Banks: Where Nobody Knows Your Name?

A new survey of European bank customers could prove useful to banks on this side of the pond. The Future of Communications in Retail Banking survey, conducted by Coleman Parkes and sponsored by Xerox, analyzed how retail banks communicate with their customers and presented an argument for more personalized communication with customers to keep banks from losing market share.

More than 1,000 interviews were conducted in the UK, France, Germany and the Netherlands to gauge bank customers’ reactions to how banks conveyed information. Of those surveyed, close to half (47 percent) noted that bank-marketing campaigns fell short of focusing on their personal financial issues and needs.

Thirty-eight percent believed banks need to be more informal and less impersonal when it comes to communicating with them. In addition, 31 percent said banks should focus on more “product-type marketing.”

Clueless About Customers

The survey described the challenges many banks face in utilizing technology to improve customer communication. Many banks simply do not have an understanding of how various communication channels can affect customers’ perceptions of them.

Due to resource constraints, banks have difficulty capturing vital customer data, as well as properly segmenting customers. As a result, they miss out on cross sales as well as potentially profitable life-stage marketing campaigns where they can tailor messages to the life stages of their customers.

Generally, banks seemed very much aware of these problems. Approximately two thirds of the banks polled indicated that the poor availability of customer data proved to be a major impediment to their ability to personalize any communications with their customers.

In addition, 68 percent of the banks noted that their customer communication systems were not flexible in adapting to various customer-focused marketing approaches. Even as institutions are spending more money on technology, 64 percent said there was a lack of integration in the channels for conducting multiple activities.

Ready for Change

Banks said they were aware of these deficiencies in their internal systems, and they also recognized the value of overcoming these challenges.

More than 90 percent surveyed recognized that more customer segmentation and direct communication to these segments would improve customer loyalty. Eighty-seven percent believed that more targeted messaging would have a positive effect on sales.

Even so, 70 percent of banks said they were struggling to meet customer demand for changes in channel activity.

Finally, most of the banks surveyed reported that they wanted to make changes. Almost 90 percent of the banks indicated that there was a drive to personalize their messages and communications based upon customer preferences. In addition, 90 percent said there was a drive to personalize communication channels as well.

The survey concluded that banks will need to continue working on this area: “Surprisingly, for such relatively wealthy and sophisticated institutions, banks are facing constraints on their resources and are not as adaptable as might have been expected.”