The coronavirus pandemic has touched virtually every aspect of consumer life, prompting consumers to evaluate which service relationships truly provide value to them—and which they’ll leave behind in their transition to the “new normal.”
Financial institutions that deliver an experience that meets customers’ changing needs in the age of social distancing will be rewarded with new business and greater loyalty. Those that don’t will struggle to remain competitive.
Social distancing guidelines have caused many consumers to trade face-to-face branch visits for digital interactions. Indeed, the digital channel is a useful and efficient one, but only if it is user-friendly and meets consumer needs. Customers who have a frustrating digital experience may not have the option to easily visit a branch to get assistance in person, leaving them likely to feel frustrated and stuck—and that’s very bad news.
Conversely, financial institutions that invest in optimizing digital and expanding digital options to deliver the best experience possible will be well-positioned to attract and retain customers. In fact, with interest rates at record lows, digital experience – not cost – will become a major differentiator for loan acquisition. That means ensuring your digital experience is smooth, seamless, efficient and, of course, useful.
A slick digital interface does no good if it doesn’t provide the functionality customers are looking for. Providers should closely evaluate their digital channel and consider making the following modifications:
Increase remote-deposit dollar limits to make it easier to deposit checks without having to visit a branch or ATM
Provide multiple options for convenient disbursement of loan funds
Use e-signatures and touchless loans to facilitate remote document completion
Offer a convenient digital chat feature to quickly resolve previously tedious issues like duplicate charges
Actionable strategies for serving customers now
Of course, there’s a fine line between being recognized as helpful and being viewed as opportunistic, so it’s vital financial institutions show they have their customers’ best interest in mind.
Some 34 percent of Americans only have enough savings to cover three months of expenses. As the economy reopens, consumers may need help bridging paychecks or managing bills. Be sure to market a variety of tools, such as skip-a-payment and missed payment forgiveness programs, to ease customers’ near-term financial needs.
Offer special, unsecured personal loans at a low rate. These flexible loans are attractive to borrowers to help cover living and other expenses that arise from an unexpected change in financial situation.
Consider proactively reaching out to your most vulnerable borrowers. Have a conversation with them about how they have been affected and what their current and potential financial challenges are. Let them know you’re available as a resource to help navigate changes in their financial situation and determine their eligibility for alternative repayment or other loan relief options that might work better for them. Auto refinancing is a potential tool for this, as the rate differential is minimal. This means consumers can lower monthly payments by lengthening the loan term without experiencing a significant increase in the overall amount paid.
Prepare for the new future
As financial institutions focus on boosting their digital experience and settle into serving customer needs amid the realities presented by the global pandemic, it’s also important they continue to position themselves for growth in the changing economic conditions. This means asking questions such as:
Are there particular customer profiles that we should acquire that will help us weather similar crises in the future?
Are we prepared for business in the “new normal?” What will our customers need? What can we offer them and how can we grow the relationship as they reorganize their finances?
How can we grow new deposits and help customers achieve savings goals that will help them be better prepared for a future crisis?
The global pandemic is not only change how people view personal finances, but also how financial service providers respond to consumers’ urgent needs. The digital experience you provide and support today will determine how you retain customers, deepen relationships and acquire new customers in the future.
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