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Is engagement the key to banks halting customer churn?

4th Aug 2014
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Consumers want more engagement with their banks and to be offered more incentive to stay with them, according to research from Verint Systems and the Customer Contact Association (CCA).

Having surveyed 1,000 consumers about their current views on banking compared with other sectors, the study found just 3% of customers felt rewarded by their banks.

It also found that customers expected more retail-style offers from banks in order to convince them to stay loyal, as well as more interaction on a personal level.

Recent figures from the UK Payments Council have shown that over half a million UK customers have switched bank accounts so far in 2014 since new regulations were introduced to make switching easier, a 14% increase on last year.

“With customer churn now on the rise, banks need to do all they can to listen to the voice of their customers, engage and unify the entire process across all channels,” says Marije Gould, VP at Verint.

“They must encourage customers to be more vocal, act on what they say and specifically communicate this to them, while offering rewards when they are due.”

The survey does offer some encouragement for financial institutions – it found that over half of participants (55%) had never made a complaint about their bank and 66% even stated they were happy with the overall service they received. Loyalty figures still remains high, too: 76% of those surveyed had been with their bank for three years or more (although that has been expected to alter in line with the regulation changes).

The research also uncovered an opportunity for banks to encourage more vocal customers and nurture 'Silent Likers' – customers that are the happiest with the service receive, but don't engaging with them.

“Given that 18% will tell friends and family if they have a positive experience with their bank, there is a good opportunity here to incentivise recommendations and conversations,” Gould adds.

“Banks can really learn from other sectors that have gone this route, such as retailers that already do this well in order to convert ‘Silent Likers’ into loyal brand advocates.”

Retailers currently have the happiest customers (78%), according to the survey.

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By Karanbir Singh
02nd Jan 2017 07:03

As more customers deal with a business, more is its revenue, value, and potential. Thus, customer engagement is undoubtedly a vital factor for business success & revenue growth. Though banks need to invest more efforts, as stated in the article, there are industries like telecoms that are facing a strict competition. They need to start engaging customers right from the moment they join, as higher usage results in a better revenue for operators. Hope this blog delivers some value to service providers looking to boost engagement metrics from onboarding stage.

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