In this edition of Marketing Insights: Savings & Deposits, we continue to see many familiar themes around innovation, technology and relationship banking. Alternative banks are definitely here to stay and pushing innovation by providing money management options that align with the digital customer. New customers who only need basic financial services are opting for mobile-only or online-only banks. We especially find that new customers are more likely to use online-only banks for their savings accounts than checking accounts.
The digital consumer skews younger, and remain the most likely to open accounts online. Millennials choose their banks for online banking services, reasonable fees, branch convenience and loyalty rewards programs. The evident growth of these digital customers continue to drive the debate around how banks should invest in physical interaction versus digital account management.
Does your organization have the right technology in place to support the account management needs of digital customers? As customers demand more tools to support self-service, the integration of mobile banking, text alerts, ATMs and new channels is imperative.
Key takeaways from this edition include:
- As interest rates rise, the war for deposits is heating up. Banks are facing greater competition in the current rate environment and are challenged to respond via marketing efforts. To attract long term profitability, banks are shifting focus to cash management tools, bundled offerings and premier accounts.
- Self-service continues to expand as banks are challenged to find an equilibrium between physical interaction and digital account management. As technology and customer demand advances, self-service has expanded beyond online banking into mobile apps and ATMs. In addition to innovating self-service tools, banks must also focus on integrating with existing products and services.
- Competitors are courting millennials with digital service delivery as well as meeting their unique needs. Banks can meet millennials’ demands for money management options that align with their digital lifestyle while helping them achieve their financial savings goals.
- Banks need to continue to innovate as mobile apps and offerings continue to evolve. To cater to customers who increasingly require simpler and faster banking, banks are redesigning and enhancing their mobile apps to deliver more sophisticated tools. By providing more functionality, it will enhance the banking experience.
- Digital innovation & customer engagement continues to create value. As the retail banking industry is challenged to keep up with technological advances, banks have focused on enhancing mobile and online interfaces to improve customer engagement. By staying current on changing consumer values, banks can position new products and services to best serve consumers and meet their ever-changing needs.