Chances are, you’re not the only bank in your customers’ lives.
Neobanks, fintechs and other nontraditional, often digital-only, financial institutions (FIs) are offering your customers attractive rates, lower fees and a frictionless, convenient online experience.
This leads to silent attrition: a consumer gradually shifting their business away from their primary institution. It’s often described as silent because, by the time the bank notices the decline in business, it’s usually too late to retain that customer.
If not detected and addressed early, silent attrition can have short- and long-term repercussions on your institution, like less effective cross-sell initiatives, plateaued portfolio growth and vulnerable deposit stability. No bank can fully stop silent attrition, but there is a path to drastically decrease it: the path to digital maturity.
Start With Customer Loyalty
Loyalty must be constantly earned, especially as fierce competitors entice customers with advanced technology and affordable services. According to a 2023 Bain & Co. report, neobanks and nontraditional FIs tend to offer more advanced, convenient technology alongside more affordable products and services, both of which are very attractive to consumers across generations. So it’s also imperative to examine what your bank does or doesn’t offer.
While your products and services may be comparable to neobanks, is your digital experience? What about your customer communication strategies? Today’s consumers gravitate to fast, personalized service with minimal friction. One of the best ways to avoid silent attrition seems obvious enough: meet customer demands through tailored offers and smooth experiences.
Unveiling the Numbers
Having an online banking platform is not enough. To meet consumer expectations and outshine the competition, you must establish a robust, relevant and wholly inclusive digital presence.
Insights from the BAI Banking Outlook: 2024 Trends survey emphasizes how customers benchmark their bank’s digital services against their favorite online retailers. The survey also highlights key priorities for the upcoming year with deposit growth leading the way, followed closely by new customer acquisition and enhancing the customer digital experience.
Insights from a recent MeridianLink® survey showcase the expectations of nearly 100 FI customers for 2024. The results indicate that 42% of respondents prioritize the development of seamless omnichannel experiences, while 64% anticipate a reduced role for in-person banking in their daily lives.
These statistics should trigger a sense of urgency and encourage banks to explore the relationship between customer retention, digital maturity and the implementation of an omnichannel banking strategy.
Bank Boldly, Mature Digitally
The transformative journey to digital maturity starts with a robust digital presence and continues to build upon that strong foundation for sustained long-term success.
Here are four essential pillars to help keep your banking strategy bold, your digital experiences mature and your customers engaged and active in their banking journey with you.
1. Seamlessly connect with customers on their preferred platform, meet the needs of newer generations and build a strong competitive edge. Omnichannel banking provides consumers with an integrated experience across all possible touchpoints, including online, in-person, mobile, phone, email and video. Customers can bank how they want and when they want without disruption or information loss.
2. Personalization is one of the most vital components to preventing silent attrition. When banks understand customer behaviors and preferences, they are better prepared to offer customized recommendations, products and support. Utilize data-powered digital solutions for insights into consumer preferences, intelligent cross-selling and tailored services.
3. Speedy processing and underwriting are crucial for gaining a competitive edge and preventing customers from seeking alternatives. Using advanced automation features supported by data can help institutions maximize the impact of their staff, automating tedious, repetitive work and freeing up time to focus on support, proactive problem-solving and the pursuit of high-return initiatives.
4. Expand into new markets and capitalize on your operational excellence. After all, warding off silent attrition is a constant process. When you pair your digitally mature operation with advanced intelligence and demand generation technology, it can help your bank expertly stay on top of your data and execute effective outreach, allowing you to evolve alongside your customers and maintain those hard-won relationships.
Disclosure: The materials available in this article are for informational purposes only and not for the purpose of providing legal advice. You should contact your own advisors with questions regarding the content herein. The opinions expressed in this article are the opinions of the individual authors and may not reflect the opinions of MeridianLink, Inc.
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