By: Joe Gillen
Switching banks has traditionally been considered a hassle, and several articles have highlighted the nightmares that many consumers go through in order to transfer their assets to a new financial institution. In addition to incurring costs to transfer funds and halt payments, switching to a new bank can be time consuming, with customers sometimes being forced to wait weeks before transfers are complete. Technological advancements have eliminated many of these headaches for consumers, and as they have more flexibility to take their money elsewhere, banks and credit unions will need to update their customer service skills and features to remain appealing to existing customers and entice new individuals eager to switch.
Community bank and credit union programs typically have the advantage in attracting and retaining customers and members, and customer satisfaction studies show that high rates of consumer sentiment are felt among those belonging to smaller institutions than those who bank with large Wall Street groups. This may largely be because smaller institutions provide more personalized services and offer more competitive rates and programs than many of their larger counterparts. For example, most local banks and credit unions continue to offer free checking as well as reward programs that offer cash-back incentives. Many of these programs were eliminated at larger banks when Dodd-Frank reforms were imposed.
There is still more small banks, credit unions can do in the future
While local institutions are highly regarded by most customers, there remains several small acts that can also help attract new customers. For instance, a recent Equifax article noted that some banks were becoming more proficient about not only providing first-time customers with a unique experience upon opening their accounts, but also continued to maintain contact months after they became customers. Banks might follow up one week after customers enroll to thank them for choosing their bank, measure their perceptions of the institution and answer any questions. Three months following enrollment, a representative may call to cross-sell services and products that may be of interest. This type of proactive approach may ensure customers feel valued, while also educating them on products and services of which they were previously unaware.
Studies show that the first 90 days after a customer joins a bank or credit union are critical in retaining them. Therefore, banks and credit unions may also benefit from having a one-on-one session with new customers and members when they first join to discuss their particular goals and services and products that might help them accomplish these goals.