Elevating Customer Engagement in Banking

Delivering a superior customer experience has become the key goal for nearly every business across almost every industry. The banking industry is no exception.

A recent trend highlighting the importance of customer experience is the drop in customer loyalty. Customer expectations are higher than ever, heightening competition between traditional banks and newer market entrants. This creates a need for banks to stand out and succeed by offering a superior customer experience. That experience starts with customer engagement in banking.

According to a recent Forrester study, only two out of 10 retail banks regularly engage with customers to enhance their experience. The same study found that when retail banks consistently focus on improving the customer experience, they tend to grow more than three times faster than their competitors that do not. Forrester also found that over 70% of retail banks consider digital customer engagement essential for their current success and future growth.¹

The key to customer engagement in banking: understanding the customer

The good news for banks is that when they engage with customers by offering the services and guidance they want, those customers tend to respond with increased loyalty. Research indicates that 54% of customers rely on their banks to help them achieve their financial objectives. Most encouragingly, this same research indicates that 71% of actively engaged customers are likely to stay with their bank for the foreseeable future.²

At the heart of today’s evolving efforts to retain customers and build stronger loyalty are innovative tools that deliver on consumer demand for greater personalization and digital experiences in day-to-day engagement with the bank.

With rising interest rates and more choices in financial services, consumers are actively seeking better rates for savings accounts, loans, and credit products. A 2024 Salesforce survey reveals that 72% of consumers are motivated to switch providers in search of better deals.³ Another report indicates that 50% of banking customers expect personalized offers for tools, products, and services to help them achieve their financial goals.⁴

In response to this trend, banks have an opportunity to go above and beyond to attract and retain customers by focusing on delivering exceptional customer service, innovative product offerings and personalized solutions to prevent customer churn. This requires embracing innovative approaches to engagement. For example, banks can leverage customer engagement services that empower customers to better manage their financial well-being. Such services might include smart tools that provide timely alerts and reminders, enabling customers to avoid delinquency and stay current with their payments.

Strategies for enhancing engagement

Banks aiming to enhance customer engagement can achieve this by utilizing data-driven insights, innovative technologies and customized partner solutions to foster loyalty and long-term trust. Customer engagement strategies should consider the following:

• Omnichannel experience – Banks aim to deliver a seamless, consistent experience across all touchpoints, whether it is a branch, mobile device, online platform, or contact center. Customers should be able to start an interaction on one channel and finish it on another without any friction. Connecting physical and digital touchpoints builds trust, convenience, and loyalty.

• Financial wellness tools and empowerment – Banks can utilize customer engagement services to provide customers with smart financial management tools, including budgeting dashboards, automated savings features, credit score monitoring, and investment advice. Providing customers with real-time insights into their financial health enhances engagement and fosters long-term loyalty.

• Identity protection and security tools – Banks can build trust through proactive identity protection, continuous monitoring and alerts that help customers feel protected and in control.

• Customer education and financial literacy – The bank can engage customers through educational content like webinars, tutorials, and in-app tips that help clarify financial products and promote better decision-making. Educated customers tend to be more confident, satisfied, and more likely to expand their relationship with the bank.

• Personalization through data and analytics – Banks can utilize data to deliver highly personalized recommendations, product offers, and experiences specific to individual life stages, behaviors, and goals. Predictive analytics can forecast needs, such as suggesting mortgage advice when spending and savinghabits indicate a possible interest in homebuying, thus improving relevance and connection. It can also alert customers about savings opportunities. This kind of proactive engagement helps build stronger relationships.

Customer engagement services: the key to driving revenue growth and enduring relationships

At Experian^®, we offer world-class customer engagement services that can enable banks to meet customer expectations and build stronger, long-lasting relationships.

By providing tailored financial services and credit education, banks can help customers reach their financial goals. At the same time, banks can build stronger trust by empowering customers to avoid risks and take action to recover when identity theft occurs. All our solutions can be smoothly integrated into a bank’s existing ecosystem, making it quicker and easier to deliver these services to customers. As banks continue to seek ways to deliver exceptional customer experiences, it is essential to offer innovative tools and services that better engage customers. Customer engagement in banking is crucial for attracting and retaining clients.

When banks go the extra mile to meet the evolving needs of customers, they are repaid with greater loyalty and long-term trust.

¹https://www.kameleoon.com/blog/18-stats-understand-future-cx-optimization-and-banking
²https://www.postgrid.com/customer-engagement-strategies-banking/
³https://www.experian.com/content/dam/marketing/na/thought-leadership/business/documents/infographic-fostering-relationships-to-unlock-growth.pdf
⁴https://www.experian.com/content/dam/marketing/na/thought-leadership/business/documents/infographic-fostering-relationships-to-unlock-growth.pdf