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National Study Shows Shift in Retail Banking Communications Strategies to Meet Rising Consumer Demand for Mobile and Personalized OptionsBanks Still Rely On Direct Mail and Expensive Agents in an Increasingly Digital Era (February 15, 2012)
SEATTLE, WA -- (Marketwire) -- 02/15/12 -- A recent survey of customer communication trends in the U.S. retail banking industry shows that there is a shift in how customers seek and respond to information. Banks are beginning to adjust their priorities to meet consumer demand and focus on consumer engagement through new and better solutions that are more adept at reaching mobile customers, providing self-service options and better aligning communications to customer behavior and preferences to generate higher response rates. Notably, nearly one in four respondents report that developing a competitive mobile and online strategy is anticipated to present one of the greatest challenges to their business over the next two years.
The study, commissioned by Varolii Corporation, a market leader in cross-channel customer interaction management (CIM), surveyed more than 1,000 retail banking executives nationwide in more than 200 organizations on a variety of questions about their interaction strategies with consumers. The survey showed a need to better align with customer behavior and preferences. In fact, only two percent of respondents use text messaging as one of their top vehicles to communicate with customers, even though studies show that 53 percent of consumers prefer text notifications over other channels. Additionally, only four percent of companies say they use smartphone applications as a top communications method and only 11 percent utilize mobile banking.
The research exposes significant opportunities for businesses to optimize and elevate their customer interactions with an approach that leverages cost-effective digital and mobile options to deliver a better customer experience. "Every customer interaction that companies have is an opportunity to build a stronger relationship. With the growing popularity of smartphones, customers expect a more 'connected' experience from the banks they interact with. Customers want extensive self-service options and expect to be engaged through multiple channels like text messaging, email, social media, interactive voice and mobile applications. Banks that are able to provide their customers with these experiences in a coordinated approach, will not only win more new customers and greater market share, but will build lasting relationships with existing customers," said Brian Moore, industry practice manager at Varolii.
Key findings reveal:
- Banks recognize the value of digital solutions but many still rely on traditional outreach methods. Banks recognize the potential cost benefits of using an automated system, but nearly half (45 percent) of banks still use agents to manually call customers on their mobile phones. Additionally, more than 54 percent of respondents still use direct mail to reach customers, despite evidence that direct mail typically has a 2 percent or lower response rate, and more cost-effective digital solutions are available.
- Customer preferences are not yet widely tracked. Many retail banks still fail to track customer interaction preferences when it comes to determining the best approach to interact with customers. Less than half (41 percent) of companies report that they track customer preference data.
- Customers have a growing desire to self-serve. Nearly half of the respondents surveyed (49%) agree that further automating customers communications and giving customers more options to self-serve is both a top customer preference and could drive greater efficiencies in the contact center.
- Banks struggle to distinguish mobile phone numbers, creating a hurdle for the move to texting. The survey found that more than half (54 percent) of companies don't know how many numbers on their contact list are actually mobile phones. Among those who don't currently contact their consumers via mobile devices, nearly one-third say they don't have access to mobile numbers and more than one in four says the technology systems are not in place to reach mobile customers.
"The results of our study show that banks see value in proactive customer engagement and understand that communicating effectively with customers improves the bottom line. It's clear that banks need to evolve to a cross-channel interaction approach to optimally reach their increasingly digital consumers," said Moore. "While many banks are pioneering with social media, there is clearly an opportunity to accelerate the retirement of direct mail and shift that operating expense to increase automated voice, text, and smartphone interactions to deliver better results, a better experience, and reduce overall costs."
Varolii works with leading Fortune 1000 business-to-consumer (B2C) companies, including two of the three largest U.S. banks. Varolii has worked with more than 150 financial services clients to design Interaction workflow applications to enhance customer service, collections, employee communication and contact center strategy. Varolii enables more than 400 organizations to interact with consumers or employees in a smart, personalized and cost effective way with its cross channel, Software-as-a-Service (SaaS) platform -- Varolii Interact.
The 2011 Retail Banking Survey was jointly developed by Varolii, US Banker, Banking Technology News and Lodestar Research. Respondents consisted of more than 1,000 executives from more than 200 organizations around the country. For more information on the 2011 Retail Banking Survey, please download the full report here.
About Varolii Corporation
Varolii is a leading provider of customer interaction management applications. Our cloud-based communication applications help organizations more effectively interact with large numbers of customers and employees through voice, text messages, smartphone applications and email, reducing cost of operations and improving service. The company's flagship capability -- Varolii ID -- enables companies to deliver true 1-to-1 communication on a large scale, achieving better results from fewer notifications. More than 400 companies trust Varolii to manage more than four million interactions every business day. For more information, visit www.varolii.com.
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