Bank customers are loyal to neither love nor money
Usefulness is better than an emotional attachment
Banks can sideline disruption and achieve customer growth with better data utilization, according to a study conducted by Forrester Consulting for Equifax, aimed at evaluating the fragmenting value chain in the banking industry.
While roughly one-third of companies are collecting customer data from common engagement channels, such as general transaction history, customer service data, or online banking activity, less than 50% of banking providers are actually using this data to better understand customers and create more relevant experiences. To this point, the study found that 41% of consumers see no discernible difference between banks when it comes to the products and services they offer.
Additionally, the study highlights opportunities for banks to better satisfy customers and increase engagement by making interactions more relevant - something that is enabled through more effective utilization and analysis of customer data to extract customer insights.
Findings from the study, humourously titled 'How to Become Your Customer's Favorite Bank (Even if You Can't Be Their Only One)', included:
- Consumers have an array of banking relationships because they prioritize utility and getting the best deals
55% of consumers have relationships (i.e., products or services) with two or more financial service providers (inclusive of their primary bank). - Bank executives are worried about the changing landscape - and they have reason to be
When asked how concerned banking providers were about customers using multiple service providers, nine out of banks indicated some level of concern, with 40% indicating strong levels of concern. - Most marketing efforts remain broad and non-segmented
Only 25% of surveyed banking providers said they have a deep enough understanding of consumers to profile and target specific segments.
"Our mission is to help banks serve customers better with relevancy and simplicity," said Chris Atwood, senior vice president of marketing for Equifax. "We see what our customers are doing well, and we're committed to helping them dial up effective uses of data and predictive analytics to improve customer lifetime value now and in the future."
Sources: Equifax / The Marketing Factbook.
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