Blog
With ever-evolving customer demands, providing exceptional customer experience (CX) has become a key differentiator for financial institutions. While larger banks often dominate the industry conversation, community banks need to recognize the significance of CX and prioritize it in their business strategies.
A Statista survey revealed that 44.5% of organizations worldwide consider customer experience the primary factor differentiating them from their competitors. And 45% believe AI solutions will reshape their customer experience in the next five years.
Let’s delve into why community banks and other financial institutions should care about customer experience and how it can drive growth and success.
Acquiring New Customers
In an increasingly crowded banking market, acquiring new customers is a constant challenge. Customers expect a seamless, convenient, and personalized experience. Offering a great digital banking experience appeals not just to a younger generation but all generations alike.
A positive CX can serve as a powerful magnet for attracting prospective customers. A survey conducted by Salesforce revealed that 67% of consumers say CX is more important than price when making a purchase. Community banks that prioritize CX can differentiate themselves by offering personalized attention, streamlined processes, and innovative digital solutions.
Nurturing Customer Advocacy
Satisfied customers can become powerful advocates for a bank’s brand. According to the Nielsen Trust in Advertising report, 88% of consumers trust recommendations from friends and family over all other forms of marketing. McKinsey & Co reports that 82% of Gen-Z are more likely to use products recommended by their family and friends.
Community banks can create a positive word-of-mouth effect by prioritizing CX, increasing referrals and organic growth. Satisfied customers will likely share their positive experiences with others, amplifying the bank’s reputation and attracting new customers.
Building Trust and Credibility
Forrester’s survey revealed that customer trust was relatively weak in US financial services firms in 2022. Only 2% of brands demonstrated strength, while 57% were classified as ‘weak’.
By delivering exceptional CX, banks can build customer trust and credibility. Offering transparent services, ensuring data security, and providing responsive and empathetic customer support can instill confidence and strengthen the reputation of these banks within their communities.
Retaining Existing Customers
Customer retention is vital for the sustainability and growth of any bank. Providing personalized services, proactive communication, and efficient problem resolution are ways to gain your customers’ trust and decrease the chance of their switching to competitors. By prioritizing CX, community banks can enhance customer satisfaction, build confidence, and foster long-term relationships.
Final Thoughts
Typically, community banks face resource constraints compared to their larger counterparts. Thus, they can struggle to invest in enhancing customer experience.
However, embracing the virtual banking era and leveraging technology to enhance CX can position community banks as innovative and customer-centric. Invest in CX and unlock growth opportunities, strengthen market position, and thrive in an increasingly competitive banking landscape.
Posted on Jul-14-2021