In brief
- The key to acquisition and retention is keeping an ear to the ground and an eye on social and industry trends to develop a sixth sense of what customers want. Our latest research underwrites that initiative
- We commissioned the Luxoft Consumer Switching Report to replace conjecture with hard facts and deep insights into what American banking customers really think and what makes them switch
- Our research has thrown up one or two surprises and plots the roadmap for implementing these learnings. Does your bank have the necessary modernized systems and technologies to succeed?
Once upon a time (it seems light years ago), financial institutions controlled customer relationships by default.
The local population looked to their village bank to safeguard the family cash. That was the norm. Then, headmasterly managers of imposing and long-established branches told loyal customers what they could and couldn’t afford.
These days, consumer loyalty is a fractured concept. Increasingly, the demise of the branch network means banks have to meet, engage and continually delight customers online to secure their business. Accordingly, the three financial services priorities are innovative product development, omnichannel access and an exceptional customer experience.
A single digital button gives browsers access to a seemingly endless stream of financial products from the comfort of their armchair, barstool or mountain base camp if necessary. So, if a customer doesn’t like what they hear from one of their multiple financial services providers, they can switch to another, then switch again as soon as they’re offered something more interesting.
But do they? What’s really happening out there?
Time for a change
As a domain expert, Luxoft is fully aware of the formidable challenges your bank is facing right now. We are committed to helping financial organizations like yours review and modernize their operational systems — tailoring technology solutions to meet unique market demands, ensuring that banks and customers both come out ahead.
Vital new research into what customers want from a bank
Innovation, social listening and evaluating industry trends to develop a sixth sense of what customers will want next are the first principles of acquisition and retention.
So, we commissioned the Luxoft Consumer Switching Report to replace conjecture with hard facts and deep insights into what American customers really think. We wanted to unearth intelligent nuggets to inform our own financial services offerings so we can help you differentiate while reinforcing the trust and loyalty element of your consumer relationships.
Here’s a snapshot of what we found.
Luxoft Consumer Switching Report
- Research objectives
- To examine the challenges consumers are having in the banking industry
- To figure out how to fulfill consumer expectations via technical solutions and help banks meet customer demands while improving operational efficiency
- Key questions
- What do consumers expect from their banking services?
- What are the overriding consumer needs/wants/challenges/pain points?
- How do consumers choose a bank?
- Why don’t some customers change banks even when their needs aren’t being met?
- How often do customers change banks?
- How do banking trends impact consumer expectations?
Top line: Despite ever-changing customer preferences, many of our American respondents have been with their favorite bank for several years. However, that doesn’t mean they’re averse to taking advantage of interesting offers elsewhere and banking with one or two others simultaneously.
Rationale for using multiple financial institutions
- Different services and better rates are the primary reasons for using more than one institution
- 40% of respondents indicated that when it comes to themselves and their partners, they prefer to keep accounts separate by using more than one institution
Bank attributes most liked, and areas for improvement
- Reliability and trustworthiness are the most liked attributes for over 50% of respondents
- Most respondents want their institution to create offers that surprise and delight
Past switching behavior
- 50% of respondents have switched financial institutions before
- Switchers canceled every account and moved them to one other financial institution
Future switching behavior
- A small proportion of respondents have not switched financial institutions before but plan to do so
- Of those potential switchers, around 30% planned to switch either in the following couple of months or the 3-11 months after that
Reasons for switching
- Over 20% of respondents indicated that they wanted to switch financial institutions to get better interest rates
Barriers to switching
- Over 50% of respondents indicated that changing banks is a hassle
Ways and frequency of accessing bank services
- Around 30% of respondents indicated that they bank via smartphone or tablet app, daily
Customer service experience
- Respondents say they usually get friendly and helpful customer service
Working with insights
Against behavioral trends, the research has thrown up one or two surprises. The prime consideration now is putting these learnings into practice. So, does your bank have the modern technological infrastructure, core systems and mainframe hybrid cloud capabilities to give current customers what they want while attracting/retaining new prospects?
Customer centricity, automation and self-service via chatbots, etc., are no longer nice-to-haves. They’re fast becoming essential differentiators, pillars of every modern-day financial business.
Putting the customer first
Adopting a customer-centric approach boosts overall business value by enabling the bank to differentiate itself from competitors using consumer knowledge and insight.
Luxoft helps you work more customer-centric by capturing and visualizing user intelligence to improve decision-making and create a fully manageable, 360-degree view of customer engagement. It helps you develop a positive customer experience and extra value at point-of- and post-sale.
Appreciating user engagement and evaluating expected customer lifetime value (CLV) sharpens the bank’s service approach by segment. Customer centricity also paves the way for fluent:
- Self-service
- Hyper personalization
- Process automation
- Policy-based decisions and procedures
- Customer service development (including VIP treatment)
Keeping agile and open-minded
Agility and flexibility are essential organizational and IT architectural characteristics. Rethink your business model approach and discover how to:
- Get to market faster with new and innovative ideas
- Coordinate and support omnichannel offerings, effectively
- Transfer services from channel to channel
- Create transparency and build customer trust
- Acquire and structure essential data
- Analyze and manage aggregated data
Reducing your time to market enhances real-time events, encouraging the organization to collaborate in new ways. Projects with a beginning and end are transformed into continuous delivery, with shorter and shorter releases of new and updated services. Also, leveraging a more loosely coupled service architecture improves flexibility.
About Luxoft
Luxoft is the design, data and development arm of DXC Technology, providing bespoke, end-to-end technology solutions for mission-critical systems, products and services. We help create data-fueled organizations, solving complex operational, technological and strategic challenges. Our passion is building resilient businesses while generating new business channels and revenue streams, exceptional user experiences and modernized operations at scale.
Want to know more?
If you’d like to dive deeper into how Luxoft can help you influence the consumer switching decision, visit our website. Or, if you’d prefer to discuss your bank’s customer engagement ambitions and challenges one-to-one, contact us.
For more Banking and Capital Markets insights, see Luxoft on LinkedIn
