The Customer Retention Strategy
The customer retention strategy for this segment has primarily focused on improving customer stickiness by enhancing the user experience.
Large banks have been investing heavily in improving their front-end internet and mobile banking applications to enhance the customer experience and bring it on par with the user experience offered by competitors, including challenger banks. Many have been struggling with the transition.
In the UK, bank customers faced misery as the Royal Bank of Scotland, Barclays and the Co-op Bank mobilised their banking services, but then left millions without online access to their accounts. Barclays and Co-op Bank fixed their own computer outages while RBS admitted to issues with its online services and had to tell the 5.5 million users of its mobile app to use its telephone banking or cash machines instead.
However, for those banks that have managed to tide over such transitional challenges, their mobile and digital banking applications are noted to be on par with their challenger bank counterparts in terms of functionality.
Banks are also looking to optimise the omnichannel experience by digitalising their branches. Some of the large banks such as Lloyds, Barclays and Caixa Bank have set up coffee shops and co-working spaces in their high street branches to foster face to face connections with customers, especially the millennial population.
While banks continue to maintain loyalty reward programs, they have been struggling, due to the cost pressure on them at a time when bank profit margins are low.
Customer feedback is being regularly measured now with NPS as the preferred choice of measurement. Many are looking instead, to partner with fintechs and third-party providers through APIs to provide a better user experience. But the critical success factor for this endeavour will be to get their technology infrastructure in place and API ready.