Ideas & musings about consumer behaviour

How personalisation can help banks retain customers

In research conducted across retail financial services, in 2014 and 2015, it was found that around 74% of consumers would initially prefer a provider, when looking for a banking product, because they’re a current customer. However, of that 74%, 35% go on to choose a different provider to open an account with or apply through. The credit card industry fared the worst with 41% of people selecting a different brand, followed by mortgages with 34% going elsewhere.

Brands within the banking industry generally aim to encourage customers to hold multiple accounts and products with them, so to lose a current customer to another bank when they’re seeking out a new product can result in a significant loss for the bank. Not only are they missing out on a new opportunity, but it also puts the bank at risk of losing the customer’s business across other accounts as well.

Why are banks losing so many opportunities?

In addition to competitive offers and rates, website usability plays a major role in which brands consumers choose to do business with. To assess how well banking websites aid consumers online, a series of consumer experience benchmarking studies were conducted. For the most part, Australian banks perform relatively well across the online customer journey, compared to UK peers, however there is one area that suffers greatly: the handling of existing customers.

Across the main banking products, credit cards and mortgages are the worst performers in this area, with industry averages of 38% and 30% respectively. The performance is far better within transactions accounts, averaging 58%, leaving personal loans (45%) and savings accounts (44%) in the middle, although still a lot of room for improvement.

Existing customer handling

When we break down some of the key elements used to aid in existing customer handling, we can see that there are areas that are lacking. Looking at the Big 4 banks (ANZ, CBA, NAB and Westpac), all brands ask if you’re an existing customer during the application process for a personal loan. However, when it comes to applying for a credit card or transactions account only three of them ask and for mortgages and savings accounts only two ask the question.

Going on to prompt a non-registered customer to register for online member services, three brands do this for transactions accounts, but only one brand for each of the other products does so – and it’s not the same brand each time!

Big 4 banks criteriaFrom this assessment we can see that not only are there areas that are missing, but there is also an inconsistency across brand websites. In recent years there have been endless discussions about ensuring a consistent user experience across devices in order to create a seamless flow as consumers switch between desktop and mobile devices. This same focus of consistency is not being considered and implemented across the full product range a brand’s website offers. When there isn’t a predictable and reliable flow throughout a website, it creates more work for the customer as they try to navigate their way through a mix of design structures.

It’s human nature to stick with what we know. So if a customer knows the process of opening up a savings account with Bank X and they now want to get a credit card account, then it would be reasonable for them to expect the process to be similar. If Bank X is offering a completely different experience across the two products, then there is no sense of familiarity for the customer and therefore getting a credit card account with a competing bank would hold just as much consistency.

Until brands implement a more universal approach on their websites, customers may as well view each product offering as a separate website. So the question for customers then becomes whether to use different websites within the same domain or across a multitude of sites? After all 18% of consumers surveyed within our consumer experience benchmarking studies for financial services products, stated that if they encountered a problem they would most likely leave and try a different site.

 

Visit our research library for more research across the banking sector and register your brand to ensure it’s captured in our next study period.

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