"Is it time to cut the cord?"
In what has been commonly described as the Golden Age of Television, millions of Americans have asked themselves this question. Subscription-based alternatives like Netflix, Amazon and Hulu – all offering more customized services at a lower cost – have disrupted the cable service provider monoliths, forcing the industry to re-examine its product offerings and truly prioritize the end user if they seek to retain customers for the long-term.
Starting to sound familiar? It's hard to deny the parallels between what's going on with the cable providers and with financial technology. Given that nearly three-quarters of bank operators put the customer experience as their single biggest priority, according to an Accenture study, retail banks and credit unions are asking a version of the same line of inquiry: Is it time to break ranks with outdated technology vendor service providers?
Customers are making the switch – why not you?
Deciding whether the move is right doesn't come easily, especially if you've formed a relationship with vendors over the years and can't help but feel a sense of loyalty to them. Customers often express the same kinship with their retail banks and branches, but they are willing to sever ties if facilities don't adapt and supply the services that they have come to expect. For instance, in a Gallup survey done earlier this year, millennials were over two-and-a-half times more likely to have switched primary bank providers in the previous 12 months compared to baby boomers and one-and-a-half times more likely than Generation Xers. They all switched, but millennials did it more often, which is notable, given that they are expected to overtake baby boomers as America's largest generation in 2019, according to the Pew Research Center.
Much like cable, customers are willing to pull the plug with their banks if they're better able to obtain the services they want from someplace else. What is it that customers desire? As the Gallup survey and other polls have shown, it's a combination of things, such as online banking capabilities, digital access, account flexibility and protection from unnecessary fees.
But they also seek advice that they can put into practice. According to a 2018 Retail Banking Study conducted by J.D. Power and Associates, nearly 80 percent of banking customers said they were interested in obtaining helpful money management guidance from their banks. Community banks and credit unions – with deep roots with customers that potentially stretch back decades – are uniquely suited to deliver this kind of personalized guidance.
Paul McAdam, senior director of banking practice servicing at J.D. Power, indicated that today's banking facilities deserve credit for prioritizing the customer experience, often achieved by investing in consumer technologies and operational efficiencies. But they need to take it a step further.
"Many banks are increasing their emphasis on providing practical advice and guidance to help customers gain greater control over their finances and meet specific financial goals," McAdam explained. "The challenge for banks is getting the advice formula right and delivering it in a personalized manner across all channels – not only at the branch, but also via the website and mobile app."
"Vendors must be doing their jobs so you can better do yours."
Where does the vendor relationship come in?
In other words, if your vendors aren't making it easier for you to broaden your customer service capabilities and complimentary offerings, it may be time to go with a vendor that helps you do your job better by doing its job better. That may be in automation, transformation, electronic security or central operations.
Not only do customers want advice, but they overwhelmingly believe that it's benefited them. Indeed, 89 percent of respondents in the J.D. Power poll said the guidance they got from their retail bank, when it was offered, proved practical in their daily lives. The problem? Few customers actually receive recommendations from their banks, with just 28 percent of respondents saying they can recall obtaining financial tips or pointers. Your vendors need to give you the gift of time to dedicate to improving these customer relationships.
Direct banks are backsliding
Ensuring that you're fully satisfied with your vendor is crucial to how your branch operates and also how you can capitalize on the failings of others, including direct banks. For instance, according to a separate J.D. Power study that was conducted in June, direct banks aren't as popular with customers as they used to be, due to retail banks outperforming them in providing customers with more tailored information and possessing a better understanding of their needs. Additionally, direct banks have lost ground in mobile, as satisfaction with mobile channels fell 8 percentage points in the Direct Banking Satisfaction Study compared to last year's.
Bob Newhaus, financial services consultant at J.D. Power, said that if direct banks want to improve their relationships with customers, "they need to focus on cross-channel consistency and ramp up their digital capabilities."
Bottom line? If your vendor is no longer cutting it, the time has come to cut the cord. BranchServ has the experience, professionalism and commitment to provide the behind-the-scenes, back-office services so you can put the customer first and foremost. Find out why more than 12,000 banks and credit unions nationwide have made the switch.