Bank CEOs and CFOs are under siege and experiencing an unprecedented wave of disruption across the industry. As they struggle to attract new customers and get their financial institutions back into organic growth mode, they’re watching upwards of 60 percent of all revenue growth go to new entrants in the space—such as fintechs, alternative lenders, and digital-first challenger banks.
The reason traditional financial institutions have struggled to retain business and attract new customers is because they’ve failed to keep pace with today’s consumers’ needs. As McKinsey and Company outlined rather bluntly, changes to banking have primarily come as a result of regulatory pressure, not out of some sense of innovating for the customer and their benefit.
The financial institutions that are succeeding, on the other hand, are the ones who have worked to make banking more seamless, user-friendly, and hyper-personalized. These fintechs, alternative lenders, and digital-first challenger banks have transformed the purchase experience by pushing the boundaries of the customer experience.
Similarly, bank CEOs and CFOs need to focus on sales transformation in their own right if they want to stop the bleeding, attract new customers, and return their financial institutions to a growth mindset.
Sales Transformation in Banking
Traditional financial institutions are being forced down this path, and to reimagine the way they develop business, because traditional customer acquisition is failing in the face of increased and unfamiliar competition.
According to the ABA Banking Journal, most banking customer acquisition today is largely based on one factor: location.
Of course, this isn’t shocking to anyone who has spent even a day inside of a bank branch. While there’s certainly a degree of community outreach and marketing that goes into it, most bankers depend on where their branch sits on Main Street, and how much foot traffic it can generate, to attract new customers.
Unfortunately, in 2019, this outdated strategy doesn’t work the way most banks would hope. In fact, in analyzing call reports, most banks in the US today are reporting either flat or shrinking business portfolios.
The competitors disrupting the industry, however, aren’t sitting around waiting for business to come their way. They’re going “outbound” and actively targeting customers they think they can peel away from other financial institutions by offering a better, more convenient customer experience that meets consumers’ digital-first expectations.
What Customers Expect From a Bank’s Sales Transformation
While this outbound approach to business development might seem novel, it’s actually directly in line with customer expectations today, and the data bears this out.
In fact, just 26 percent of customers prefer a traditional banking experience as opposed to a modern, digitally-enabled banking experience, according to the most recent numbers from McKinsey and Company. That’s a 12 percent drop from 2017.
Even more worrisome for bank CEOs and CFOs is the fact that some 80 percent of bank customers said they’d be willing to switch their financial institutions for a better customer experience. So what, exactly, does that mean and how can banks transform the purchasing experience and how their bankers go-to-market to meet that desired experience?
First and foremost, today’s bank customers expect omnichannel support. This means customers expect to be able to get in contact with their bank through their preferred channel, whether that’s over the phone, online, or in person. They also expect to be able to start a task in one channel and finish it in another. This means that customers expect the banker their speaking with to be able to address their questions or concerns, regardless of whether they’ve ever before interacted with the representative with whom they’re speaking.
As McKinsey and Company notes, omnichannel support provides the type of customer experience that is conducive to new account openings, facilitates conversations around financial wellness, and expedites issue resolution. The result is a more seamless interaction from the start.
Targeted, relevant, and attainable product offers
Secondly, like with omnichannel support, customers expect their financial institutions to know who they are. Beyond issue resolution and financial advice, this means banks need to know their customers’ financial situations, and needs, when they initiate conversations. They expect their banks to use the mountains of data at their disposal to ensure product offers are both relevant and attainable, and not just a waste of time.
While this type of hyper-targeting—sending the right offer, to the right person, at the right time—is a key factor in acquiring new customers, as SourceLink outlines, It’s also a key piece of growing share of wallet, as highly satisfied customers are roughly 2.5X more likely to open new accounts or purchase new products with their existing financial institution.
Speed and accuracy
Finally, and potentially most importantly, customers expect speed and accuracy from their banks. And while digital tools like mobile apps come to mind, it’s actually major crediting decisions that tend to eat up the most of a customer’s time. In a digital-first world, consumers expect banks to have their credit policies digitized, their applications online, and their decisions within minutes
Used correctly, research has shown that a bank’s use of automation, machine learning, and AI can reduce overall costs by as much as 40 percent in customer-facing, middle-, and back-office activities. By becoming more efficient, banks can conveniently offer customers credit decisions both rapidly, and on more favorable terms.
Enabling Sales Transformation
Delivering on these consumer expectations is difficult for traditional banks, but research has shown that it’s no longer an option for institutions that want to grow.
The fastest way for banks to achieve sales transformation is through strategic and thoughtful investment in the tools their organization uses to meet customer expectations. In fact, as Accenture showed in their recent report, there is a direct connection between a bank’s digital maturity and their ability to drive revenue.
Bank CEOs and CFOs interested in technology that can enable this kind of sales transformation and aid customer acquisition should consider Numerated’s.
Our platform was built inside a bank, by bankers, and uses advanced data-science along with purpose-built AI to help financial institutions drive growth and meet customer expectations. To learn more about Numerated’s platform and how it enables sales transformation, download our platform overview guide, now.