Here’s how regional banks can create a loyal customer base

Building loyalty has long been a priority for banks, with lenders seeking out innovative products and services to keep their customers happy. With the advent of digitisation, the process has become even more critical, while also throwing up more challenges for traditional banks that are now being forced to look at changing business retention models.

“Traditional banks need to redesign their business model, and do this quickly, as those who have turned to “digital-only” are already pretty far ahead,” states a new whitepaper by global IT firm Comarch.

“Regardless of very specific product portfolios and sensitivity of collected data, banks have finally realised how beneficial it is to apply all the available modern technologies to individualise each client’s interaction beyond typical banking actions. Again, it seems to be a must-have in an environment where daily face-to-face appointments and discussions are disappearing.

“Digitised players are now gaining a serious competitive advantage by making use of channels millennials are using on a daily basis,” it adds.

The importance of loyalty is well-recorded: according to a KPMG report published earlier this year, in the UAE alone, up to 89 per cent of customers loyal to a brand/company will recommend it to their friends and family, while 45 per cent will not switch even if they have a bad experience.

A big part of building loyalty is creating ‘personalised customer journeys’ – which has so far been more popularly adopted by retailers and other consumer-service providers. While banks must capitalise on the trend to thrive and grow, why have traditional lenders been slow to adapt?

The Comarch report suggests that some of them still perceive digital transformation to be a real challenge in terms of navigating between business ideas, compliance, continuity and finding the right partner.

“What is often missed is thinking of the digital revolution as an opportunity to drive better business results, discover new grounds for growth and to bring back a human aspect to customer experience,” it states. “With the help of new technologies, banks will be able to better respond to their clients’ personal needs.”

With the availability of real-time engines and interactive front-end platforms, relevant customer insights can be turned into personalised financial proposals and engaging digital paths.

“Personalisation in banking is a catalyst to two primary strategic company objectives: increased sales of financial products as well as stronger customer loyalty in the long run,” the report stresses.

The process of personalisation should focus on three main aspects, including relevancy, convenience and a positive brand perception.

“Banks need to match their offers, their support and all the content they deliver with the personal goals of each customer. The further they go in that direction, the better the chances are for them to achieve higher conversion rates,” the report explains.  What customers also expect from a relationship with their bank is to feel secure, informed and guided.

It is also important to ensure that the content is delivered in a way that adapts to the customer’s requirements.

Also, to “ensure a healthy loyal customer database and prevent clients from moving to another bank whenever such an opportunity arises”, lenders need to present offers that go beyond their core products and services, the report adds.

To embark on this process, banks can make use of specific technologies currently in the market to improve customer engagement, raise brand awareness and build stronger relationships with clients. 

For instance, Comarch Loyalty Management (CLM) allows enterprises – including banks and insurance companies – to create and manage loyalty programmes. Supporting both B2C and B2B relationships, CLM utilises the latest artificial intelligence and machine learning mechanisms to help identify behavioural patterns, analyse them and provide personalized offers that are in line with actual preferences. AI/ML engines can be used for fraud detection as well. A promotions designer also helps lenders define segment-specific promotions for every element of a transaction, triggered by transactional and non-transactional  events and behaviours.

CLM helps enterprises offer an improved customer experience, increases loyalty of programme members and is reliable and convenient.

To know more, download the white paper:Personalization of Banking Services via Digital Transformation – How to better understand your clients’ unique needs and effectively drive long-term customer loyalty