Cross-Sell Existing Customers with Financial Wellness and Rewards Programs
In the fiercely competitive banking industry, attracting and retaining customer deposits is paramount. The traditional banking landscape is rapidly evolving, and financial institutions must adapt by offering innovative solutions tailored to the changing needs and expectations of their customers.
This blog post delves into how banks can harness the power of innovation to not only attract new customer deposits but also maintain and grow their existing customer base. From new types of products to optimized customer acquisition processes, here are some strategies that can help your bank stand out.
Revitalize Your Offerings
Consumer demand for financial services is evolving, driven by technological advancements and a shifting preference toward digital transactions. These factors necessitate the development of novel products and services.
Offerings must not only cater to the modern consumer's needs but also act as a differentiating factor that sets a bank apart from its competitors. Furthermore, they can help in attracting new customers, retaining existing ones, and fostering loyalty, thereby leading to sustainable growth in customer deposits and overall business.
Here are a few of the most innovative offerings available in the financial industry today for both consumers and businesses:
Consumer Offerings
Digital-Only Banking Platforms
Digital-only banking offers customers a fully digital platform that provides a range of financial services. These platforms capitalize on the increasing consumer preference for digital transactions, providing customers with the convenience of conducting all their banking needs on their devices, whenever and wherever they choose.
Despite the popularity of digital-only banks, many consumers still need in-person services to address complex financial issues, ask questions, and get advice on their financial health. This makes a hybrid approach to banking a good opportunity for traditional banks.
Digital Wallets and Mobile Payments
Digital wallets and mobile payments allow consumers to make instant, cashless payments using a smartphone, tablet, or smartwatch. Some popular digital wallets include Apple Pay, Google Wallet, and Samsung Pay.
In addition, several banks now offer mobile payment solutions. This innovation eliminates the need for physical cards and cash, providing customers with a secure, convenient, and fast payment method.
Peer-to-Peer Lending Platforms
Peer-to-peer (P2P) lending platforms connect borrowers with individual lenders, bypassing traditional banking intermediaries. They offer competitive interest rates for borrowers and potentially higher returns for investors compared to traditional savings accounts.
These networks have historically operated outside of financial institutions, but they still represent an opportunity to offer customers a non-traditional means of borrowing.
Cryptocurrency and Blockchain Technologies
Cryptocurrencies like Bitcoin and Ethereum provide a new form of digital asset based on a network that is distributed across a large number of computers. Blockchain technology itself offers secure, transparent transactions.
Despite the tumultuous nature of the cryptocurrency market to date, blockchain technology could still revolutionize the way we conduct financial transactions in the future.
Commercial Offerings
API Banking
API (Application Programming Interface) banking allows financial institutions to share data with other companies through a secure connection, enabling businesses to integrate their systems seamlessly with the bank's operations. This integration leads to efficient and automated financial processes, thereby saving time and resources for businesses.
It further allows businesses to access real-time banking data, simplifying financial decision-making and enhancing productivity.
Supply Chain Financing
Supply Chain Financing (SCF) is a set of tech-based business solutions that improves cash flow by allowing businesses to lengthen their payment terms to suppliers while providing the option for their suppliers to get paid early. This financial innovation aids businesses in better managing their working capital and ensuring smooth operational processes without hindering the financial stability of their suppliers.
Invoice Financing
Invoice financing allows businesses to borrow money against the amounts due from customers, alleviating the cash flow issues caused by delayed payments. This way, companies can maintain continuous operations without having to wait for invoices to be paid.
This is particularly beneficial for small and medium enterprises (SMEs) that experience uneven cash flows.
Robo-advisors for Business
Robo-advisors are automated platforms that provide digital financial advice based on mathematical rules or algorithms. These algorithms are designed with the support of financial planners and investment managers to offer businesses tailored financial advice and portfolio management with minimal human intervention.
This can help businesses make sound financial decisions, manage their investments efficiently, and achieve their financial goals.
Make Opening New Accounts Easy
Reducing the complexity of the process of opening new accounts can significantly contribute to customer acquisition and retention, thus boosting deposits. A simplified and user-friendly process encourages more customers to open accounts, as it eliminates the often daunting paperwork and time-consuming procedures associated with traditional banking.
Moreover, ease of account opening is particularly appealing to younger, tech-savvy generations who appreciate efficiency and convenience. Streamlining this process also leaves a positive initial impression on customers, which can enhance their loyalty and the likelihood of depositing more funds in the long run.
In addition, when the account opening process is effortless, current customers are likely to open additional accounts for different purposes, further increasing the bank's deposits. Therefore, prioritizing a seamless account opening experience can be a crucial component of a bank's strategy to grow and maintain its customer base and deposits.
Cross-Sell Existing Customers with Financial Wellness and Rewards Programs
According to a recent study, overall customer satisfaction with the advice and guidance provided by national and regional banks has significantly declined. Financial wellness and rewards programs are gaining popularity among consumers due to their potential to create a positive financial impact and enhance customer satisfaction.
These programs often provide valuable financial education and tools that help individuals manage their finances more effectively, cultivating financial stability and promoting a sense of financial well-being. This proactive approach to financial health is attractive to customers, particularly those who want to improve their financial habits and achieve their financial goals.
Rewards programs, on the other hand, add a layer of value and incentive to the customer relationship, fostering loyalty and engagement. By offering points, cash back, discounts, or other benefits for using certain products or services, banks can demonstrate appreciation for their customers' business and encourage further transactions.
Providing these programs can improve customer retention as they add yet even more value to the customer experience. In essence, customers who bank with companies that provide these services are getting more services for the same price.
Connect with At-Risk Customers Through Personalized Messaging
Finally, banks should use lifestyle-based messaging to communicate directly with at-risk customers, such as those who are close to overdrawing their accounts or those who have missed payments on loans.
Doing so serves a dual purpose.
For the customers, it provides timely information and potential solutions to help them navigate financial challenges. This can help to alleviate stress, avoid additional fees, and foster a sense of trust and loyalty towards the bank.
For the bank, it contributes to deposit retention by proactively managing risks and maintaining healthy customer relationships. By taking a proactive approach, banks can potentially steer customers away from costly and unfavorable situations like overdrawing their accounts or defaulting on loans, thereby safeguarding the bank's deposits.
Explore the Future of Financial Products
These are just a few of the possibilities you could employ at your organization to improve customer and deposit retention. To learn more about the future of financial offerings, don’t miss the next Future Branches event. It’s happening at the JW Marriott in Austin, Texas from November 28 - 30.
Download the agenda and register for the event today.