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Archive for the ‘Financial Services’ Category

With summer in full swing, the banking and finance industry is not taking a vacation as it continues to find ways to leverage new technology and satisfy customers. Below are three emerging trends in the industry to watch as we continue to move through the second half of 2016.

 

blog-banking-trends-2016

     

     1. Refreshing Customer Experience

Creating an effective customer experience strategy is not a new topic for the banking and finance industry. As new technology develops, banks may adopt new customer-centric practices or opt to redesign its customer experience strategy entirely. Simplicity, efficiency, and responsiveness are three key principals that drive effective customer experience. Best practices show successful organizations carry these three principals through all facets of the brand. Additionally, the brand’s customer experience should yield the same results both online and offline (e.g. customer services reached via a mobile application versus over the phone). This creates a streamlined effort among the organization as a whole, which sets the brand up to appeal to a wide variety of consumers. To ensure success, organizations must evaluate its strategy and presence to meet the needs of consumers.

     2. Expanding Mobile Payments

As the demand for fast and simple digital solutions rise, many consumers are turning to mobile payment services (also known as digital wallets). Currently, there are a variety of providers in the market ranging from well-known technology industry leaders (e.g., Apple Pay, Android Pay, Google Wallet, etc.) and others that primarily focus on digital payments (e.g., PayPal, Venmo, etc.). These types of mobile payment services provide a digital means for transferring money rather than using the traditional cash or check. Since the process is easy and at your fingertips, advocates for mobile payments suggest that it’s the ideal way to transfer funds. Although there are still user concerns regarding security, digital payments continue to show advancement both in the industry and the mind of consumers.

     3. Leveraging Big Data

While the term may still seem intimidating to many companies, big data is more commonly being used by banks and financial institutions to learn more about its customers, as well as the brand itself. Many companies are collecting massive amounts of user/customer data, but are unsure of how to use it. Digging into big data may point to gaps in service offerings, identify key customer demographics, or lead to deeper consumer insights. As consumers’ expectations rise, it will be important for banks to use big data to set actionable strategies to compete.

All of the trends above have an impact on the customer experience. To remain competitive in the marketplace, many banks and financial organizations are seeking assistance from researchers to inform strategic initiates which will deliver a cutting-edge customer experience. If you are interested in learning more about our research capabilities, please contact Sandy Baker, our Senior Director of Business Development and Corporate Strategy at SandyB@RMSresults.com or by calling 1-866-567-5422. Visit our website at www.RMSresults.com.

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retail banking

Over the years, branch usage and face-to-face transactions have decreased in frequency at financial institutions.  Alternate banking channels have become more convenient, familiar, and rich in features.  Consumers are turning to ATMs, Kiosks, Mobile, and Online to conduct transactions that in the past they may have gone to a branch for.  A study conducted by FMSI found a 45% decrease in average monthly branch transactions between 1992 and 2013, and this trend has been accelerating since 2007.  This ultimately leads to fewer personalized touch points for interacting with customers, and increases the risk of customers viewing their financial institution as more of a commodity, and less of a comprehensive source for their financial needs.  As a result, it is becoming increasingly important for retail banking institutions to take a consultative approach with customers and members.  This is an opportunity for financial institutions to differentiate themselves from competitors by providing a unique, personalized service and establishing their organization as a full-service, primary financial institution.

Emphasizing the importance of branch and live representative phone transactions, and taking a consultative approach with customers has many advantages.

  • Increase share-of-wallet and revenue.  Financial service representatives should be trained to learn about customers, ask the right questions, and identify appropriate cross-selling opportunities.  A financial institution establishing itself as the customer’s primary institution will help grow overall operating revenue as customers use more of that institution’s products.
  • Establish competitive advantages.  At the present time, financial institutions may find that developing a relationship with customers through a consultative approach is a unique selling proposition in their market.  Delivering a personalized experience to help customers find the products that best suit their needs and providing them with financial consultation will help an institution position itself ahead of the competition in the customer’s eyes.
  • Increase customer retention and loyalty. Developing a relationship with customers, and being the place customers turn for all financial services will ultimately improve customer retention.  The most critical phases in establishing customer relationships typically occur either in-person or over the phone.  A Gallup study found that customers prefer interacting in person at a branch for opening an account, applying for a loan, or seeking financial advice.  The study also found when reporting a problem, or inquiring about a fee, customers prefer to use a branch or interact with a live person over the phone.  Taking the time to coach customers with opening an account, or solving a problem will certainly have a long lasting influence on customer loyalty.

Market research is a tool that can be utilized by financial institutions to understand customer needs and identify areas of opportunity.  Customer and market area insights make it easier to effectively consult with customers and tailor products and services to their needs.

  • Identify the needs of customers, as well as the needs of the primary market area.  An image and awareness study conducted with the general public will provide insight on the market’s awareness of financial institutions, and perception of service offerings.  It can also further examine products and services individuals are using, and identify the needs of the market.   Another option is a customer satisfaction study, conducted among customers to provide insight into customer needs, and satisfaction with the services offered.
  • Identify competitive offerings in market. Competitive assessment studies identify competing financial institutions, along with details of the products and services they offer.  This allows financial institutions to adjust their messages, offerings, and customer experience to ensure they maintain their position in the market place and are able to exceed competitive offerings and services by tailoring the customer experience.
  • Mystery shopping studies.  Financial institutions conduct mystery shops as either ongoing studies, or in waves throughout the year.  Keeping an eye on the customer experience helps institutions measure the effectiveness of employee training.  Mystery shopping can also identify opportunities through understanding the true customer experience.  Mystery shoppers will report on how personalized their experience was, and if their experience aligns with the approach representatives are expected to deliver.

Market research can assist financial institutions with offering a consultative approach and improving customer engagement.  Focusing on the consultative approach will help banks and credit unions build life-long relationships with customers and remain relevant and top-of-mind when customers need financial products and services.  If you would like to learn more about conducting market research studies for banks and credit unions, please contact Sandy Baker, Sr. Director of Business Development & Corporate Strategy at 1-866-567-5422 or by e-mail at SandyB@RMSresults.com.

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Banking User Experience

Over the past decade, the frequency of online banking usage has grown. A study conducted by Pew Research in 2013 found that 51% of US adults bank online.  Additionally, a 2014 study by the Federal Reserve found that 51% of smart phone owners have used mobile banking in the past 12 months. Customers have come to expect online and mobile banking solutions from their institution.  Simply offering online and mobile banking solutions is not enough; there is a growing expectation for the applications to be intuitive and allow the user to have a top-notch experience.

The user experience with online banking channels is becoming a vital factor in the customer process for choosing a primary financial institution. The banking user experience should be frustration-free, with a design that doesn’t require significant thought or training. Online banking solutions should allow customers to quickly learn how to interact with the solution and accomplish their task. According to a Novantas study, nearly half (43%) of users who use digital banking channels log into the mobile application and online banking portal at least weekly. For optimal customer satisfaction, it will be important for banking institutions to provide a seamless and consistent experience, in addition to delivering a good user experience for online channels.

While most people connect to their bank’s online portal to simply view their current balance or transfer money between accounts, many individuals also expect more features to be available.  This is quickly becoming the norm as institutions innovate and offer new features such as remote check deposit, viewing their budgets, having automated financial advice, and being able to quickly transfer money to other individuals. Being able to accomplish all of your banking tasks with an online or mobile application is a growing part of the user experience.

The usage and importance of these banking channels is anticipated to expand, along with elevated expectations for a satisfactory user experience. It’s increasingly important for financial institutions to understand how their users interact with these channels and learn more about their preferences, frustrations, and satisfactions with the current offerings. Market research can be used to address these issues and provide valuable insight to the operations team at your financial institution. Here are a few examples of banking experience studies that Research & Marketing Strategies has conducted for clients:

  1. Satisfaction & Usage Studies – An all-encompassing satisfaction and usage survey will help your institution understand how customers are interacting with your banking channels, determine their usage preferences, and provide satisfaction data regarding these channels. Conducting a quantitative study of this caliber will allow you to understand your institution’s customers and guide strategic planning.
  2. Usability Testing Studies – Conducting a study to interview users as they utilize your website or application is a great way to understand user experience from a typical customer’s perspective.  The customer will walk through the website and application, and vocalize their experiences.  This is a great way to identify potential frustrations and opportunities for improvement to the digital customer experience.   This “in-the-moment” methodology will provide the vision needed to deliver an enjoyable user experience for your customers.
  3. Follow Up Experience Surveys Follow-up surveys are something we employ for a variety of projects and industries.  Contacting users either online or through telephone  shortly after they interact with a channel, or have an experience with your business is a great way to obtain fresh, top-of-mind feedback.  In banking, this is a good opportunity to monitor customer satisfaction and identify potential issues.

If you have questions about Banking User Experience research or would like to learn more about our banking research services, please contact Sandy Baker, Senior Director of Business Development & Corporate Strategy at SandyB@RMSresults.com or by calling 1-866-567-5422.

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I love secondary research. I employ the strategy of ‘if it exists, I can find it online’. I am always searching for new content for our clients online in the banking and finance, higher education, and in healthcare. One of the latest secondary research reports I came across in banking and finance was the Winning Through Customer Experience Report written by Ernst & Young. It is a global consumer banking survey conducted each year in which results are released and summarized.

Global Consumer Banking Survey

Here are my 5 key takeaways from this study:

  • Good customer experiences is vital to growth – Although overall financial stability is the number one reason people trust their financial institution (FI), “the way I am treated” was a close second. Other important elements of the customer experience (CX) and building trust included communications, quality of advice, and complaint handling. Quality of advice is a factor that RMS has been tracking over the years with our clients. More and more customers and members are expecting their financial institution to anticipate financial needs and recommend new products for them, working as almost a financial adviser to them.
  • Problems happen, financial institutions need to focus on the resolution experience – the report indicates that customers are expecting their financial institution to act as problem solvers to issues. It’s not the problem that matters but rather how the problem is handled. Our research at RMS has shown to confirm that problem resolution has the most significant impact on overall satisfaction with a financial institution. As the report indicates there is astounding upside if customers are satisfied with problem resolution and a downward spiral if they are dissatisfied. Banks and credit unions should place additional rigor and monitor these outcomes.
  • A struggle for differentiation – Although 60% of respondents do not have plans to open or close any accounts with their financial institution in the next 12 months, the report explains this cannot be interpreted as loyalty. Nearly one-quarter (22%) indicated that all financial institutions are the same and 17% stated it was too difficult or time-consuming to change. The time-consuming switch of FIs follows suit with research conducted by RMS in the past. Many view the process of switching FIs as too challenging which typically results in low customer churn among institutions. Many clients have employed “switch agents” or “switch liaisons” to help customers with this process of switching bills, automatic payments, accounts, etc. to reduce the time needed to make a change.
  • Convenience and trust trump all other factors when choosing a bank or credit union – The blue (convenience) and yellow (trust) diamonds perform high on both importance to a customer and satisfaction with that factor from their financial institution. ‘Keeping financial information safe’ and ‘protecting financial information’ are must haves which is why many FIs have adopted HIPAA-like policies. Looking for factors to help differentiate your bank or credit union from the competition? Choose the factors with high importance and low aggregate satisfaction (e.g., ‘is transparent about what they charge for and makes it clear to you how to avoid paying fees’ and ‘communicates important information clearly’.) If you can perform well on these two factors you will be ahead of the majority of your competitors.
Bank Importance vs. Satisfaction

Click to enlarge – pic taken from EY.com report comparing importance of factors compared to satisfaction with same factors

  • Segmentation is the key to understanding your customers and responding to opportunities – Many clients have undergone efforts to segment their customer base. Segments share common behaviors, expectations, preferences, and therefore solutions. It also assists with future targeted and niche strategies for new customers or members. This report sub-divided 32,000 respondents into 8 global segments: (1) self-sufficients, (2) balancers, (3) safety seekers, (4) new world adopters, (5) unhappy and unmovings, (6) elites, (7) traditionalists, and (8) upwardly mobiles. These segments can be analyzed by preferences and behaviors as well as traditional demographics such as gender, age, education, income, assets, etc.

Research & Marketing Strategies (RMS) is a market research firm that specializes in banking and credit union market research. We are based out of Syracuse, NY but we have clients across the country. If you are interested in talking more about potential market research and surveys with our firm contact our Business Development Director Sandy Baker at SandyB@RMSresults.com or by calling 1-866-567-5422.

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Banks and credit unions work with numbers every minute, of every day, from opening until closing. The financial industry is in essence a numbers game. So metrics and measurements should not scare the vast majority of professionals working in financial industry. As a result, many banks and credit unions employ market research to aid their decision-making. Market research, much like the financial industry, is all about numbers and digging into why numbers go up and down. Market research provides financial firms with the data and consultation necessary to help drive bottom-line numbers. It’s much like un-peeling an onion.

Bank and Credit Union Metrics

Below are 5 metrics that banks and credit unions should be tracking on a continual basis. These metrics help guide banks and credit unions to improved customer loyalty, greater share of wallet, a stronger employee culture, and a superior bottom-line.

  • Net Promoter Score (NPS)

Who am I? NPS is one of the most popular loyalty statistics in not only banking and finance but across all industries. It is calculated by asking the respondent how likely he/she would be to recommend the bank using a scale of 0 to 10. Scores are categorized into three groups (promoters = 9 and 10, passives = 7 and 8, and detractors = 0 to 6). The percentage of detractors is subtracted from the promoters to arrive at an NPS.

How do you track me? A full-scale quantitative study (400 completes or more) is needed to confidently predict NPS. It is recommended that a telephone survey to a random set of customers be conducted to calculate NPS (it can also be done online if the team is willing to accept sample bias). An image and awareness non-customer study can give you insight into competitive NPS ratings as well. Here is a blog post which provides more information on NPS.

  • Closed Account Drivers

Who am I? This metric is calculated and tallied to help banks and credit unions understand why customers and members are closing particular accounts. From there, banks and credit unions can create talking points and language for front-line tellers to handle the most popular reasons for closures in order to reduce terminations.

How do you track me? Using a quick pulse survey (approximately 100 completes) will give your financial institution a strong grasp on popular reasons for account closures. Ideally, this study should be a monthly tracker, comparing drivers from month-to-month and testing new initiatives to counter-act closures. Here is a case study on account closures completed at a large bank.

  • Cross Selling Frequency

Who am I? This metric is the percentage of time that customer service reps (CSRs), member service reps (MSRs), or other platform personnel discuss or cross-sell other types of accounts during the time of sit-down. For example, if a customer comes in to discuss questions regarding free checking, the CSR should take the time to discuss the benefits of paid checking accounts, savings accounts, or other services in order to increase the number of customer accounts at the bank.

How do you track me? Exploratory research using mystery shopping can track this metric to some degree and be compared wave-to-wave. It is recommended that the financial institution pursue a follow-up phone call methodology. Banks or credit unions pass a list of members that recently had a CSR or MSR experience in the last 24 to 48 hours to a market research, and the research firm uses its data center to follow-up and ask questions about cross-selling among other items. Here is a case study on mystery shopping completed by RMS.

  • Primary Financial Institution (PFI) Share

Who am I? PFI share is defined as the percentage of customers that name your financial institution as their primary one. This is typically the institution where the customer holds their primary checking account.

How do you track me? All banks and credit unions know what PFI is, but very little actually know what percentage of their customers use them as their PFI. So is the fact that you have 175,000 checking accounts good or bad? Are 90% of those checking accounts non-primary accounts for users? If so, how does that change your deposit account marketing and strategies? This PFI metric will answer those questions for you. A strategy that many financial institutions employ is bringing in new customers through rate promotions and cross-selling them on other products and services in hopes to convert them to a PFI user down the road. Here is a case study for an image and awareness study.

  • EmPulse Score

Who am I? The EmPulse is a proprietary score created by Research & Marketing Strategies (RMS) to define overall employee satisfaction and loyalty within a bank or credit union. The EmPulse score is calculated by using a combination of importance and satisfaction ratings in a series of 52 branded questions.

How do you track me? EmPulse studies are done completely online using invitations and follow-up emails sent directly to employees. Scores are tallied and the bank or credit union is provided with a question-by-question breakdown of scores which can be compared to all financial institutions across the United States. Here is a blog post which discusses the EmPulse process.

Are you a bank or credit union interested in learning more about any of these 5 metrics? Contact Sandy Baker, our Business Development Director at Research & Marketing Strategies (RMS) at SandyB@RMSresults.com or by calling 1-866-567-5422.

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Each year, the Financial Brand produces a comprehensive report on the landscape of banks and credit unions across the globe with the assistance of Aite’s Senior Analyst Ron Shevlin. As a market research firm that specializes on insights for the financial sector, our Analytics team always looks forward to the yearly release date for the new report. The comprehensive study helps our team provide better recommendations for our clients, benchmark their activity to other institutions, and helps us provide them with reference data for their marketing efforts.

Click here if you would like to read the full 2014 State of Bank and Credit Union Marketing report.

State of Bank and Credit Union Marketing Report

After reading the full report, I wanted to take some time to share my insights for our current banking and credit union clients. Here are my key takeaways from the annual report:

  • Insufficient budgets and manpower is the #1 challenge for financial institutions. Survey respondents reported this as their main concern for 2014, coupling nicely with #2 which is having too many initiatives. Using a consultant like RMS can free up time for your staff by outsourcing key research activities. Customer surveys can also be designed to help prioritize initiatives for customers.
  • The importance of mobile banking continues to grow. Nearly 70% of respondents rated mobile banking solutions as the most critical product or service to promote in 2014.
  • Why aren’t more banks and credit unions using NPS? Likelihood to recommend and NPS are such a key driver to loyalty and likelihood to switch primary financial institutions (PFIs), so I am shocked to see that 55% of banks and credit unions do not measure NPS. You can obtain NPS through a simple image and awareness survey to your markets.What is NPS and why is it important? Click the previous link to find out.
  • Online account openings not offered by the majority. We’ve seen through past research how important internet/online and mobile banking is when choosing a PFI, especially among those aged 35 or younger. Still only 41% offer online account openings and another 24% haven’t yet but plan to do so. Social media, email marketing, and online ads dominate the tools used by marketers but it doesn’t appear operations are following suit to electronic platforms. So banks are using online strategies to recruit new customers, but fail to fulfill those same user’s needs once they grab their attention. That’s a major concern.
  • Emergence of switch kits (finally). One theme that is reoccurring in our market research is respondents reporting is the high barriers to switching financial institutions, especially PFIs. With the adoption of e-deposits, direct deposits, automatic bill pay, and more, customers fear of switching all of that information to another institution is at an all time high. Switch kits are packets that help banks and credit unions collect data from customers’ deposits and withdrawals to one form so the bank can seamlessly make the switch for you. Team this with a switch liaison staff member and financial institutions are finally starting to break down this barrier and create a full-on shopper’s marketplace.
  • Poor response rate. Okay, maybe this one hits home as a market researcher and doesn’t necessarily relate directly to banks and credit unions, but the Financial Brand states it has over 1,000,000 readers and only 300 participated in the survey representing a response rate of .03%. I hope there isn’t any non-responder bias.

Research & Marketing Strategies (RMS) is a market research firm for banks and credit unions. We specialize in a number of market research studies for financial institutions including image and awareness surveys, customer satisfaction and loyalty studies, new account surveys, closed account surveys, branch feasibility studies, and employee surveys. If you are a bank or credit union looking to conduct market research contact our Business Development Director, Sandy Baker at SandyB@RMSresults.com or by calling 1-866-567-5422.

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The overall trend for banking has been moving towards customers and members of banks and credit unions having on-demand access to their financial information including everything from simple balance and transaction data to more detailed personal finance analytics.

Many financial customers want to be in touch with their finances. They want to know what their balance is at any time, and mobile technology is going hand-in-hand with this, by making information remotely and immediately available through smart phones.  According to a March 2013 study conducted by the Federal Reserve, nearly half (48%) of smart phone users have used mobile banking in the past 12 months and the most common activity is to check account balances or recent transactions (87%).

While desktop personal finance management programs have been around for a long time, online and mobile applications (that are compatible with nearly all financial institutions) are becoming very popular as well.  Many of the tools are independent of a financial institution, but banks and credit unions are also adopting their own personal finance management programs that are built into its product offerings, so its customers don’t have to do any additional sign-up.

Some of the applications go as far as combining all of the information from your financial accounts (checking, savings, credit card, loans, investments, etc).  By aggregating all of your financial data into one management tool, the tool is able to provide you with detailed analytics such as categorized income and expenses, which allows you to set budgets and monitor how far along they are every month.  Additionally, by setting these budgets, many of these tools can send you SMS/e-mail alerts to let you know if you go over budget in a category.  In some tools you can also customize your own financial alerts such as letting you know if you have a major withdrawal from your account, or even an upcoming credit card payment that’s due.   Mint.com is one example of an online finance application, and to show its massive popularity: it has grown from having 1.7 million users in 2009 to having 10 million users in 2012.  Below is an example screenshot of categorized budgets from their website.

budget_bar_chart

Ultimately, I believe the availability and accessibility of financial information (as well as analysis which help make sense of that information) is going to continue to become a more significant factor among banking customers – whether they choose to use this information or not, the customers appreciate the availability of it.  We know through industry research that banking customers are looking to their financial institutions more and more for financial planning and advice, and with that said it’s going to be important for financial institutions to recognize the role in finance management and have it echo through all of the products and services they offer.

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This blog post was written by our guest blogger Marc Bovenzi, Business Development Associate at Research & Marketing Strategies (RMS) a bank and credit union market research firm.

bank and credit union research

Get your questions answered for 2014.

RMS partners with banks and credit unions to improve marketing and management agendas through market research. Are you ready for 2014? Use research to reach full market potential next year.

  • Satisfaction Levels: Where do we stand? Is understanding your customer or member a top priority? Conducting satisfaction surveys with RMS will give you insight into how you can improve operations and attract new business. Bad experiences and lackluster offerings can add up to declining profits and ultimately a failing business. Read this RMS case study on a bank investigating it’s customer experiences when (1) opening a new account and (2) opening/refinancing a loan.
  • What’s Our Current Image and Awareness Levels?  If particular branch locations are under performing; it should not be accepted as the “norm”. RMS has several ways to analyze and research key contributing factors driving image and awareness. Read this RMS case study regarding this topic solved through a telephone survey. RMS can quantify the awareness of your branch location; measure impressions of recent advertising; understand knowledge level of offerings; and identify key drivers for becoming a customer or member of your financial institution.
  • What New Channels are Financial Industries Acting On? Besides the core business of loans and mortgages, banks and credit unions are seeking other viable ways to meet the needs of its customers or members. Mobile banking is becoming increasingly popular. RMS can conduct website usability surveys using heat mapping or focus groups. Determine the ease of use to navigate your website and test appeal of specific content. If your bank or credit union has not taken the next step into offering a mobile banking app or is thinking about offering other services; conduct a study with RMS to determine the level of interest to support your next steps.

Are you ready for some research? If you are a bank or credit union and would like to further discuss some options for market research please call the RMS Business Development office at (866)-567-5422. You can also reach us by email at SandyB@RMSresults.com or MarcB@RMSresults.com.

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Direct Banks are financial institutions that operate without branch locations. Services are offered through online and mobile banking, as well as telephone and mail.  Direct banking has been around for a while, however when it was first established, customers banked through just telephone and mail.  Direct Banks have become more of a consideration for people now as online and mobile technology advances and usage of this technology increases.  According to a study conducted by TNS, deposits for Direct Banks have more than doubled in the past 5 years, a growth rate that is more than 3 times the industry average.  Mobile and online banking has become more and more advanced, allowing Direct Banks to offer new services that enable their customers to handle nearly all of their transactions online or through a mobile phone.  Some of these transactions include depositing checks by taking a picture of them, sending payments via e-mail or text message, as well as handling of the more routine online transactions such as transferring funds between accounts and paying bills.

what are direct banks?

Courtesy of jimmarous.blogspot.com

While it may seem frightening to some to deal with a bank that has no branches and no “faces”, there are many incentives these Direct Banks provide to attract customers.  Direct Banks are able to offer these incentives largely because they do not have to cover the costs of operating and maintaining any branch locations.

Incentives to Using Direct Banking

  • Higher interest rates
  • Lower fees on products and services
  • Members of large ATM networks (i.e. Allpoint Network).  In some cases, Direct Banks even reimburse a certain number of ATM fees, so that you can use any ATM in the country without having to pay for it.
  • Typically more advanced mobile applications to handle transactions

A few examples of Direct Banks

Again, the fact the Direct Banks have no branches means no face-to-face contact, which many customers appreciate and often deem a “necessity”.  Our research has shown time and time again that even though customers are using the branch lobby less and less, customers still place a high value on having a bank’s branch lobby and in-person customer service available if needed. Despite these findings, the decreased usage of branches (particularly among the younger age audiences) combined with the incentives offered by Direct Banks, users seem be getting just enough of a push for them to give up branch lobbies and face-to-face contact and utilize Direct Banks.

Based on our past research, the key to retaining customers in this industry is delivering superior customer service, particularly in times of need. The few experiences customers actually have with financial institution’s staff usually weight heavily and are a main driving factor behind overall satisfaction and likelihood to recommend the financial institution.  In order to continue to be successful, Direct Banks will have to demonstrate their customer service ability, and in order for traditional banks to stay competitive, they will likely have to keep up with the mobile offerings of these direct banks and most importantly, demonstrate the value of in-person customer service and interactions.

What are your thoughts on the future of banking?  How many people do you believe are willing to switch to a Direct Bank? Comment below.

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Background: A local financial institution recently partnered with Research & Marketing Strategies (RMS) to assess its retail and business customer satisfaction, loyalty, and needs. Additionally, the bank wanted to use the market research to measure changes from the prior study conducted with RMS in 2009, awareness level of products and services at the bank, product wants and concerns, and other key items requested by the client. RMS consulted with the bank on the findings, assisted in developing action items from the recommendations, and formulated next steps.

customer satisfaction for banks

In a growing world of mobile and electronic banking, personal relationships still matter.

Approach: To address the specific needs of the market research, RMS worked with the designated banking team to design a 5 to 7 minute paper survey with an option to complete the questionnaire online using a unique passcode. A random sample of 4.000 bank customers were mailed the survey. The sample of 4,000 bank customers was taken at random from the bank’s database. Sample was proportionate to the number of customers the bank serves. In order to obtain a reliable number of completes from business customers, RMS over-sampled that population slightly. Surveys were mailed in early 2013 and the fieldwork was left open for approximately 8 weeks.

Do mail surveys still work? Click here to read more.

How do I improve my mail survey response rate? Click here to read more.

Results: Here is a brief summary of some key statistics:

  • Overall satisfaction with the bank remained extremely high. In total, 88% of survey respondents indicated a high level of satisfaction with the bank  (8 to 10 on a 1 to 10 scale). Customers are also very likely to recommend the bank (78% rated their likelihood to recommend as an 8 to 10 on a 1 to 10 scale).
  • Over half (60%) of the bank’s customers who use a competitive institution rated the bank as “better” than others. In addition to that, the bank’s Net Promoter Score (NPS®) was higher than comparable financial institutions nationwide. However, overall satisfaction with the bank did drop by 6% points since 2009, which detailed an overall satisfaction rating of 94%.
  • Personal experiences still played a large role in the foundation of impressions that were formed by respondents about the bank. Approximately 86% of all customers used or visited the branch lobby as part of their customer experience with the bank while another 55% use the drive-up.
  • Respondents mentioned four main factors as drivers for choosing a primary financial institution (PFI): (1) location; (2) customer service; (3) staff; and (4) convenience.

Are you a bank or credit union that is interested in conducting customer satisfaction surveys or member satisfaction surveys? Contact our Business Development Director, Sandy Baker at SandyB@RMSresults.com or by calling 315-635-9802.

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