Australian banks lack confidence in loyalty insight
Younger, smarter banking customers with a desire for greater digital interaction and online engagement are challenging banks in Australia to deliver more personalised, value-added services with greater efficiency and precision, according to a report by the Chief Marketing Officer (CMO) Council.
According to the report, entitled 'What's Critical in the Vertical: A Look At Banking In Australia', only 15% of marketers in Australia's Aus$2.5 trillion banking sector feel confident that they have a sufficient insights into customer profitability, value and retention.
Unmet service expectations, interest in mobile and online banking, as well as the need for more financial advice and help are all top of mind with consumers who have become increasingly wary of hidden banking costs and fees. There are more than 17 million customers served by nearly 60 banks in Australia.
The study found that, while bank customers want new, digitally driven engagement options, they are also demanding higher levels of personalised service, without the fees or premiums one might expect for this features. According to the 1,270 consumers surveyed, banking relationships are under strain from hidden or soaring fees without additional value or service, not the lack of perks, programmes or online access.
"Customers want an intimate, individualised experience that one might find in a high-street boutique, but they are not willing to pay higher fees in order to enjoy it," said Donovan Neale-May, executive director for the CMO Council. "As customer budgets and spending become more frugal and prudent, new financial management tools, reports and analytics associated with fiscal wellbeing and better business operation are going to be real differentiators for bank brands. This will also give banks better credit risk management and the ability to cross-sell products and process loans faster, Neale-May added."
Top of mind for consumers are paying bills on time (71%), saving or investing for the future (57%), or simply making ends meet (50%). Fewer consumers were concerned with juggling online accounts (10%) or consolidating accounts (9%).
At the same time, the CMO Council also surveyed 113 bank marketers in Australia. In general, they report that they are being pressured to improve their wallet share, as 51% of those surveyed are being pressured to develop more effective retention marketing campaigns in order to secure the loyalty (and accounts) of current customers.
While personalisation is a key tactic for some (24%), marketers are looking to further leverage customer data to better segment, target and message to customers, while also identifying ways to help depositors save, invest or manage money.
"Marketing is spending on the development of online, self-service channels, as well as more convenient ecommerce-enabled access points in an effort to make online banking easier. Yet the customer is openly asking for financial insight, advice and personal service as return for their loyalty," said Lee Gallagher, director of precision marketing for report sponsor InfoPrint Solutions. "Banks must do more to advance precision marketing practices and, in so doing, help drive relevance, response and revenue. Without more relevance and context in communication, there'll be greater defection in a more competitive bank market."
According to marketing respondents, primary customer pain-points include poor customer service surrounding queries or problems (52%); increases in cost, charges and fees (48%); and a lack of convenient branch locations within a reasonable distance to home or work (36%).
In contrast, customer issues include high fees and unexplained costs (41%); billing errors (39%); and higher or even hidden fees for in-person service (34%). What is interesting is that customers are more irritated by spam and junk mail (18%) than they are by a lack of paperless or e-statements (6%) or even limited access to online account information (8%).
The report has been made available for free download from the CMO Council web site - click here (free registration required).
