How can banks enhance customer engagement?

24 November 2016Karen Wheeler, UK Country Manager, Affinion

NewsPiece of MindRetail Financial Services



I recently attended the Meeting of Minds Retail Financial Services meeting in London and enjoyed having the opportunity to hear from inspiring spokespeople across the industry and discussing the current landscape of UK banking. 

The mix of delegates epitomised how the retail banking industry has changed over the past decade. New challenger banks are emerging (the latest digital challenger, Tandem, launched early this month) and bringing exciting innovation to the market, but the common goal for all banks remains the same: attract new customers and then provide the best possible products and services to encourage them to stay. 

What became clear at the meeting was that banks of all ages and sizes are all facing the same challenge of both acquiring new customers, and keeping existing customers happy, within a highly regulated, competitive environment. When mapped against changing consumer behaviour over the past decade, the challenge becomes even greater. 

Innovations in technology have transformed the way customers engage with their banks, leading to customers becoming more autonomous and empowered than ever before. The British Banking Association’s The Way We Bank Nowreport revealed that the use of banking apps rose from 7 million in 2014, to 11 million in 2015. This has had a direct impact on in-branch visits, with the number of visits declining from 476m in 2011 to 278m in 2016. Anthony Browne, BBA Chief Executive, commented in the report’s foreword: “This is very much a consumer-led revolution. Customers are harnessing new technologies because it’s fast and convenient, allowing us to manage our money when and where we please.”

This shift in behaviour means banks need to constantly evolve to keep pace with the needs and expectations of their customers. Banks must now demonstrate the added value they can offer customers through products and services which benefit their lives and bring ease, convenience and peace of mind. The more banks can become an integral part of customers’ lives, the higher the potential level of engagement. This will lead to the holy grail of a loyal customer – one who sees their bank as an indispensable asset and advocates it to their friends and family. 

We believe a crucial way to achieve this is by providing services that benefit customers’ lives and make their experience, and relationship, with their bank a positive one. For example, helping customers keep their data secure online, providing support when they are making travel plans or easing the pain of important administration such as insurance renewals. In order for banks to build engagement with customers that extends beyond the traditional role of managing their finances, banks should think about how else they can become integrated in their customers’ lives. We worked with RBS Group to develop a central benefits website to enable RSB, NatWest and Ulster account benefits to be consolidated into one ‘hub’ site, with single sign-on access to all benefits. This kind of ease and transparency is what customers expect and demand of banks in this modern age. 

Achieving high customer satisfaction levels is crucial in order to lay the foundations of trust, engagement and loyalty. The UK Institute of Customer Service (UKICS) report found that 96% of customers rating an organisation nine or ten out of ten for customer satisfaction also gave the highest levels of trust. As banks well know, customer satisfaction levels are in constant fluctuation depending on the quality of their experience.

Indeed, the UKICS report found customer satisfaction is lowest during the first five years of relationship between a customer and their bank, peaks between years 6-20 and then drops for customers who have dealt with an organisation for more than 20 years. The key is for banks to offer a consistent level of service and experience that sets the foundations for a long-standing relationship based on trust and satisfaction.

Challenger banks have disrupted the banking scene with a ‘digital first’ approach that appeals to the lucrative millennial market. We believe the high-street banks that invest in innovation and leverage the strength of their heritage will be able to forge deep engagement with their customers. Banks today need to not only respond to customers’ needs but anticipate and inspire their behaviour with innovative and creative solutions that differentiate them from the market. The banks that can do this and provide a holistic, personalised, digital and frictionless service to their customers will succeed in 2017 and beyond.

Our next Meeting of Minds Bank & Brand Distribution of Retail Financial Services  will be held on Tuesday 25 April  2017 at the Lanesborough Hotel. For more information please do check out either our community page, or contact Hannah Jackson on 01483 862694 or email her