Until recently, customers were loyal to financial services (finserv) institutions from childhood all the way to retirement. But in today's fast-paced, tech-driven landscape, that's simply no longer the case. With more fintech disruptors joining the financial sector, digitally-savvy customers have more choice than ever at their fingertips — and they're searching for the best deals. This leaves the entire finserv industry – the banks, investment firms, insurance and credit card companies – competing to attract and retain customers.
According to recent research from Ernst & Young, Asia-Pacific banks, in particular, are falling short on customer loyalty: 63% of survey respondents say they have more than one product outside their main bank. And many of the more than 4,700 retail banking customers across the region that were surveyed admitted to feeling unappreciated, unrecognised and under-rewarded by their main bank.
Therein lies the opportunity. Customers want something more than transactional. They want a one-to-one relationship with their financial partners. And with the right strategy – one that engages customers and encourages them to willingly share their personal information (first- and zero-party data) in return for real value, like offers, rewards and a more personal relationship with your brand (the value exchange) – creating relationships that inspire loyalty in the finserv space is well within reach.
Customers want a more meaningful connection with their financial institution
Payment organisation PSCU, in its '2021 Eye on Payments' study, found nearly eight out of 10 survey respondents agree or completely agree that they want to do business with a financial institution that knows them personally. This sentiment is echoed in Cheetah Digital's 2022 Consumer Trends Index, which reveals a 110% increase year-over-year among APAC consumers who want to be treated as an individual. They want more personalised messages based on their own individual wants and needs. Unfortunately, only 27% feel like their brands truly understand them, creating a huge gap.
This explains the explosive increase in virtual banks and hyper-personalised banking. They don't have their hands tied with bureaucracy and can move at a fast pace when releasing new and improved products to the market – all while offering the convenience tech-savvy consumers demand.
According to McKinsey, APAC consumers are over the in-person, teller experience of legacy banks. Approximately 97% of APAC consumers either consider the digital channel the best of several ways to interact with their bank or use it as one of several channels in a multichannel or omnichannel offering. By contrast, only 2% of consumers in developed APAC and 3% in emerging APAC continue to conduct most of their bank business at the branch.
Finserv customer challenges and opportunities
Whether it's a lack of trust or an absence of enthusiasm, finserv institutions face more than a few challenges on their way to building loyalty with customers. These industry-specific obstacles are precisely why it's important that brands take advantage of every opportunity to strengthen connections. According to the same Ernst & Young research, nearly 80% of respondents indicated they would value a loyalty program from their financial institutions.
However, before implementing a full-blown loyalty program, it's vital finserv institutions start building stronger relationships with their customers first. And an effective way to do that is with experiential marketing — the use of experiences to market a product or service. The success of these campaigns comes down to a few key components of the experiences they create.
Create value for everyone
To inspire loyalty with current and potential customers, experiential marketing needs to include opportunities with real value. In recent years, many financial institutions have taken a very different experiential approach by helping customers improve their financial health.
Be exclusive and inclusive
Consumers expect to be rewarded for their spending, so what better way than with unique, personalised experiences? When it comes to exclusive experiences, few do it better than American Express. From early access to tickets for concerts, sporting events and theatre to just about everything else imaginable, Amex hooks its customers up with the perks.
Regardless of the approach, finding ways to connect with customers in a way that's valuable to them is a surefire way to create loyalty.
Maintain a personal touch
At the same time, smaller gestures to build trust – and ultimately, loyalty – can have as much impact as big, bold, exclusive experiences within financial services. Personal connections with customers can be as simple as a thank you. Of course, special rates, discounts and bonus points for loyalty also work well.
Time to transform
From loyalty cards and cashback offers to discounts, upgrades and even free nights and flights for loyal credit card users, the finserv world is full of opportunities to inspire loyalty — but few pack the same punch as experiences that delight, motivate and deliver real value for consumers. By creating memorable moments for customers and potential customers; banks, credit unions, credit card companies and other financial services brands can create connections that last.
