What consumers value most
The pandemic has led to an unprecedented acceleration in digital usage, leading to increased e-commerce and less reliance on branches and cash. It has also resulted in many behavioral changes, many of which should last. For banks to successfully grow and compete in the future, they must strategically determine how to adapt their business models to these shifting preferences and changing behaviors.
A detailed survey conducted by Strategic Resource Management has collected a snapshot of consumer attitudes more than a year after COVID-19, with the results providing insight into the possible permanence of consumer mindsets.
Regardless of timing, this 2021 study was not a pandemic study. The methodology aligns with research cycles dating back to 2012, and the resulting insights will continue to apply well beyond any temporary market disruptions. Several key findings are expected to impact banking behavior for years to come.
Excellent service is most important
Customer service trumps everything when it comes to attracting and retaining consumers. When asked what was the main reason they chose and chose a particular financial institution, respondents gave more votes to excellent service than to product quality, ease of use and personal recommendations.
Location, value for money, and loyalty programs also factor heavily into the decision to stay with a provider.
Channel preferences hold surprises
Surprising responses were also garnered when respondents were asked about their first and second channel preferences. Websites narrowly surpass mobile apps as the top choice for interaction.
However, phone and agency still rank third and fourth, remaining the preferred channels for nearly a quarter of respondents. That web chat, video calls, and virtual assistants are easily outclassed, and despite the stereotypes, these preferences don’t change much when viewed across age brackets.
Another surprising finding is that email and phone have both overtaken apps as a fallback communication preference – web/video chat and virtual assistants have risen dramatically from their once muted popularity among the top options. . A logical interpretation would be that while channels like mobile apps are popular for routine queries and interactions, consumers prefer more personalized – and mostly live – support for more complex queries.
Although a common belief is that in-branch traffic will continue to decline, our research shows that it will remain important to customers. The data implies that the branch network can be at the heart of an implicit brand promise and that the closure of nearby locations is perceived as a loss of access, even if they are not visited regularly.
If branch offices function as a security blanket for rare but urgent situations, executives must determine the optimal balance between this value and the cost of operating a wide area network. Overall, the research proves the need for agile customer experience management that uses data to enable responsive service.
Environmental issues matter
The research further probed the factors influencing consumer loyalty to isolate opportunities for banks and credit unions to shift the meter on this essential attribute for a long-term relationship.
Two of the key factors are intuitive: a gradual improvement in the Net Promoter Score for “cares about your individual needs?” offers the best return on loyalty, and the NPS for “easy to do business with” is also highly rated.
The NPS for the perception of “a company’s commitment to climate change” ranked second after “cares about individual needs”. As with other measures, a commitment to climate change seems to resonate most strongly with members of credit unions and customers of community banks. Customers of large national banking brands (and neo-banks) tend to place less importance on this factor and, not coincidentally, these brands receive lower climate commitment ratings.
By having an in-depth understanding of what the key drivers of consumer loyalty and trust are, banks can modify their strategies accordingly. In addition to knowing why customers choose and stay with an institution, banks need to keep a close eye on changes in behavior so they can pivot as needed, demonstrating their competence and dedication to doing what it takes to maintain customers’ business.
And big banks can also learn more from smaller financial institutions when considering policies and products that resonate with a broader consumer base. These practices can ensure greater engagement — and greater success — in the future.
John Sherjan is Director of Knowledge at Strategic Resource Management.