Think about a trust fall – the kind you've seen as part of all those "team building" exercises. When you have trust, you can feel free to close your eyes, lean back and let yourself be safely caught. Without it, you'd think twice about taking the plunge.
Trust for branches and credit unions is a two-way street and precipitates a veritable smorgasbord of opportunities: Your customers trust you to provide the financial products and services they need to make life easier. Their trust in you leads to ongoing success for your branch, with enhanced customer loyalty and more accounts stemming from referrals and positive word of mouth.
Here's the problem: Many Americans just don't trust banking professionals. Luckily, this very problem represents an opportunity for branches and credit unions.
Lack of trust in institutions
It isn't branches or credit unions, in particular, that a people are hesitant to throw their support behind – but rather institutions in general. For instance, in a 2017 survey conducted by Gallup, only around 35 percent of respondents said they were confident in the country's key institutions, among them medical systems, the military, Congress and public schools. For banks, in particular, the share was 32 percent, up from 27 percent compared to 2016.
As data from the World Bank points out, 1.2 billion adults globally have obtained an account from a financial institution of some kind since 2011. However, the unbanked and underbanked segment remains considerable, even in the U.S. where, according to data from the Federal Deposit Insurance Corporation, around 20 percent of U.S. households were underbanked or completely unbanked.
"28% of unbanked households cited a lack of trust as among the reasons for not having an account."
How come? A lack of trust is a common influence. Indeed, 28 percent of unbanked households cited this as one of the rationales for why they didn't have an account, with 11 percent citing an insufficient level of trust as their primary motivation.
Customers first and foremost
While this may seem like grim data, if you scratch at the surface, an optimistic message emerges: Financial institutions that can deliver a "trustworthy" experience have the opportunity to scoop up these underserved consumers – and smaller, more agile branches, armed with strategically sourced vendor partnerships, are particularly well-suited to deliver on this promise.
As noted by Gallup Senior Advisor John Wood and Consultant Paul Berg, customers have more options for financial services than ever before, with 80 percent contemplating making the switch to a competitor. Therefore, banks need to focus on building relationships both with their individual and small-business owner customers.
"Collectively, as the nation's largest employer, small businesses fuel job creation and economic growth far more than big businesses do," Wood and Berg wrote. "This is why Gallup recommends aligning your bank's strategy to help small businesses win."
The relationships that you form with your customers, both business and individual, will enable you to determine what it is that they want the most, be it more customized personal service or speedier transactions available through automation and then deliver to ensure their allegiance.
Proactive account holder engagement
Customers need to know that branches are more than places to keep their savings safe. They should understand what's available so that their money does more work for them.
"Proactively engaging with account holders through personal banking and providing them with the tools necessary to properly manage their finances and protect themselves from fraud can help ensure a long-term, profitable financial relationship," Forbes quoted from a report conducted by Javelin Strategy & Research. Examples may involve asking customers about whether they have an emergency fund and detailing various strategies that can help them contribute funds.
"Engaged customers net banks over $400 in additional revenue per customer each year."
Make engagement a priority
The work of building trust doesn't end with acquiring an account holder. It's an ongoing process to develop engagement and become a core part of the customer's everyday life. Data from Gallup shows that engaged customers yield banks over $400 in additional revenue per customer each year as compared to disengaged customers, The Financial Brand reported. Now $400 may not seem like a lot, but if you multiply that across every account holder you have, you're looking at some serious numbers.
Trust is everything when it comes to growing your base of customers, and building trust doesn't happen overnight. You need a vendor that's fully invested in this process, there to provide not just innovative solutions but on-going, expert service to support your crucial initiatives; especially those that facilitate enhanced engagement and opportunities for cross-selling. You need a vendor you can trust to deliver.
BranchServ specializes in the solutions that enable you to make your branch more customer-centric. From physical security to electronic security, branch transformation to integrated equipment, BranchServ has the tools and services to bring you and your customers closer.