AI-Driven Customer Retention Strategies For Banks
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Acquiring new customers is expensive. Banking services can adopt many customer acquisition strategies to reduce CAC, but the acquisition is challenging when there are too many players in a market. At the same time, customer retention is five times cheaper than customer acquisition. It also reduces CAC by upselling and cross-selling to existing customers.
Banking customers are generally not satisfied with their service. A study by FIS found that only 23 per cent of customers are happy with their banking service.
Furthermore, if customers stay longer with a bank, some of the benefits seen are repeat customers spend more; long-term customers are open to upsell; existing customers require less marketing; and loyal customers foster word of mouth marketing.
5 AI-driven customer retention strategies that banking businesses should use
Today, customers are more value-oriented as they have multiple alternatives. This increased competition, rise in technology and globalization has subsequently changed the way people bank.
A Global Financial Services Consumer study conducted by Accenture found that:
- around half of consumers expect financial providers to offer propositions addressing core needs
- one in two consumers indicated an interest in personalized financial advice from banks
- more than half of survey respondents expressed an appetite for an actual omnichannel banking experience
All these expectations can be solved by technology.
Customer retention strategies based on technology, such as AI and customer support automation, can help banks become AI companies of the future.
So how to retain customers using technology?
Improve customer service: The second most common reason for switching banks (35 per cent) is customer service quality. Naturally, customers want high quality, 24×7 service, faster support, and quicker resolution. Chatbots can solve this by responding immediately and screening customer complaints. In the same way, agents enabled with information can respond faster and accurately.
By harnessing customer data, banks can provide customer-centric experiences. Furthermore, with the advances in technology, AI can better understand customer intent, improve security, and allow transactions directly on the chat application (reducing the friction involved in online banking.)
Omnichannel support: As phones get smarter, customers spend more time on them. Banks should facilitate services on different mediums (offline & online) and channels (website, apps, social media, WhatsApp). Without a doubt, customers will find it easy to do business with the bank. For instance, AI-powered customer support channels are enabling an omnichannel experience.
Banking services are also plagued with dropouts at the onboarding stage. A significant aspect of the onboarding process can be automated. And to add to a seamless experience, customers can choose their preferred channel and time.
Consistent feedback channel: CSAT scores tell how customers feel about the bank they are banking with. One sure-fire way to find out is by getting their feedback. But customers don’t want to fill lengthy forms. Using automation tools in customer service processes, banks can do away with conditions.
Above all, conversational banking support can be built to ask precise, personalized questions.
Up the engagement game: Around 11 per cent of people said engagement was one of the reasons to switch a bank. To retain customers, banking businesses should proactively communicate with customers, be where they are, and talk to them when they are free.
Customer support automation also allows banks to engage with their customers in different media formats (text, images, videos, pdfs, voice, maps, etc.), and multiple languages (multilingual bots).
Personalize. Personalize. Personalize.
Financial services cannot opt for one-size-fits-all methods of communication anymore. Gone are the days when banks could send SMS’ to their customers and be done with it. Banks should, on the whole, tailor engagement to specific needs and diverse markets. Banks must focus on understanding the market’s needs, attitudes, and behavioral patterns. This data can improve the chatbot’s algorithm to send smart messages, personalized tips, and serve specific business needs.
To sum up, banking services need to design strategies that cater to specific needs and personalization. At the same time, it should provide value and be scalable. AI-driven technologies can help companies build customer relationships using customer retention strategies. Subsequently, it will help provide unique customer service, setting them apart from their competitors, and increasing customer retention.Reimagine customer retention by being the AI bank of the future.