Unlocking loyalty: Winning retention strategies for finance

The past failures of two US banks has exposed vulnerabilities in the global banking system and contributed in turn, to significant volatility in the financial sector. With inflation rates higher than they’ve been in the last decade and cost of living pressures affecting the global economy, customers are growing increasingly wary of how they are choosing to spend, save and manage their money. 

Layered onto this, the implications of open banking and a series of other complementary industry shifts are on course to substantially affect financial institutions and their business models. Increasing platformification is putting leaders in the sector under pressure to align costs and value of their products and offers, enhance relationships with their customers, and capture unique data to leverage in order to differentiate themselves from their competitors. 

To overcome the challenges, the ones that are exploring and experimenting with new and engaging customer interfaces, deepening and protecting vertically integrated relationships across financial and finance-adjacent value chains, and finding new ways to scale the reach of their products and services, are the ones that will stay afloat amidst the volatility. 

Shifting markets mean shifting priorities

In order to achieve these goals, business leaders in the financial services sector are looking critically at the technology and data available to them in 2024. In a competitive marketplace where new innovations and competitors are cropping up daily, a shift in focus onto customer experience for the purpose of increasing Customer Lifetime Value is the smart move. By leveraging the possibilities, business leaders are able to better serve their customers’ needs and desires, create greater opportunities to charm them and stay memorable amongst the competition. Here are four agenda items to place on your roadmap for customer retention impact now and into the future. 

1. Personalisation

Marketers have been advocating for the value of personalisation for several years but the possibilities have become increasingly more powerful of late. A personalisation token to include a first name in your email marketing is not going to cut it any longer. 

For most customers, seamless and insightful personalisation tactics across multiple channels is the standard expectation from the brands they are interacting with day to day. In fact, in a research study* of over 3,000 consumers from the US, Canada, UK and Ireland, it was found that over two-thirds (68%) of consumers say they are likely to be a loyal customer or purchase more of their products if a brand is engaging and building personal relationships with them. 

By leveraging and analysing owned data, organisations can gain rich insights into customer behaviour and individual preferences, using them to personalise interactions with them across multiple communication channels, from first-touch and beyond. Imagine the impact a customer service rep could make by having insights like birthdays, location details, preferences and previous interactions at their fingertips upon picking up a complaint call. 

Better insights for 1-1 customer interactions are one thing, but technology can also enable brands to deliver personalised experiences for customers at scale, making it a valuable tool for retaining a loyal customer base in today's competitive landscape. From customised product recommendations to tailored marketing campaigns that take into account data points like previous purchases or location, personalisation is an important way to build stickiness with customers, enhance the experience of interacting with your brand, and achieve better retention in the financial services sector.

2. Automation

The second agenda item to consider as part of any finance leaders’ journey to customer retention should be automation. From data collection and entry, to accounts payable, the finance sector involves sizable volumes of routine and repetitive tasks that can be easily absolved by robotic process automation. 

Assisted by more sophisticated and complex forms of automation such as AI and machine learning for decision making tasks, automation has significant productivity benefits for financial services businesses. With customer teams free of administrative duties, they are able to focus on providing a better customer experience overall which in turn, will help to move the needle on customer retention rates. Leaders in the finance sector understand that these activities will make a lot more impact to the growth of the business long term. Automation enables businesses to gain maximum ROI from their salaried employees and more importantly, keep them feeling happy, engaged and fulfilled in their day to day roles doing what they do best.

3. 360-degree listening for effective multichannel communication

With reliance on the digital technologies recommended so far, it is important to note that all of it comes with a caveat. Any platforms used for effective, data-driven personalisation and automation tools employed must be easy and intuitive for customers to use. They must be able to integrate and ‘talk’ to each other in order to enable seamless multichannel engagement in both directions from business to customer and customer to business. 

Qualtrics Global Consumer Trends report indicates that 63% of consumers say companies need to do a better job of listening to them, and with the increasing reliance on technology, this statistic is at risk of growing quickly. Despite its considerable benefits on the way we work today - the drawback is that using tech for everything makes it easier to forget about the human on the other side of the keyboard. 

To combat this, companies must make sure they are taking care to balance in-person and digital experiences to answer customer needs effectively, and work on humanising all digital interactions. The graph below shows that 62% of customers would prefer to open a new bank account for example, via self-service channels only. 

^{*Source: https://success.qualtrics.com/rs/542-FMF-412/images/Global-Consumer-Trends-2023-AU.pdf
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The brands that are equipped with the tools to be able to listen to each customer - understanding intent, capturing context and then ensuring that insight is accessible across the entire organisation, are the ones that will stand out against the competitors.

Today’s customer expects a smooth and easy journey for interactions with businesses they choose to work with, whether it’s via the website, email and SMS, mobile app, WhatsApp, chatbot or social media channels. Too many of us have had to type out lengthy explanations of connectivity or account issues with a chatbot on either a telco or finance providers’ website, only to have to repeat ourselves a week later in a conversation with a customer service rep when the problems are not resolved.

This is a perfect example of how technology can be used to enhance and complement the human experience without totally replacing it - with all of the meaningful customer data stored and served up at the right time, there would be no need for annoying repetitions, and the customer experience becomes as frictionless as possible. 

“As a business, we'd come to the conclusion that we needed to be wowing our customers all the time, and Pendula is a tool that directly meets that need. It was a customer-driven initiative and we're seeing customer results.”

Brad Hoyle, Head of CRM Systems, BizCover

4. Innovation

Finally and possibly most importantly, finance leaders must stay ahead of the curve and be proactive about adopting the latest innovations to ensure they are meeting, and continue to meet their customers’ evolving needs. This means keeping a close eye on emerging trends, examining how they can enhance their offering and impact outcomes, experimenting with new tools and be willing to pivot quickly if something isn’t working as forecast. 

Emerging technologies such as artificial Intelligence, national language processing and machine learning can help financial services organisations analyse and process large amounts of data more quickly and accurately. This can enable more efficient personalisation (like customised investment recommendations for instance) automation and better customer listening which results in superior outcomes for the entire organisation.

In such a rapidly evolving and strictly regulated sector, the importance of best-in-class fraud detection and prevention, efficient Know-Your-Customer (KYC) processes and robust security credentials is business critical. Equally as critical for the success of any financial services company is maintaining the trust of their customer base. The quickest way to completely annihilate customer trust is to be involved in a data-breach or cyber attack. A bullet proof, cloud-based technology stack, embedded as part of a sophisticated security roadmap is an essential feature for any such business. 

In summary, by focusing on personalisation, automation, 360-degree listening for effective multichannel communication, and staying ahead of the curve, finance leaders can leverage technology to retain customers in 2023 and beyond.

Start a conversation with Pendula

When you’re ready to step up your customer engagement strategies, we’re here with the solution. Talk to an expert about how Pendula can make a difference to your customer engagement.

^{*Source: https://movableink-marketing.s3.amazonaws.com/2022/reports/audience-of-one-2022-getting-personalization-right.pdf}