Deepen Relationships or It’s Game Over

 Figure 1 – Number of banks and credit unions over time

Figure 1 – Number of banks and credit unions over time

The number of banks and credit unions is shrinking as virtual banking moves customers from local branches to phones, tablets, and PCs.  This shift favors retail banking providers that can deepen customer relationships quickly through the high traffic digital channels, where customers/members increasingly choose to bank.  Why does this shift favor excellence in engagement and cross-selling?  Because customers/members with more products and services are both more profitable and stay longer. 

Take a look at the chart below that plots the characteristics of customers/members at high and low risk of attrition:

 Figure 2 - Machine learning on >50,000 accounts, values listed are the average of the top and bottom 35 accounts as ranked by attrition risk.

Figure 2 - Machine learning on >50,000 accounts, values listed are the average of the top and bottom 35 accounts as ranked by attrition risk.

The plot shows the following common characteristics of customers/members at high risk of attrition:

  1. Few accounts
  2. Few services (e.g. electronic banking, estatements, bill-pay, debit rewards)
  3. Rarely have direct deposit
  4. Low or negative checking balance

So, given banner blindness and an already overwhelming amount of SPAM, how will banking providers ultimately engage with, and deepen relationships with digital banking customers/members?  Because if they don’t, someone else – with a bigger digital advertising budget, will. And if an institution loses too many customers, it’s game-over.

Micronotes is able to engage 20+% of digital banking population in 10-second needs based interviews, monthly, to understand each user’s needs, and formulate exactly the right offer, in real-time – to deepen more relationships and retain more customers/members. And customer/member retention is a matter of profitability for large financial institutions, and life-or-death for community financial institutions. So, give Micronotes a try, it’s free for 30 days and a webmaster can install it in about an hour.