How to improve customer relationships in banking

There is no one simple magic trick to ensure strong relationships with your customers. Customer expectations have evolved to such an extent that they look for a well rounded service across all customer touchpoints and interactions with your bank.

And this really can be tricky for financial institutions to achieve as it impacts all kinds of banking services. From the financial products to the quality of the service to personalized offers and even physical branch visits, there needs to be consistency across a huge number of areas.

Why are customer relationships important?

One of the most damaging failings when it comes to customer relationship management is a loss of trust. In the US, customer feedback points to an increase in “fear, mistrust and even apathy,” particularly when it comes to sharing personal information online or the risk of fraud.

For customers, there is a huge amount of confusion surrounding their personal data and how it’s being used. This makes it difficult to maintain the security of their identity and guard against undefined but looming cyber threats.

The reason this is important is because for any relationship to flourish there needs to be a foundation of trust. Before we get into the quality of customer service or providing a smooth omnichannel customer experience, there must be a strong feeling of trust.

The benefits of customer relationships

However, once these key elements are in place – and the bank has an exceptional customer service model in place – the benefits of increasing customer satisfaction are wide ranging.

Not only does it foster a deep sense of trust and loyalty, which in turn reduces churn rates, but it also allows banks and credit unions to offer more relevant products and services to their customers. This can increase the customer lifetime value and boost loyalty – as well as digital sales.

What’s more, the positive impact of strong customer satisfaction goes beyond the individual as a strong recommendation will bring others to the bank.

So, what must organizations in the banking industry do to increase engagement and drive customer loyalty?

Secure organizational foundation

A top organizational foundation must cover everything from customer security and data control to following regulatory practices. The fact is that your financial solutions institution must both look and actually be highly secure and above board in all matters.

In such a highly regulated environment as the financial services industry, this should be par for the course. And yet the EU watchdog in Brussels found that there were “irregularities worth €1.77 billion in 2022” across the EU, which was a 7% increase from 2021.

Since then, there has been a decrease in credit card fraud – but only because criminals are finding more success elsewhere. In 2023, there was a notable increase in social engineering attacks, which are more frightening in a way as they target individuals rather than technological weaknesses.

Not only do attacks like this, where bad actors confuse customers and trick them into parting with their money, have financial repercussions, but the impact on customer trust is even greater. How do the customers know they can trust you?

The importance of education

Competitive product offerings

With security measures in place, the next area that customers look out for is the quality and competitiveness of your product offerings.

Beyond this, they also want plenty of options for different products – such as pension plans to suit different stages of life and risk levels – as well as a demonstration of trustworthiness and authenticity.

Online and digital experiences

Internet banking and mobile banking have long passed from being nice-to-haves to being a fundamental prerequisite for customer satisfaction. Mobile banking apps became the most frequently used touchpoint in 2021 and their popularity has only increased since then.

And this increasingly includes being available for customer service requests on mobile native support channels. Overall, mobile banking is exceptionally important for retail banks, offering valuable insights and more upsell opportunities among other benefits.

In-person branch options

The world is certainly digital, but that doesn’t mean that people have entirely forsaken bank branches. As Forbes puts it, “Face-to-face interaction plays an important role in the banking relationship. Despite the cost savings that came with replacing physical banking channels with digital platforms, banks sacrificed building customer relationships in the process.”

This is something that needs to be put right. But simply sticking with a failing branch network model isn’t the answer. Instead, to offer the customer base the service they need in a cost-effective way, banks need to rethink how they approach branch banking.

 In other words, they need to embrace hybrid branches. These new types of branches have been shown to not only cut costs but offer opportunities for expansion and increased profitability – while also improving customer satisfaction.

Superior customer service

Of course, across all touchpoints, whether in-person, on the mobile banking app, or anywhere else, the quality of the customer service experience needs to be consistent and always excellent.

In other instances, a personalized service does mean talking to a human agent. When this happens, customers need to know that they can get access to exceptional service at a moment’s notice. 

At all points, the customer interactions need to mimic the customer requests to ensure a superior customer experience. This is only possible through a digital customer interaction platform that provides self-service options alongside a 360-degree view for the agent to ensure a personal touch at all times.

Take a customer-centric approach with Unblu

The banking journey that customers go on need to align at every moment, offering a consistent experience across a wide range of touchpoints to ensure the right quality of service. 

The mix of human interaction and online experiences needs to be exceptional to promote customer engagement and offer positive customer experiences. 

By achieving excellent customer service and improving customer ratings, banks will increase customer retention rates and customer satisfaction scores, which translates to more business opportunities for banks.