Banks Slow to Connect With Customers Digitally


NEW YORK (MainStreet) – A new survey of top banking executives reveals slow going on the digital banking front, in large part because financial institutions just aren't sure how to reach out to bank customers, even those who clearly want more automated banking options.

What we have here could very well be a failure to communicate.

Consider the average banking consumer’s point of view. According to Gallup, only 15% of Americans either had a “great deal” or “quite a lot” of confidence in banks.

Then there’s the bank’s point of view. Gallup adds that banks don’t believe “they’re doing anything wrong.”

That’s quite a disconnect, and may help explain why banks are hesitant – even skittish – about how they communicate with customers, and are equally uncertain about how to offer their services to consumers.

That’s not an exaggeration – it’s the conclusion of a study from the Varolli Corporation, a cloud-based communications software provider in Seattle.

Varolli says that banks are starting to see a “shift” in the way retail banking customers want to interact with their financial institutions. To a point, Varolli explains, banks are changing the way they reach out to customers, especially in interacting with mobile customers and with consumers who prefer “self-service” banking options.

But banks still have one foot planted in the 1980s and 1990s when direct mail and on-site banking agents were the main sources of consumer interaction with banks – and that’s a problem, Varolli says.

The company, which surveyed 1,000 retail banking executives across the U.S., concludes that banks need to adapt to changing consumer demands, although the current evidence suggests they’re having a tough time doing so.

"Every customer interaction that companies have is an opportunity to build a stronger relationship,” noted Brian Moore, industry practice manager at Varolli, in a statement. “With the growing popularity of smartphones, customers expect a more ‘connected’ experience from the banks they interact with. Customers want extensive self-service options and expect to be engaged through multiple channels like text messaging, email, social media, interactive voice and mobile applications.”

Moore also said that banks that are able to provide their customers with these experiences will not only win more new customers and greater market share, but also forge “lasting relationships” with existing customers.

Of course, that’s easier said than done, and that’s where the “hesitancy” issue may be plaguing banks.

The Varolli data shows that only 2% of banks consider texting to be a top communications channel for customers, despite the fact that 53% of customers prefer texting as their main source of banking communications.

Additionally, 4% of banks say that smartphone apps are a “top” priority, and 11% say the same thing about mobile banking, despite emerging sentiment from customers that they want those communications channels to be a priority.

Some other observations from the Varolli study:

  • Banks say they want to be more automated-driven, but 45% of banks still use customer service representatives to manually call customers on their mobile phones.
  • 54% of respondents still send direct mail to bank consumers, despite the fact that direct mail averages a “positive” consumer response rate of less than 2%, and that digital direct messaging is much cheaper for banks.
  • 54% of banks “don’t know how many numbers on their contact list are actually mobile phones,” Varolli says. That’s a big problem – it’s tough to create a mobile banking platform when you don’t know how many of your customers use mobile phones.

Clearly, banks need to do a better job of figuring out how consumers want to reached, and how they want to interact with their banks.

But if the Varolli study is any indication, they have a long way to go.

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