Image by Thomas Breher
According to Statista, the global market capitalization of banking stood at 7.3 trillion euros in 2022’s second quarter.
As such as massive industry, banking is highly competitive, and attracting and retaining clients is not just difficult, but expensive. This applies especially to the former: acquiring new clients costs several times more than retaining existing ones.
While both tactics are necessary for any successful bank, customer retention is both simpler and more profitable. In this article, we’ll cover some efficient strategies for customer retention for the banking sector.
Table of Contents
Introduction to Strategies for Customer Retention
Client retention strategies have changed much in the last few years, taking a deep dive into available technological advancements.
At one time, in-person meetings reigned supreme as the best way to engage with clients – whether acquiring them or retaining them. However, today, people don’t usually want to take the trouble of coming to banks in person. Banks have understood that customer loyalty and retention now depend heavily on mobile apps, web apps, and websites.
Note that banking has not become more competitive just because of the establishment and growth of other banks. Banks are also competing with other financial institutions and non-banks. This is because services such as refinancing, taking out loans, and opening investment accounts are now also offered by various online institutions, not just by banks.
Often, obtaining loans from these online institutions is easier than obtaining loans from a bank, so this stands as a point of convenience for clients.
All this raises the question: how can your bank out-compete not just other banks, but the non-banks that are providing financial and lending services?
Top Client Retention Strategies for Banks
1. Build a Positive Corporate Image or Brand
It is absolutely crucial that banks have comprehensive insight into their clients’ needs, values and attitudes. They also need to understand how their clients perceive the bank and its services.
Branding, of course, can be a key differentiator. This refers to your business philosophy, mission, vision, and so on. To sum up, it refers to your bank’s unique identity. How are you different from your competitors, and why should your clients care?
Furthermore, building a positive image isn’t just about branding. It’s also about service, and how comfortable and protected you make your clients feel.
For example, your clients want to know that their data is secure and that funds are not being mismanaged. A way to address both these concerns is daily reconciliation through automation software such as CrushErrors.
2. User-Friendly Mobile Banking
According to GSMA Intelligence, there were about 5.22 billion unique mobile users in 2021. That number is staggering, but even in 2018, almost 40% of all purchases for Black Friday were made using mobile devices.
Ignoring the mammoth shift to mobile usage could lead to a loss of profits. Consider that, in the US alone, according to Statista, 57% of people use mobile banking apps to make transfers.
It may seem expensive to get a mobile app developed and maintained, but the advantages will far outweigh the drawbacks if you do it right. Giving your customers an intuitive, user-friendly mobile banking app can lower costs, increase ROI, and improve customer loyalty through satisfaction.
While every bank operates differently, you should consider making mobile banking a part of your overall customer retention plan.
3. Send Satisfaction Surveys
Through all touchpoints, whether mobile apps, websites, or branch visits, banks should always strive to improve their customer experience.
A way to measure how well you are doing on this front is customer satisfaction surveys. Through these, you can learn what’s making your customers happy and what’s making them want to move to a different bank.
Here are some advantages of a customer satisfaction survey:
Learn how your clients feel about the experience you provide
Identify clients who are willing and likely to recommend your bank to others. They can serve as your brand advocates
Swiftly identify and resolve problems and loopholes
Improve your services through insights and data
4. Offer Loyalty/VIP Programs
Everyone wants to feel appreciated. Especially customers who have been with a business for a long time.
One of the best strategies for customer retention is offering loyalty or VIP programs that help your clients feel valued and acknowledged. For example, you can use a points system, wherein points can be redeemed for various rewards and perks.
Even as you attract new customers, you must not forget to reward and incentivize your old ones.
Attracting and retaining clients will remain a difficult task for all businesses. However, with the steps above, it will become easier and more manageable.
Staff at banks are often overworked, particularly the accounts department. To help ease the load, we recommend daily reconciliation. NextGen Accounting offers bank reconciliation services, credit card reconciliation services, and consulting services.
To give you the most accurate and fastest reconciliation, we use our patented software CrushErrors, which we specifically created for huge amounts of data that other reconciliation software cannot easily manage. You can also obtain CrushErrors as a product if you’d rather conduct reconciliations in-house.
NextGen Accounting’s management team has decades of experience and includes former executives of Barclays Bank, Bank of America, and ICBC. Contact us today for reconciliation services or book a free demo if you’d like to get CrushErrors!