A Modern Perspective on Bank Management
In the last few decades, the banking industry has had to completely reimagine how business is done. Gone are the days when the average customer’s experience topped out at walking into their local branch and opening a savings or checking account. Today’s banking clients demand online services, financial management advice, mortgage options, business loans, and an ability to integrate all of it with a host of third party platforms.
It’s an exciting time to be in bank management, but it’s also extremely complex and competitive. With so many options on the table, financial institutions have to constantly work to develop long-term banking habits.
Banks must prove they can produce the kind of long-term wealth management support, advice, convenience, trust, and security that will keep their clients loyal. It’s a tall order, but with the right bank management strategy, financial institutions can develop relationships that last a lifetime and beyond.
The Challenge of Client Loyalty
The advent of online banking created a fundamental challenge for the traditional brick-and-mortar industry. Digital entrepreneurs realized that, by adopting an online model, banks could save a lot of money on electricity, rent, personnel, and paperwork, and all that extra capital could be used to offer better interest rates and services.
The only question in the equation was whether clients would trust an invisible bank, and it turned out the answer was yes. Today, online banking accounts for nearly a $12 billion market share, and it’s projected to more than double in the next five years.
Moreover, clients are easily teased away from their primary financial institution by online incentives. It’s estimated that this environment is prompting a hidden defection rate of anywhere from 25-51% in addition to above-board choices for one or more services.
This presented an existential crisis for traditional banking, and it prompted a deeper investigation into the importance of “faith” and “trust” for client loyalty.
Identifying What Clients Value
What the online banking craze exposed was, when given a choice, clients tended to prioritize short-term value propositions and ease of conducting transactions over familiarity. This was a shocking revelation, because it had been assumed for decades that a hearty handshake and a familiar face were first and foremost on the client’s mind when they made a deposit.
As it turns out, the last 25 years of bank management has demonstrated that these things are still just as valuable to clients as they’ve ever been. They just can’t be taken for granted anymore.
Developing Modern Banking Strategies
Modern bank management strategies have to revolve around nurturing the banking relationship. Financial institutions need to cultivate their clients’ understanding of wealth management, and online services need to be constantly improved. That means developing digital infrastructure that conveniently meets clients’ needs, and focusing on products and services that foster long-term banking habits.
Digital Infrastructure
Nearly all major financial institutions today feature online banking, and clients’ daily interactions are an opportunity to establish comfort and familiarity. Every time a client defects to another institution, there’s a learning curve with the new platform that can be frustrating to learn. You want your platform to feel easy, intuitive, and make all interactions and transactions quick and accessible.
Furthermore, online interactions should feel personal despite the absence of a real human being. Artificial intelligence can actually help simulate an in-person experience through chatbots that have full access to client profiles and preferences.
All of these systems save on overhead and personnel, and the more your platform feels like home and conveniently meets client needs, the happier they will be to stick with you.
Developing Longevity
Cultivating long-term, trusted relationships with clients means being an important force for good when meaningful financial decisions are being made. Financial institutions should be proactive in identifying and educating clients about wealth-building opportunities, and escort them from one end of the process to the other.
Taking out a mortgage is one of the biggest decisions most people ever make, and banks can take the initiative to inform clients about opportunities and incentives that keeping it in-house can offer. Keeping clients up to date on opportunities to refinance can be beneficial for everyone if rates are low, and it’s a good way to establish trust and confidence that a financial institution is focussed on their individual needs and benefits.
Developing good family finance habits also help promote trust and longevity. Branch associates are in a unique position to introduce topics like opening a savings account for a child, start a college fund, finance a first car, and help with legacy planning.
By getting to know clients and their financial goals better, modern financial institutions can invest in mutually beneficial products and services that generate wealth, build trust, and deepen client relationships.
Connecting the Present with the Future
The Postage is committed to creating bank management strategies that promote client longevity and loyalty. We know that banks are going to be there when a child is born and when a loved one passes, and we want to help your clients rest easy knowing their wealth and wisdom is protected and secure.
The Postage offers a suite of online legacy planning options including will creation, document and data storage, digital lock boxes, and message delivery that bring client and financial institutions closer together.
We believe life planning doesn’t have to be hard. Help your clients begin their journey to a more organized life with The Postage.
