Digitizing Customer Interactions during Covid Recovery for Banks & Credit Unions

Digitizing Customer Interactions during Covid Recovery for Banks & Credit Unions

By Batu Sat, Ph. D.
Founder + CEO, Mall IQ

How to learn your customers’ needs and serve them in a personalized manner when you can’t have face-to-face interactions.

We all know and experience different impacts of the Covid-19 in our daily lives. In this piece I want to dig a little bit deeper into these impacts from Bank & Credit Union perspectives. These observations are based on my conversations with many banking & credit union executives in the US and around the world as I’m a founder of a startup helping banks better engage with their customers.

Spoiler alert, there is genuine hope and opportunity for both…

***

Let’s start with financial institutions, in this context, I’m not talking about an abstract company, but the actual human faces that serves their customers in their local branch.

Before the pandemic, especially in more rural settings, there was ample opportunity for the banker to know their frequent customers or at least interact face-to-face, listen and learn their needs and priorities.

After the pandemic, understandably most of the branches had to be closed or switched to reduced hours and/or appointment based visits. Thus, only visits that were absolutely necessary have been made to protect both the customer and the banking staff.

Opportunity: On the other hand, pandemic accelerated the digitization of banking and significantly increased the percent of customers using and relying on Mobile Banking Apps.

***

What is missing: However, in most cases, doing banking via the mobile app could not fully replace the face-to-face interactions, especially from the perspective of the banker in the local branch. The previously personalized attention and solution offerings could not be done as effectively since the banker had little data in understanding their customers’ needs for credit/debit cards, personal loans, car loans, mortgages, insurance, etc.

As I mentioned at the beginning, there is a silver lining, where the increases in the mobile app usage, along with appropriate tools, can be used to better understand your customers needs and serve them in a more personalized manner, even though through a distance.

***

A fresh perspective: At Mall IQ, the tools and advice we provide to local, regional and national banks & credit unions are in essence to better understand their customers needs, as if conversing face-to-face, without the explicit conversation, but similar to conducting actionable digital surveys.

Large Purchases: For example, as a banker, you may want to remind your customers that are visiting stores visiting high-ticket items such as furniture, electronics, jewelry, about the special rate loan offers they’re eligible for being a valued customer, before they make a purchase and use another bank or loan product.

Many Auto Financing Options: A similar scenario can be imagined where your pre-approved customer is visiting auto dealerships where they have several financial options ranging including captive financing and BHPH (buy-here, pay-here) financing in addition to bank and credit union loans.

As we all know serving your customers with multiple products (up/cross-sell) in addition to a debit account creates deeper loyalty, higher life-time-value (LTV), better LTV/CAC ratio and ultimately higher customer satisfaction.

So in this new normal, it might be best to open new channels to learn the needs of your customers and provide value to them at the right time via personalized offers.

If you find this piece helpful or would like to suggest future topics that would be interesting, please reach out at via email or visit our website.

***

What’s Next?

Many ways to pay for everyday purchases: Compared to the high-ticket item purchases mentioned above, the most frequent decision a customer makes is about their day-to-day purchases paying at the grocery store, pumping gas, buying coffee & snacks and maybe the occasional visit to the mall for mid-frequency items such as apparel, shoes, cosmetics, etc.

From a credit card issuer perspective these purchases add up, either due to their frequency or the price of the items, thus being top-of-wallet for these purchases are an essential part of the customers’ loyalty with your financial institution.

Thus, knowing what your customers want to buy and when they’re about the pay is crucial in driving top-of-wallet behavior with a little help from bank funded or merchant funded offers to provide value to your customers.

But more about this in my next piece…