what customers expect and demand of banks in this modern age.

Achieving high customer satisfaction levels is crucial in order to lay the foundations of trust, engagement and loyalty. The UKInstitute of Customer Service (UKICS) report found that 96% of customers rating an organisation nine or ten out of ten for customer satisfaction also gave the highest levels of trust. As banks well know, customer satisfaction levels are in constant fluctuation depending on the quality of their experience.

Indeed, the UKICS report found customer satisfaction is lowest during the first five years of relationship between a customer and their bank, peaks between years 6-20 and then drops for customers who have dealt with an organisation for more than 20 years. The key is for banks to offer a consistent level of service and experience that sets the foundations for a long-standing relationship based on trust and satisfaction.

Challenger banks have disrupted the banking scene with a‘digital first’ approach that appeals to the lucrative millennial market. We believe the high-street banks that invest in innovation and leverage the strength of their heritage will be able to forge deep engagement with their customers. Banks today need to not only respond to customers’ needs but anticipate and inspire their behaviour with innovative and creative solutions that differentiate them from the market. We believe the banks that can provide holistic, personalised, digital and frictionless service-driven customer journeys will succeed.