How Banks Can Move Beyond Transactional Relationships

September 12, 2022   -   ,

Beyond Transactional Relationships

Digital banking has become ubiquitous among financial institutions. The convenience offered to customers is undeniable–they can easily pay bills, transfer money, and apply for loans (among other benefits) wherever and whenever. But this shift does come with major drawbacks, specifically a reduced focus on personal relationships. 

Even the broadest range of online services can’t replace a personal bond between your organization and the people doing business with you. In the end, managing money is about people. The real, live human beings in the communities your bank serves should be the reason your institution exists in the first place, right? In fact, a recent survey found that over 70% of customers who are engaged regularly will stay with their current bank for the rest of their life. 

So, how can you effectively convey that message to your clientele? In this article, we dive into why transactional relationships with customers are detrimental to financial institutions and how to begin building meaningful relationships again. 

The Importance of Personal Relationships with Customers

The COVID-19 pandemic transformed society in many ways, but it also demonstrated how important the human touch is in everyday life. Authenticity, transparency, and trust are the new business model, and it’s especially appealing to younger demographics. When that Starbucks barista writes your name on your coffee cup, even when it’s misspelled, that little personal touch transforms a transaction with a business into an interaction with another human being.

There’s solid research backing the argument, too: 86% of consumers say their experience with a business is just as important as the product or service itself. While banking, by nature, largely focuses on individual transactions–deposits, withdrawals, transfers, and the like—building customer loyalty and trust means prioritizing a concept known as “relationship banking.” 

Relationship banking doesn’t replace transactional banking. It supplements it. The notion describes the personal side of running a bank: the process of getting to know the people who do business with your institution and taking the time to understand their financial needs. When your institution is able to deliver both human connections and reliable financial services, long-term relationships with customers will naturally grow.

How to Foster Meaningful Relationships 

While building meaningful online and offline connections is pivotal in today’s business landscape, accomplishing this goal is easier said than done. The good news is that there are countless ways to get started. Relationship-savvy banks might offer:

  • Financial education. No matter where a bank is located, it’s never far from new business owners and others who could benefit from financial knowledge. With digital and real-world training sessions, you can help these entrepreneurs while introducing them to your services.
  • Money management advice. Education isn’t the only way a bank can support local businesses. Your institution can also form a partnership with companies that are rooted in their communities, and provide them with guidance on financial management.
  • Wealth management. This is closely related to the service described above, but with one key difference–it focuses on managing personal wealth instead of a business’s resources. 
  • Estate planning. Naturally, it’s difficult for people to think about what will happen after they pass, but making plans for your legacy is essential. By offering services related to estate planning, your bank can guide people through this sensitive process.
  • Waived fees. Not everyone can afford fees associated with financial services, and banks that prioritize relationships understand that. If an institution can waive fees here and there for its customers, that small gesture goes a long way toward showing a bank’s human side.
  • Real customer service. Nothing frustrates customers more than not being able to easily and quickly resolve problems. One of the biggest mistakes a bank can make is forcing clients to sit on hold for hours, listening to a robot. Make sure that when customers call your bank, they’re able to reach warm, friendly, human voices, not machines. 

A Customer-Centric Solution

While focusing too closely on digital banking can undermine customer relationships, a successful institution shouldn’t have to choose between genuinely connecting with its clients or merely getting by with transactional relationships. Deep, meaningful connections should drive the digital services created with real peoples’ needs in mind. 

The Postage is proud to offer online life planning services crafted with a personal touch. While these services enable people to prepare a complete will in mere minutes, they also let customers include personalized messages and special memories for their loved ones. 

Along the way, clients using these services will deepen their existing emotional relationships with your bank. When customers feel valued, they begin to see your financial institution as a partner in their life planning process instead of just an impersonal place where they take care of deposits and withdrawals.

Take the first step towards giving your clients meaningful access to convenient and fulfilling will, estate, and legacy planning services. 

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