The migration away from the branch channel that started decades ago has accelerated in recent years – aided by the confluence of the pandemic and technical advances. Banks now operate in an age where it is possible to deliver a seamless integrated digital first retail banking delivery model. Such a digital first business model needs to accomplish two objectives in the digital space: it must foster trust and deliver personalization.
Kinēsis’ research into issues of trust and personalization, suggests there is much work financial institutions need to do to achieve the objective of fostering trust and delivering personalization. Nearly as many customers do not trust their primary financial institution as those who do. Meanwhile digital channels exhibit a weaker relationship between trust and satisfaction compared to non-digital channels.
Customer perceptions of trust and satisfaction with their primary financial institution vary greatly based on what they value in the relationship with a financial institution. Importantly, for managers of the customer experience, what customers value in a relationship with a financial institution also reflects channel preference and selection.
Understanding customer segments should inform channel management.
In our research, Kinēsis segmented survey respondents into four groups based on their answers to a battery of questions regarding which retail financial services are most important to them. This segmentation grouped respondents into four attitudinal segments which we describe as follows:
|Show Me The Money|
These customers seek financial value from financial institutions. They are significantly more likely than other respondents to feel value for money and competitive rates and fees are most important when doing business with a financial service provider.
These customers value personalized service from their financial service providers. They tend to feel the most important attributes of a financial service provider are personalized service with polite and knowledgeable staff, providing quick and efficient service and fast resolution to any issues.
Customers who grouped into this segment are were more likely to value a broad range of products, loyalty programs, ethical and sustainable business practices, recommendations and an appealing brand.
|Don’t’ Make Me Wait|
These customers value efficiency. Almost exclusively they respond quick and efficient service and fast resolution to any issues are most important to them.
Let’s explore how customer attitudes and values can reflect themselves in trust, satisfaction and behavior.
Trust in Financial Institution
Customers who value products and services have stronger trust in their primary financial institution, while those who value efficiency display weaker trust.
When asked the extent to which they agreed with the following statement, “My primary financial institution looks after my long-term financial wellbeing.” Customers who value products and services professed the strongest agreement with this statement, and were significantly more likely to agree with this statement compared to customers who value efficiency.
Satisfaction with Financial Institution by Channel
Customers who value products tend to be more satisfied, while customers who seek financial value tend to be less satisfied.
In general, automated channels appear to have higher satisfaction compared to personal channels. Customers expressed the highest satisfaction for mobile apps and the lowest satisfaction for contact centers.
Preferred Channel to Open Account
Customers who want quality products and services are significantly more likely to want to use a mobile app to open an account, as opposed to visit a branch.
About half of the respondents preferred to open an account at a branch, about one-third would prefer to use the website, while only one in ten would prefer a mobile app to open an account. The customer segment most likely to find appeal in using the mobile app are those who value products and services.
Preferred Channel for Problem Resolution
The contact center is the preferred channel to resolve a problem, followed by the branch.
Customers who want quality products and services are significantly more likely to want to use a mobile app to resolve a problem, as opposed to visit a branch.
Preferred Channel for Information
When asked how they prefer to get information, a plurality of customers prefer to use the website, followed by the contact center.
Customers who seek service quality are significantly more likely than financial value seekers to want to visit a branch to get information.
Preferred Channel for Advice
It is clear most customers still prefer the branch when seeking advice. Seeking advice is a type of transaction we refer to as a moment of truth, with high importance on the relationship with the customer, and it’s clear a little hand holding is appreciated across all segments.
Customers who seek service quality are significantly less likely than others to want to visit a website to seek financial advice.
Preferred Channel for Funds Transfer
The majority of customers prefer mobile apps to websites for funds transfers.
Customers who seek quality products or services are significantly more likely to prefer mobile apps to transfer funds, compared to those who seek service or efficiency.
When segmenting customers by what they value in a financial institution, differences begin to appear between customer segments in both measures of trust, satisfaction and behavior.
Customers who value products and services tend to trust and be more satisfied with their primary financial institution. This most likely reflects the transition from a branch centric model to a digital first model. Customers who are product oriented are less likely to require personal attention. Not surprisingly, these customers are also more likely to use a mobile app to complete a variety of transactions.
Preference for financial value and efficiency do not appear to have significant behavioral differences, however, attitudinally, they display different feeling of trust and satisfaction. Customers who value efficiency display weak trust in their primary financial institution; while those who seek financial value are generally less satisfied with their primary financial institution.
Customers who value service quality are most likely to be left behind in a switch from a branch distribution channel to a digital first deli very model. These customers represent 25% of all bank customers. They are less likely to use a website and app and more likely to visit a branch.
As the industry transitions to a digital first delivery model, managers of the customer experience will need to pay close attention to the customers who value personalized service and human interaction in the customer journey to foster both trust and satisfaction.