We can all agree that a lot has changed in the last two years. The universal push toward “digital everything” in a variety of industries introduced people to a broader range of options than ever before — and not just in banking. This exposed issues around privacy, personalization and technology preference and accessibility.
As a result, there is a renewed sense of the ability to change the status quo and the “way we’ve always done it” mentality. People realize they have options and flexibility. While deep in deposits, most financial institutions saw record deposit and account growth.
As economic uncertainty continues, banks and credit unions must be diligent in retaining deposits as customers part with their money on an increasingly growing scale. We recommend keeping it basic and using a three-pronged approach: Attract, Grow, and Retain.
Attract New Customers to Your Financial Institution
Growing deposits start with attracting new customers to your bank or credit union. However, doing so will take an updated strategy. To keep your institution’s marketing relevant in an unstable market, you’ll need to:
- Make an effort to use multiple marketing channels. By engaging with various outlets, you’ll make sure your financial institution has a presence where your customers are. Use data and analytics to construct an informed omnichannel approach.
- Add value through relevancy. With so much noise in the industry and so many companies competing with similar products, you can differentiate your offerings through relevant advertising. Make sure your message makes sense in context and provides valuable information.
- Stay on top of trends. Make an effort to deliver the information and types of content people need and expect. As technology shifts and consumer habits evolve, an eye toward proactivity will help your financial institution be agile enough to meet those demands.
- Keep it simple. Have you tried to open an account through your online account opening platform? If not, give it a go. People are used to the ease of Amazon® and other, apps. If an account can’t be opened in just a few clicks and minutes, you’ll want to reevaluate your process.
Grow Deposit Balances from Existing Customers
We all know the cost to acquire exceeds the cost to retain, making it measurably important to never take the needs of your existing customer base for granted, or risk losing them to the competition. An effective strategy to deepen existing relationships is to identify low-service customers and aggressively cross-sell new financial products and services to them.
In addition, easy access and strong customer service can help with retention, but you may want to take a generational approach to engaging customers. For instance, educate younger segments on the value of saving (a challenge for this generation) — and show them how. You may also want to explore the introduction of rewards programs or offering services like free checking — these are strong incentives for younger generations. And for your more mature demographics, encourage customers to consolidate and centrally manage their financial assets.
Retain Your Most At-Risk Customers
Change events tend to threaten long-term loyalty. Financial institutions can reduce attrition and grow revenue through personalized messages, consistent branding, and enhanced customer service. While many banking customers value automated and online self-service options, more than 80 percent want live human-to-human interaction when dealing with an important issue, while 22 percent of millennials and 20 percent of GenX is likely to switch from their current financial institution to another within the next 12 to 24 months.
Connecting with at-risk customers through lifestyle-based messaging (and not product-specific messaging) has proven to be an effective strategy. Also, the importance of delivering a frictionless customer experience and making it easy to work with your institution cannot be overemphasized. Even the most stable and connected customers will consider leaving after a bad experience.
Growing Your Financial Institution’s Deposits
There’s a science behind every approach. If you want to attract, grow and retain high-value customers, you must be able to engage them on their terms and meet their preferences. For instance, the Vericast 2022 Financial Services TrendWatch report found that incentives and deals are the number one way to influence millennials and GenX to switch financial institutions. You may be able to grow your bank’s deposits by offering those demographics special perks or positioning your marketing to highlight the incentives you offer. If you can meet the needs and preferences of would-be customers successfully, you become the resource they turn to again and again for deposits and loans.
Not surprisingly, effective loan marketing strategies parallel those of deposit acquisition: acquire, grow, and retain. Sending the right offer to the right customer at the right time increases the likelihood of a response.
Set your financial institution up for success. Read our 2022 Financial Services TrendWatch report to learn more about the current trends in the banking industry or download our Essential Guide to Deposit Acquisition for more information on growing deposits among disrupted customers.