Customers value seamless, tailored experiences
Consumers today are banking everywhere, not just in one physical — or virtual — location. With the rise of digital banking options from fintech companies and tech giants, many customers work with upwards of five different institutions to meet their various financial needs. But no matter where they’re banking, they prefer seamless and tailored experiences to draw them in and keep them coming back.
“Consumers expect frictionless interactions with their financial institution. When banks can provide personalized experiences, they drive growth by attracting and retaining customers for the long term,” said Grant Thornton Banking Industry Leader Graham Tasman.
To maximize growth in this competitive landscape, financial institutions are re-evaluating their customer strategies. They want to better identify exactly who their customers are today and how they may evolve in the future. By reassessing their acquisition and retention strategies, institutions can work to stand out from the growing list of competitors, offer experiences that invite customers on a personalized journey and, ultimately, build customer loyalty for life.
Align with growth strategy
Before revisiting customer acquisition and retention strategies, financial institutions must determine their overall growth strategy and objectives. While banking leaders should consider industry trends, such as a digital-first approach, they should not dictate an institution's strategy for growth.
“Financial institutions may be tempted to compare their approach to that of other peer organizations, but it’s not one-size-fits-all,” said Grant Thornton Growth Advisory Services Principal Tom Joseph.
For example, some banks have recently considered strategies to gain more cost efficiencies by closing some of their physical bank branches and shepherding their customers into their more efficient online banking channels, while others are doing the opposite: opening new branches and growing their geographic footprints with the intent to attract new customers.
Similarly, Joseph added, “Some financial services companies continue to blanket U.S. consumers by mailing credit card applications nationwide, while others focus primarily on serving their current customer base and providing rewards and incentives to cross-serve to that select group, thus increasing their products-per-relationship results. It’s important for each institution to define its own individual approach to growth before determining its customer acquisition strategy.”
Once an institution has determined where to focus its growth efforts, it can begin identifying target customers who align with that strategy. This process involves revisiting who and where their customers are, what motivates them and how their needs and priorities may have evolved over time.
More customer strategy industry insights
Revisit customer needs
To truly understand target customer priorities, banks must continually build and refresh customer personas. Customer personas represent a financial institution’s current and target customers and are essential to creating personalized, customer-centric experiences. With a focus on targeted enhanced experiences, institutions can improve efficiencies and drive growth across the organization.
“As consumer needs and behaviors shift, banks should revisit the personas they’ve defined for their target customers,” said Grant Thornton Growth Advisory Services Senior Manager Allison Hughes. “Creating accurate personas ensures institutions are leading with targeted marketing, product and customer engagement strategies.”
Building out these personas requires an analysis of the specific nuances of an institution’s customer base, which can include areas of interest such as:
- My financial institution minimizes fraud.
- I enjoy having a personal relationship with my banker.
- I want my bank to prioritize mobile and online banking services.
Example banking customer persona descriptions
- College Carol: A 21-year-old college student interested in opening her first credit card account. She wants to begin building credit before she graduates and is interested in learning more about best practices for credit card management.
- Mortgage Martin: A 29-year-old professional living in the Pacific Northwest. He has been focused on saving up to buy his first home, with the intent to buy in the next year. He’s interested in learning about mortgage and lending products, as well as how to best manage his assets as he prepares for this purchase among other expenses.
- Techy Tom: A 42-year-old IT manager who prefers to do his banking digitally. He values banking solutions that work with all his other fintech apps and wants to optimize his time while ensuring his data and finances are secure.
Once customer personas are identified, financial institutions can map individual customers to a persona and track how their persona alignment evolves throughout their financial journey.
“Banking customers are unique because, over time, their needs change, often leading them to align with different customer personas,” Hughes said. “For example, the same individual might start as a college student interested in their first credit card, then become a young professional focusing on wealth management and later a newlywed exploring mortgage products as they prepare to buy their first home. Institutions need to recognize these transitions and know when to start introducing products that align with customers as they move through these different life stages.”
Once customer personas are identified, institutions can track the behaviors of customers aligned with each persona and proactively offer products when specific customer signals are captured. As customers interact with a bank’s products over time, either as new customers or returning for different services, those touchpoints should feel seamless and tailored to their unique needs.
Personalize experiences
Many banks struggle to deliver seamless customer experiences due to siloed organizational structures. By leveraging data and analytics effectively, institutions can gain deeper insights into their customers to personalize interactions and foster stronger relationships.
“Data can help banking leaders understand customer emotions and opinions, and guide business decisions to improve the customer experience,” Hughes said.
Data analytics tools assess key demographic data such as a customer’s location, income level, education and age, providing insights that inform teams about what customers may be seeking at key stages in their journey. These tools also compile insights from a customer’s interactions within a bank’s mobile app or website, their engagement with specific products and their customer service interaction history.
By categorizing customers based on their financial needs, preferences and behaviors, banks can provide tailored product options, giving customers an experience that feels consistent and customized to their financial journey.
More banks are also investing in tech and automation tools to support efficient and effective customer service on digital platforms — from supporting marketing and communication to more streamlined partnerships with other fintech apps. In a Grant Thornton survey of banking and asset management CFOs early this year, 57% of respondents indicated they plan to invest in more tech.
“Marketing automation technology creates efficiencies and delivers a more personalized experience for customers,” said Grant Thornton Growth Advisory Principal David Koppy. “This helps transform them from one-product buyers to loyal multi-product consumers.”
To increase digital engagement and create a more “sticky” customer, banks can provide experiences that go beyond transactions with financial literacy and education on specific products and services. Whether customers are considering a new credit card, applying for a mortgage loan or exploring wealth management services, they are often entering unfamiliar territory when first exploring a new product — and institutions can bridge the gap between a confusing and satisfying experience.
“Banks should integrate financial literacy and education into their online banking website or mobile app so that, when a potential customer is browsing for a product, they gain additional knowledge,” Hughes said. “This approach helps position the bank as a trusted advisor customers can rely on for their next financial product.”
Protect customers
When developing their customer strategies, banks must be aware of potential risks — ranging from cybersecurity threats to regulatory compliance issues — that can affect both the customer experience and the bank’s reputation.
The increase in fintech-bank partnerships, for example, may boost regulatory exposure and scrutiny. While proactive partnerships enhance customer experiences, fintech companies often lack proper oversight and control. A dedicated approach to third-party risk management, with the support of the internal audit function, is necessary to protect customers from harm and safeguard a financial institution’s reputation.
Fostering a proactive, risk-aware culture across teams is also critical for risk management. As banks develop and share their customer strategies with cross-functional and consumer-facing teams, they should ensure those teams are trained on regulatory compliance priorities and understand how they may influence customer acquisition and retention activities.
“Consumer-facing employees should have just as strong an understanding of regulatory priorities as compliance professionals,” Hughes said. "Cross-functional team training is essential, especially in a highly personalized, digital environment where customer interactions are more frequent."
With solid risk management protections in place, banking leaders can confidently and safely enhance their customer base, whether their target persona is a college student seeking to build credit or a retiree endeavoring to make their nest egg last for their lifetime. And, with an effective customer strategy, they will continue to strengthen those relationships as their customers’ needs change over time.
Contacts:
David Koppy
Principal, Growth Advisory Services
Grant Thornton Advisors LLC
David Koppy is a Principal within the Grant Thornton strategy practice focused on growth strategies.
Bellevue, WA
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