I love secondary research. I employ the strategy of ‘if it exists, I can find it online’. I am always searching for new content for our clients online in the banking and finance, higher education, and in healthcare. One of the latest secondary research reports I came across in banking and finance was the Winning Through Customer Experience Report written by Ernst & Young. It is a global consumer banking survey conducted each year in which results are released and summarized.
Here are my 5 key takeaways from this study:
- Good customer experiences is vital to growth – Although overall financial stability is the number one reason people trust their financial institution (FI), “the way I am treated” was a close second. Other important elements of the customer experience (CX) and building trust included communications, quality of advice, and complaint handling. Quality of advice is a factor that RMS has been tracking over the years with our clients. More and more customers and members are expecting their financial institution to anticipate financial needs and recommend new products for them, working as almost a financial adviser to them.
- Problems happen, financial institutions need to focus on the resolution experience – the report indicates that customers are expecting their financial institution to act as problem solvers to issues. It’s not the problem that matters but rather how the problem is handled. Our research at RMS has shown to confirm that problem resolution has the most significant impact on overall satisfaction with a financial institution. As the report indicates there is astounding upside if customers are satisfied with problem resolution and a downward spiral if they are dissatisfied. Banks and credit unions should place additional rigor and monitor these outcomes.
- A struggle for differentiation – Although 60% of respondents do not have plans to open or close any accounts with their financial institution in the next 12 months, the report explains this cannot be interpreted as loyalty. Nearly one-quarter (22%) indicated that all financial institutions are the same and 17% stated it was too difficult or time-consuming to change. The time-consuming switch of FIs follows suit with research conducted by RMS in the past. Many view the process of switching FIs as too challenging which typically results in low customer churn among institutions. Many clients have employed “switch agents” or “switch liaisons” to help customers with this process of switching bills, automatic payments, accounts, etc. to reduce the time needed to make a change.
- Convenience and trust trump all other factors when choosing a bank or credit union – The blue (convenience) and yellow (trust) diamonds perform high on both importance to a customer and satisfaction with that factor from their financial institution. ‘Keeping financial information safe’ and ‘protecting financial information’ are must haves which is why many FIs have adopted HIPAA-like policies. Looking for factors to help differentiate your bank or credit union from the competition? Choose the factors with high importance and low aggregate satisfaction (e.g., ‘is transparent about what they charge for and makes it clear to you how to avoid paying fees’ and ‘communicates important information clearly’.) If you can perform well on these two factors you will be ahead of the majority of your competitors.
- Segmentation is the key to understanding your customers and responding to opportunities – Many clients have undergone efforts to segment their customer base. Segments share common behaviors, expectations, preferences, and therefore solutions. It also assists with future targeted and niche strategies for new customers or members. This report sub-divided 32,000 respondents into 8 global segments: (1) self-sufficients, (2) balancers, (3) safety seekers, (4) new world adopters, (5) unhappy and unmovings, (6) elites, (7) traditionalists, and (8) upwardly mobiles. These segments can be analyzed by preferences and behaviors as well as traditional demographics such as gender, age, education, income, assets, etc.
Research & Marketing Strategies (RMS) is a market research firm that specializes in banking and credit union market research. We are based out of Syracuse, NY but we have clients across the country. If you are interested in talking more about potential market research and surveys with our firm contact our Business Development Director Sandy Baker at SandyB@RMSresults.com or by calling 1-866-567-5422.