Boost Consumer Loyalty for Banks and Credit Unions Through the Implementation of Technology

October 7, 2019

Compliance Lender Services

Boost Consumer Loyalty for Banks and Credit Unions Through the Implementation of Technology

In a previous blog, we discussed the importance of speaking to customer needs, to boost customer loyalty and Net Promoter Score in banks and credit unions. In this blog, we’re going to focus on one specific strategy to increase consumer loyalty: incorporating technology.

As the world becomes more digital, the demand for technology-based services increases, particularly among younger generations. Read on to learn how banks and credit unions can take advantage of this trend.

The shift toward digital banking

One obvious way banks and credit unions can incorporate technology in a consumer-friendly way is to become more mobile-friendly. Today, online banking interactions exceed the combination of both branch and ATM interactions, as well as exceeding landline phone banking interactions. In addition, mobile users tend to report higher Net Promoter Scores than non-mobile users, making mobile banking an essential channel for banks and credit unions to embrace.

However, there are effective (and ineffective) ways to implement and promote mobile banking.

Here are two major strategies to keep in mind:

Focus on everyday activities: Research shows that consumers prefer to use mobile banking for everyday activities such as checking balances, remotely depositing checks and paying their bills. Focusing on activities such as these can improve consumer loyalty. When it comes to more complex activities such as opening or servicing an account, these are more likely to cause disappointment for a consumer when conducted digitally and are better off kept to more traditional channels.

Maintain multiple banking channels: Although digital banking is important, it should not replace other channels such as in-person and ATM. Most banking consumers use a combination of physical and digital channels to conduct their banking activities, and consumers who use multiple banking channels typically have higher Net Promoter Scores than those who use only one channel.

Take advantage of big data

Another way banks and credit unions can take advantage of technology is with the use of big data. In fact, financial institutions have access to more consumer data than any other sector, giving them the opportunity to capitalize on this highly valuable information.

Consumers today prefer personalized messaging and are more likely to respond to it, as opposed to a generic message that doesn’t speak to their personal needs. The increased use of mobile devices creates the ability for banks and credits to reach individual consumers—but many institutions lag behind in using data to deliver personalized messages.

Banks and credit unions who are not currently making use of big data should consider making it a focus. Consumers who feel that their bank or credit union understands them are more likely to be loyal and have a high NPS. Plus, banks that apply analytics to consumer data have 4% more market share, on average, than banks who don’t.

If you’re interested in learning more about Net Promoter Score, technology solutions and how they can benefit your bank or credit union, be sure to download our latest whitepaper, How Banks and Credit Unions Can Use Technology to Improve Consumer Loyalty. And if you have any thoughts or questions, please share them in the comments section below.

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