Banks must use customer data to boost engagement with account holders, who are increasingly keeping them at arm’s length as trust goes through the floor and customers adopt more transactional relationships.
According to research from Accenture, the depth and quality of interactions between banks and their customers is declining rapidly.
The research reveals that customer activity using branch and online channels is falling while interaction on mobile platforms – involving quick, transactional interactions only – doubled. Accenture’s survey of 4,000 UK current account holder found online banking activity has halved since 2010, branch activity declined 19% in 2010 and 15% in 2011.
Peter Kirk, managing director of Accenture distribution and marketing services, UK said: “This year’s survey results underscore the banking industry’s central challenge to re-engage customers, as the ‘human element’ of the relationship diminishes.
“Banks’ success in rolling out efficient, user-friendly digital channels and its continuing consumer trust issues may be contributing to an increasingly arm’s length relationship between institutions and their customers, which affects their opportunities to sell and build loyalty.”
Banks will not only face difficulties selling more to customers, but could lose customers as loyalty declines. The survey revealed 15% of consumers had switched banks in 2012, compared with 10% in 2010.
Defections are likely to accelerate with the introduction of new rules in September which dictate that UK bank customers should be able to switch accounts in seven days.
“Banks can do more to engage with their customers in ways that strengthen their relationships. They should focus on the customer experience, so that across channels, customers receive a fast, efficient service,” said Kirk.
“Given the increased competition in the market, established banks must reward loyalty. And they must personalise how they engage with customers digitally, using big data and analytics to tailor a multichannel experience.”
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Banks ‘must use data to build ties’ http://t.co/3TUeASTPL4
A bit unfair to diss Accenture’s research and analysis on the basis of a short summary, but I can’t help thinking that like a great deal of research and analysis in the retail banking market, it’s better at diagnosing the problem than at proposing any kind of solution. So banks need to “boost engagement” with “increasingly transactional” account-holders, do they? An expression combining the words “no,” “shit” and “Sherlock” comes to mind. And how should this be done? The best the Accenture bloke can do is to suggest that “they should focus on the customer experience, so that across channels, customers receive a fast, efficient service.,”
I’m sure that’s not a bad thing to do, but I can’t see how it’s a formula for “engaging with customers” or “strengthening relationships.” What banks really have to do if they want to achieve these aims is to a) stop behaving like arseholes and b) invest some real, recognisable and distinctive emotion into the way they engage with customers. But are any of the big ones likely to do either of the above? I’m not holding my breath.