By: Nancy Steadman
Amid economic turmoil, new banking regulations and large institutions' new emphasis on fee income, banks and credit unions are seeking out new strategies that will best drive customer loyalty. A new study conducted by IBM Global Business Services shows that banks' shift from complex products and services to more client-focused relationships may change the way institutions operate and cement customer loyalty.
While managing risk and providing innovative tools and services to customers will remain an important element in maintaining a strong customer base, the study concludes that developing stronger relationships with consumers will play a more central role. Finding ways to balance fee-income models and avoiding "one-size-fits-all" pricing and service bundles may improve banks' appeal to a broader demographic of consumers.
In addition, the study highlighted the need to better understand consumers, and their needs overall, in order to develop new channels for reaching out to them.
"To increase satisfaction, banks need to better understand how people bank, how often they bank and what products and services they seek when banking," according to the analysis. "Banks then need to use this information to align product and service prices with client needs in the client’s choice of channels. Simultaneously, banks need to improve client satisfaction in all channels."
Many institutions, ranging from large-scale financial corporations to community banks and credit unions, are relying on social media platforms to introduce new products and maintain personalized contact with consumers, a move that separate studies show may benefit banks. Through social media tools, such as Facebook and Twitter, banks can communicate with individuals and request feedback regarding banking practices and respond to consumer questions or criticisms. As more Americans rely on mobile technology and social media platforms to communicate, experts say that using this type of platform to reach out to existing and new customers offers institutions a low-cost and more personal option for reaching out to individuals.
"It is not surprising that a large percentage of our small, independent business owner clients utilize Facebook, Twitter, and other forms of social media to communicate with their clients and suppliers," Newtek CEO, president and chairman Barry Sloan told American Bankers Association Banking Journal. "It is clearly the most cost effective, efficient utilization of the internet particularly for a small, independent business owner that does not have huge resources in staff or dollars."