By: Julie Story
Cross-selling financial products and managing client relationships are two common goals that most banks and credit unions take on. A new report shows that many institutions may be missing a prime opportunity to accomplish these goals by taking advantage of their current consumer accounts whose holders are also small business owners.
According to a new study from Equifax, roughly 21 percent of consumer bank accounts are held by small business owners or principals. This represents another revenue-building channel and opportunity to build stronger ties with existing customers. Unrelated studies reveal that most individuals with varying accounts and banking needs would rather hold them with a single financial institution, so the opportunity to cross-sell products is also large.
"This finding is important because it represents a valuable opportunity for financial institutions to generate new revenue and wallet share of existing customers who may be wearing two hats – that of a consumer and a small business owner," said Dennis Behrman, assistant vice president of Product Innovation for Equifax Commercial Solutions. "The key is to be able to link consumer and business portfolio data into a 360-degree view that identifies those retail customers who also are profitable business-to-business targets. Armed with this knowledge, financial institutions can better understand and respond to the needs of those customers with tailored products and services, which can yield dividends immediately."
Beating out the competition
One of the primary reasons many consumers hold various bank accounts with different financial institutions is because all of their needs are not being met by a single entity. Therefore, it's imperative that financial institutions are equipped to offer a variety of different retail and small business banking products to appeal to the differing needs of a single customer. This may include credit products, online and mobile services and business management tools and resources.
Further, customer satisfaction studies reveal that consumers want to be able to access all of their funds via a single portal. Finding ways to integrate different accounts to add more convenience to customers who are juggling different assets is imperative to keeping them content with the level of service. In addition, loyalty programs for customers who require multiple products is another cost-effective way to boost satisfaction.