What Are Some Steps for Building a Good Customer Relationship in Banking?

July 16, 2024   -  

Good Customer Relationship

These days, customer loyalty to banks isn’t always what it used to be. In Q1 2024, 32% of bank account holders were willing to change their primary bank on a moment’s notice—up from 16% in the first half of 2019. This is just one of many statistics that paint a sobering picture for the financial industry: if institutions want to sustain long-term banking relationships, they’re going to have to take a holistic approach to nurturing customer loyalty. 

The problem is compounded because younger people don’t necessarily trust established strategies for financial success to deliver future security. Whether it’s investing in real estate, crypto, or casually switching high-yield savings accounts, banks aren’t automatically granted a voice in the wealth conversation. Tomorrow’s customers need to be given concrete reasons to make institutions trusted partners in their wealth-building process, and that means taking a proactive approach with messaging, products, and services. 

So, what are some steps for building a good customer relationship in banking that the next generation can buy into for the long haul? Here’s an in-depth walkthrough to creating customer relationships that extend from one generation to the next—and how to benefit right alongside them as they flourish. 

1. The Beginning as a Bridge

Connecting with the next generation starts with welcoming the children of your existing customers into financial life. Deposit accounts are where many young people start developing financial literacy, but in 2022, only 39% of US children between the ages of 8 and 14 had a savings account. 

Also, while this may be the beginning for a young person, your bank is in a position to contextualize it as part of a larger wealth-building conversation that’s already underway. Parents and grandparents are engaged in legacy planning activities, including college tuition, trust funds, real estate, investment portfolios, and a variety of other products and services that lead to share of wallet for your bank. 

Use these opportunities to provide as much value and advice to family members as possible, and deepen both financial and emotional ties to your institution. That’s the foundation for building a multi-generational bridge that places your bank at the center of success. 

2. Thinking About College

College and trust funds also enter the conversation as children grow. Most families start around 7 years old if they do it at all, but only 40% of their money is going into college-specific banking products. 

Rather than fighting the trend, this represents an opportunity to open a more serious and complex conversation about how your institution can help them achieve success by leveraging all the services at your disposal. 

Whether it’s deposit accounts, investment guidance, real estate, or tax support, all of these options build financial literacy, wisdom, and institutional trust that can be passed down to their children. Each one contributes to deeper customer ties, especially as your services deliver greater financial success. 

3. Providing Home Mortgage Loans

For the average person, buying a home will be the single biggest purchase of their life. And with home prices hitting a record high in 2024, real estate is an increasingly attractive repository for wealth. 

At the same time, a house is a valuable asset and the cornerstone of a multi-generational wealth-building strategy. Particularly for community banks, houses tie wealth to a geographical location that is best managed by trusted local institutions. Real estate also forms the basis of long-term conversations about where and how wealth will be allocated as part of a legacy or succession planning strategy. 

These conversations often involve parents and their children, and it can be difficult to coordinate and organize plans surrounding major assets without help. Relationship-driven fintech solutions like The Postage make it much easier for families to share valuable information and promote discussions about wealth-building with a digital platform that’s intuitive and secure. This puts banks in a position to recoup a huge return on the investment with a service line that connects siloed departments like trusts and mortgages and develops no-interest income and deposit growth. 

All of these factors are part of building durable banking relationships with clients and their heirs and lead to increased non-interest deposits and share of wallet.  

4. Offering Investment Management Services

Today, the majority of Americans understand the importance of investing as part of an overall financial strategy—64% of US families now own stocks of some kind. Even so, the thought of creating an investment portfolio or retirement account can be intimidating to people who don’t already have investing experience.

Because of that, your bank should help introduce all your clients and their family members to prudent investment strategies and services. By helping people understand their financial situation and sharing powerful investment opportunities, you can empower them to make informed monetary decisions for the rest of their lives while arming them with valuable knowledge and banking habits they can pass on to their children. 

5. Restarting the Cycle

All of these processes lead to the building of wealth that is viewed in a multi-generational context and places your institution at the center of the conversation. The result is financial relationships that are cyclical, not finite, and with over $72 billion being passed down to Millennials and Gen Zers over the next 25 years, there’s never been more pressure to develop long-term banking habits and customer loyalty. 

As the current generation of parents and grandparents transfers wealth to their children, those beneficiaries will be equipped with the financial knowledge, context, and strategies to begin the process with their children—and your bank will be perfectly positioned to help. Additionally, they’ll have a head start because of your bank’s investment in their financial literacy, and be more inclined to trust you for future advice. 

By making your clients successful with services that cultivate meaningful long-term relationships, you will be positioned to celebrate and benefit from that success along with them every step of the way. 

Why Choose The Postage?

As you can see, your bank must be ready to provide all kinds of services throughout a customer’s lifetime. Still, everything comes back to life planning services: these services are the key to building relationships between your bank and its existing customers, along with bringing in members of future generations.

If your bank can’t offer these services on its own, it needs the help of a secure, intuitive platform that makes it easy to coordinate family wealth building—and that’s exactly what The Postage has to offer. Some of the most prominent perks that come with our solution include:

New Ways to Stand Out

When your bank starts working with The Postage, you can introduce life planning services like will creation and digital storage for essential documents that develop organic platform-based connections with family members through sharing. Since most banks don’t already offer these services to their customers, our platform can organically differentiate your financial institution from its competitors.

Serious Financial Benefits

Collaborating with The Postage can increase banks’ annual return on investment by more than 700%. Along with that, our platform can drive growth by unlocking $1.2 million through familial connections by creating over 1,600 new beneficiaries/familial connections per year.

Stronger Relationships With Customers

The benefits of working with us go far beyond improving your financial institution’s bottom line. Our platform is also inherently relationship-driven, which means you’ll never be at risk of failing to connect with your customers beyond the transactional level. Instead, you’ll be there for these people at their most important moments.

If you’ve been having questions such as “What are some steps for building a good customer relationship?” and “How can my bank better serve its clients?”, you’re beginning to understand the strategies that will carry your institution to future success. The Postage’s life organization platform delivers planning for the entire span of life and allows for comprehensive family engagement through sharing memories and storing important documents. Find out how its intuitive digital platform can help drive your business goals and create customer relationships that last a lifetime and beyond. Take the next step by scheduling a demo today!