GLOBAL – PALO ALTO, CALIFORNIA, OCTOBER 10, 2011: How are consumers likely to react to recent moves by leading US banks to levy new fees for debit card use, checking accounts, and other in-branch services? A new poll by the Chief Marketing Officer (CMO) Council of 1,200+ consumers reveals that many won’t be happy and will question their current banking relationships.
In "What’s Critical in the Global Banking Vertical," sponsored by Ricoh, consumers are willing to learn more about relevant products, services, and offerings, but are more interested in information that will help their own bottom line and provide advice about managing their own personal finances more effectively. Consumers are also growing increasingly cynical about higher fees without better service.
While many customers feel that even through the worst of the recession, their relationships with their banks remained the same (32%), 20% of respondents admit they have had to avoid collections calls. New services have been helpful in managing finances, as services like online bill payment, online account management, paperless statements, and email or mobile account alerts are the most valued tools. But some of the new "cool tools" – including mobile or remote deposit, mobile banking apps, and person-to-person payments – are not at the top of the to-do list this year.
Churn and change may be the hallmarks of the next 12 months, even though 36% of customers have been with their banks longer than 10 years. Nearly one-third of respondents categorized themselves as "concerned" or "on the fence" about their banking relationships. And judging from customers who have changed banks in the last year, the shift will be made because they are seeking out more options or services (32%), lower rates (27%) or no surcharges or fees (25%).
"Banks have been enjoying a level of loyalty among consumers that is unprecedented in other markets, as customers have stuck with their financial institutions for decades with limited churn or defection," said Donovan Neale-May, Executive Director of the CMO Council. "But as customers are struggling to make ends meet, they are scrutinizing every bill, statement, and new offer for ways to save, potential errors in billing, and explanations for the growing list of fees they are paying each month. Banks must be quick to address these points of pain before customers consolidate accounts and take advantage of competitors with better rates or rewards."
Marketers are busy talking up services and programs, primarily in the form of new digital engagements that make banking easier, but are not as focused on delivering more educational or timely informative content. Despite an invitation to connect, bank marketers are struggling to realize any real returns on retention marketing campaigns thanks to silo-ed customer data and a lack of actionable insights.
Customers are also concerned about their banks’ ability to secure their private and critical data, as 20% of respondents identify data loss or a security breach as a primary concern with their banks. Yet only 22% of customers are opting into fraud-protection programs being offered as value-added services.
"Customers are saying that they are willing to pay for premium service and are actively opting in for additional products that help enhance their personal finance outlook, but any blind faith or no-matter-what loyalty in a bank is going away. Customers expect their money and their private and personal data to be secure…and they are asking for help to secure their own financial health. The real question is how prepared bank marketers are to deliver on this content call," concluded Neale-May.
