Written by Paul Morris, Chief Sales Officer at CPQi.
They say every time someone unsubscribes from a newsletter, a marketer somewhere cries. Attracting and onboarding clients is only a fraction of the equation when it comes to finding digital success in the financial industry. Once you have hooked those clients in, what matters most becomes your ability to retain those clients and keep their customer satisfaction levels high, ensuring no one unsubscribes from your newsletters!
Retaining banking clients digitally requires your banking team to have both the skills to connect with clients on a personal level and the resources to provide clients with advanced – but still approachable – technology and applications.
It will always be important to seek out new clients, but it is arguably more crucial to have a solid game plan in place to grow loyalty and improve the satisfaction of existing clients. In this article, we will discuss what customer retention in the financial industry looks like as the digital era continues to evolve and spread.
The Customer-Centric Approach
In traditional banking and financial settings, financial professionals have kept a degree of separation from their customers. As the world becomes more digitally oriented, however, this separation is no longer beneficial to financial institutions as a whole.
Embracing a customer-centric approach has become a fundamental cornerstone for digital success. Digitization may at first seem as though it furthers the distance between you and your customers, but the reality is that FinTech and its evolving solutions open clearer channels of communication and connect banking teams with their clients with greater intimacy than ever before.
According to a 2020 article published in Forbes:
“A user-centered inner culture puts the focus on the customer at every level of the company, starting from business processes to team members, their duties, the ways these efforts are measured and, finally, the value that the FI [financial institution] delivers to its customers.”
It has become critically important for financial institutions to examine how their business models need to be altered to focus more directly on the clients.
Understanding Changing Client Expectations
While a portion of clients still prefer traditional and relatively tech-free banking solutions, the majority of your customer base is likely to have embraced digital services in most other areas of their life. As the era of digital natives only continues to grow, it is key to take a look at how your client’s expectations have changed.
Though many financial institutions have already begun to recognize the ongoing shift in customer expectations, it is important to closely examine exactly what changes and updates to financial processes and banking your clients are now looking for. These changing expectations include:
- Greater Speed of Delivery: Customer impatience is at an all-time high, meaning the speed at which your financial institution can develop, deliver, and update software or applications needs to be as optimal as possible.
- Simplicity and Approachability: Having clients who are digital natives and highly digitally literate means they likely expect simple and approachable platforms and digital services. Having overly complex designs or processes can turn these clients away in the long run.
- Frictionless Service: Clients these days expect consistency from digital service providers, including those within financial institutions.
- Personalized Solutions: Gone are the days when banks could issue one-size-fits-all solutions – to retain your clients nowadays, you must offer personalized solutions that are customizable to each client’s needs.
Increasing Digital Interactions with Clients
Although digitization allows for hands-off automation of financial services, this does not mean it is the time to become hands-off with your customers.
The rise of digital services has made it easier than ever to stay in close contact with your clients – and due to the Covid-19 pandemic that pushed everyone into digitally dominated and remote spaces, clients have come to expect a greater amount of digital interactions and capabilities.
Personalized interactions especially are at the height of importance and popularity. Your clients want to know how your services can help them to achieve their financial goals with greater ease and simplicity. These interactions ultimately aid in keeping your clients engaged with your financial institution.
Channel Uniformity and Omnichannel Development
Omnichannel development involves enabling every channel of communication to provide the same services as one another. This means that your client can achieve their current action or goal regardless of whether they are carrying out the activity via a digital application, call center, or in-person.
The key to omnichannel development is to ensure that a client receives the same level of service and quality of results no matter which channel they choose to use. This gives the client a greater level of personal choice when it comes to how they carry out their financial activities.
Leveraging Technology to Reach Client Goals
To meet changing client expectations, your financial institution needs to do more than just migrate to a digital platform and provide consistent services across all channels.
Innovative and evolving technologies are the heart of digital transformation – and your clients know this. Moving forward, retaining clients will be achieved not only through strong communication and close contact but also by demonstrating how your institution is adding more value for the client by embracing and leveraging technology.
Using AI to Secure Customer Loyalty
There is no better example of how financial institutions can leverage technology than examining the many uses of artificial intelligence (AI).
AI has come to dominate the financial industry thanks to its tremendous capability for predicting trends and creating optimized risk assessment models. However, AI also has a major role to play in the retention and satisfaction of clients.
Here are just a few of the key uses of AI to help build client loyalty:
- Predictive AI: One of the greatest capabilities of AI is its ability to predict future trends and outcomes. This allows your financial institution to better prepare for major changes and to provide your clients with heightened protection against fraud and other financial crimes. This level of protection is highly valuable to clients, and demonstrating the use of predictive AI to clients can greatly boost their sense of loyalty.
- Personalized Recommendations: AI can be employed to assess your clients and their specific needs. This allows the technology to then compose and present personalized recommendations for the client based on their previous activity on your platform or other channels. Personalized recommendations can include everything from suggesting a service that the client may need to promoting new products or applications.
- Automated Messaging and Chatbots: As your financial institution continues to grow and scale upwards, it can become difficult to always have the best support staff on hand to directly address customer issues. AI offers a solution to this by providing human-like and responsive interactions to clients through messenger or chatbot features. This allows for clients to receive immediate responses and help, increasing their satisfaction with your institution’s efficiency.
- Tracking Customer Behavior: AI is majorly useful for tracking and analyzing the behavior of your customers. This is crucially important, as it provides insights into what areas of your digital business model are functioning correctly versus which aspects may be coming up as less than satisfactory for your clients. Keeping track of client behavior thus allows you to stay ahead of the curve and solve customer complaints and issues before they even appear.
The Role of DevOps and Continuous Development
As we have covered, the speed of delivery with which your financial institution delivers software and applications has gained far greater importance than before. Your clients expect your digital software and applications to run smoothly and efficiently at all times.
The solution to this need for speed is DevOps – a collection of practices and philosophies that unifies all departments within a business, but especially the departments of software development (Dev) and IT operations (Ops). By adopting a DevOps strategy, your financial institution can achieve a highly optimized system that is capable of continuously developing and delivering your products.
DevOps helps to create secure workflows and open channels of communication across your entire institution to better enable fast development lifecycles. This is an essential component when working to increase your customer retention rate.
Enabling Cross Functionality in Financial Institutions
A primary benefit of adopting DevOps into your financial business model is that it enables cross-functionality between each of your departments.
Traditionally, departments within a financial institution have been siloed and separated. This kind of business model does not lend itself towards speed or innovation – two key factors in maintaining customer satisfaction. With DevOps, barriers to communication and collaboration between departments are removed.
It is of the utmost importance for financial institutions to recognize that technology and digitization are the building blocks for establishing a highly loyal and well-satisfied clientele.
As the world of banking becomes more and more digital, clients have been able to switch between financial service providers with greater ease than ever before. This means that attention to a customer-centric approach is essential for retaining your clients and preventing them from seeking out your competitors – and make no mistake, your competitors are likely looking into new technologies for attracting and onboarding more digital clients of their own.
By leveraging innovative technologies, such as AI, and using DevOps and omnichannel development to enable cross-functionality, your financial institution can greatly boost your client’s satisfaction by improving the institution’s ability to deliver personalized solutions at lightning speed.
Efficiency is no longer enough to maintain good standing with customers – financial institutions must now begin to hone in on their clients to discover what truly earns their loyalty in this digital age. The key to doing so is to embrace technology with enthusiasm and by keeping your client’s interests as a top priority.
To learn more about how AI, DevOps, Omnichannel Banking, or other elements of digital transformation can begin boosting your customer retention rates, contact CPQi today!