Consumers do not believe their banks treat them as individuals and want their banks to understand them better, according to the results of a new consumer banking survey conducted by Belgium-based data analytics firm NGDATA. Millennials - remember them? - in particular have high expectations from their banks that are going unmet.
The in-depth survey of more than 1,000 U.S. consumers assessed their experiences with banks, examining their views on loyalty, channels through which they interact with financial institutions and their banks’ level of customer understanding. Key highlights from the survey:
Future business is at risk: There is a significant correlation between age and satisfaction, with 51% of respondents aged 18-34 saying they’d be happier if their banks understood them better compared to just 27% of those aged 35+. As older customers continue to be replaced by younger ones, demand for individual understanding will only increase.
Segmentation isn’t enough: Customers want individual attention; less than 30% of consumers believe that offers from their banks are customized for their individual needs.
The high price of bad service and high fees: Nothing will drive a banking customer away faster than high costs and fees, with 41% listing this as the primary reason they would leave their bank, but customer service is a close second at 33%.
Customers are branching out: Only one in five customers (and 14% of those aged 18-35) care about where their bank is located, but 32% cited easy-to-use online services as the most important factor when interacting with their bank.
Banks have lost consumer trust: Banks have long been seen as a trusted advisor, but consumers no longer think their banks understand them. When asked which service provider understands them the best, only 15% of respondents said their bank while 17% said Google. Forty-two percent of respondents don’t believe that any service provider understands them, creating an opportunity for banks to distinguish themselves moving forward.
Money quote from NGDATA CEO Luc Burgelman:
“This research demonstrates a clear trend – the world is moving toward more customized, personal interactions between businesses and their customers. Consumers are no longer content with being lumped in with demographic segments and receiving offers that don’t apply to them. Younger consumers – those who have grown up in a world where Netflix anticipates what they want to watch and Google knows what they want to find before they finish typing in a search term – represent a new and very real challenge to bankers, who will be tasked with generating a customized and personal experience for every customer. Banks have a massive amount of consumer data at their disposal. The time has come to use that data to create a better experience for their customers.”
Well said, Mr. Burgelman. Download the full survey report here.