If you read nothing else in this article, take this to heart: The banks that will win are the ones that add value.
The branch used to be the only channel in which banks could interact with their customers. That created a very personalized banking relationship that fostered trust and recommendations that catered to personal circumstances. But now, that’s all thrown off and banking is quite frankly in a rut.
Banking has become purely transactional: Your customers only come to you when they need something. Whether they’re transferring money between accounts or checking a balance, they’re gone once they finish their task.
This isn’t effective over time. You have to give your customers more reasons to keep coming back. Having a relationship with your bank makes you think of them first when you’re making one of the biggest financial decisions of your life, such as getting a mortgage. But if all banks are the same in a customer’s eyes (i.e. you’ve done nothing to differentiate yourself), then they’re going to research, find the lowest rate, and probably go with that one that offers the best rate. You don’t want to get undercut based on price when you offer superior service.
The banks of today are too focused on whether their products are selling, instead of the holistic experience of their customers. The good news is that you have your customer’s attention. It’s time to start engaging them at all touch points in the omnichannel banking reality, instead of letting that attention go to waste.
As someone who worked in banking for decades, I know that there is going to be significant pushback on this. This is going to cost money, and banks are much more interested in making money.
But face it, if you’re not providing top tier service and added features, your customers will easily jump ship to the next best thing. And there are lots of banks out there with bells and whistles trying to lure them away from you. The problem here is that getting them back would be harder than it was to acquire them in the first place.
Now, I’m not suggesting that you offer a new service every time a customer logs in. But overall, you can get them to interact with you more. Banks, including HSBC, are leading the pack in becoming partners with their customers.
At the beginning of 2016, HSBC began their Nudge pilot in which they used account data to provide spending trends and digital alerts to tell customers when they’re spending more than usual. The goal of this pilot was to raise awareness of spending and encourage customers to make small financial decisions to improve spending habits over time. HSBC stepped up to the plate because they already had the data. Connecting the dots and presenting their findings to their customers was another way of showing that they’re much more than a bank — they’re a long term partner.
This concept is what is commonly referred as the “Bank of One.” By becoming more customer-focused and staying away from untargeted sales pitches, banks are giving customers an individual banking experience that meets their specific needs. Meeting them on every channel they like to bank on and providing what they need now and down the road will cement a bank’s success.