The Customer Retention Strategy
Small and mid-sized banks have traditionally focused on a community-based banking approach, often engaging with their retail customers by grouping them based on their post-code to understand them better.
However, this segment of banks has struggled in keeping up with technology trends and they may be unable to meet the expectations of some of their digitally savvy customers.
While banks, such as the UK-based Nationwide or Sparda Banks in Germany, have invested massively in a long-term digital transformation initiative, many of the smaller banks are unable to do so.
The customer retention strategy then, that many are adopting or thinking of, is to focus on specialisation and technology outsourcing.
User experience is the overarching focus for all segments. For the mid-sized and small banks, digitalisation and technology overhaul of their systems is an expensive affair; many are looking at platform-as-a-service providers and software-as-a-service solutions which are cost-effective ways to improve their service delivery and modernise their technology infrastructure