Personal touch helps banks satisfy customers

Before revisiting customer acquisition and retention strategies, financial institutions must determine their overall growth strategy and objectives. While banking leaders should consider industry trends, such as a digital-first approach, they should not dictate an institution's strategy for growth.

“Financial institutions may be tempted to compare their approach to that of other peer organizations, but it’s not one-size-fits-all,” said Grant Thornton Growth Advisory Services Principal Tom Joseph.

For example, some banks have recently considered strategies to gain more cost efficiencies by closing some of their physical bank branches and shepherding their customers into their more efficient online banking channels, while others are doing the opposite: opening new branches and growing their geographic footprints with the intent to attract new customers.

Similarly, Joseph added, “Some financial services companies continue to blanket U.S. consumers by mailing credit card applications nationwide, while others focus primarily on serving their current customer base and providing rewards and incentives to cross-serve to that select group, thus increasing their products-per-relationship results. It’s important for each institution to define its own individual approach to growth before determining its customer acquisition strategy.”

Once an institution has determined where to focus its growth efforts, it can begin identifying target customers who align with that strategy. This process involves revisiting who and where their customers are, what motivates them and how their needs and priorities may have evolved over time.

To truly understand target customer priorities, banks must continually build and refresh customer personas. Customer personas represent a financial institution’s current and target customers and are essential to creating personalized, customer-centric experiences. With a focus on targeted enhanced experiences, institutions can improve efficiencies and drive growth across the organization.

“As consumer needs and behaviors shift, banks should revisit the personas they’ve defined for their target customers,” said Grant Thornton Growth Advisory Services Senior Manager Allison Hughes. “Creating accurate personas ensures institutions are leading with targeted marketing, product and customer engagement strategies.”

Building out these personas requires an analysis of the specific nuances of an institution’s customer base, which can include areas of interest such as:

• My financial institution minimizes fraud.
• I enjoy having a personal relationship with my banker.
• I want my bank to prioritize mobile and online banking services.

Many banks struggle to deliver seamless customer experiences due to siloed organizational structures. By leveraging data and analytics effectively, institutions can gain deeper insights into their customers to personalize interactions and foster stronger relationships.

“Data can help banking leaders understand customer emotions and opinions, and guide business decisions to improve the customer experience,” Hughes said.

Data analytics tools assess key demographic data such as a customer’s location, income level, education and age, providing insights that inform teams about what customers may be seeking at key stages in their journey. These tools also compile insights from a customer’s interactions within a bank’s mobile app or website, their engagement with specific products and their customer service interaction history.

When developing their customer strategies, banks must be aware of potential risks — ranging from cybersecurity threats to regulatory compliance issues — that can affect both the customer experience and the bank’s reputation.

The increase in fintech-bank partnerships, for example, may boost regulatory exposure and scrutiny. While proactive partnerships enhance customer experiences, fintech companies often lack proper oversight and control. A dedicated approach to third-party risk management, with the support of the internal audit function, is necessary to protect customers from harm and safeguard a financial institution’s reputation.

Fostering a proactive, risk-aware culture across teams is also critical for risk management. As banks develop and share their customer strategies with cross-functional and consumer-facing teams, they should ensure those teams are trained on regulatory compliance priorities and understand how they may influence customer acquisition and retention activities.