“For Love or Money”: Equifax commissioned study finds that neither is a key factor in determining customers’ loyalty to their banks
A new study finds that banks can sideline disruption and achieve customer growth with better data utilization. The commissioned study conducted by Forrester Consulting on behalf of Equifax, aimed to evaluate the fragmenting value chain in the banking industry and to provide guidance for banks on remaining competitive amid growing competition and quickly changing consumer expectations.
The full commissioned study and its findings can be accessed by clicking here.
While roughly one-third of companies are collecting customer data from common engagement channels, such as general transaction history, customer service data, or online banking activity, less than 50 percent of banking providers are actually using this data to better understand customers and create more relevant experiences. To this point, the study found that 41 percent of consumers see no discernible difference between banks when it comes to the products and services they offer.
Additionally, the study highlights opportunities for banks to better satisfy customers and increase engagement by making interactions more relevant – something that is enabled through more effective utilization and analysis of customer data to extract customer insights.
“Our mission is to help banks serve customers better with relevancy and simplicity,” said Chris Atwood, senior vice president, marketing, Equifax. “We see what our customers are doing well, and we’re committed to helping them dial up effective uses of data and predictive analytics to improve customer lifetime value now and in the future.”
More findings in the study, “How to Become Your Customer’s Favorite Bank (Even if You Can’t Be Their Only One),” include:
- Consumers have an array of banking relationships because they prioritize utility and getting the best deals: 55 percent of consumers have relationships (i.e., products or services) with two or more financial service providers (inclusive of their primary bank).
- Bank executives are worried about the changing landscape – and they have reason to be: When asked how concerned banking providers were about customers using multiple service providers, nine out of 10 banks indicated some level of concern, with 40 percent indicating strong levels of concern.
- Most marketing efforts remain broad and nonsegmented: Only 25 percent of surveyed banking providers said they have a deep enough understanding of consumers to profile and target specific segments.
“In 2019, financial firms will focus on digitizing operations that deliver productivity improvements and improve customer outcomes,” wrote Benjamin Ensor, vice president, research director, Forrester Research, Inc. in the November 2018 blog post titled “Predictions 2019: Financial Services Firms Shift Their Focus To Operational Efficiency.”
The study conducted two surveys: one for 250 banking decision makers at US-based financial services companies (e.g., banks, credit unions, etc.), and another for 3,020 credit-active consumers across various demographics in the US.
Source: Market Screener