Mercator Blog

Participants in FI Relationship Rewards Programs Are Motivated to Stay or Expand Engagement
Date: March 13, 2018
Karen Augustine
Manager, Primary Data Services
U.S. consumers are using an ever-growing array of banking touchpoints to transact and communicate with their financial institutions, although most still rely on face-to-face contact with branch personnel. For banks and credit unions, the branch remains the hub for strengthening the customer relationship beyond transactions. Customers increasingly expect their financial institution (FI) to offer them more than payments services. They expect better and faster communication using a variety of channels at their convenience for seamless delivery of financial products, services, and advice focused on their needs. Meeting those expectations requires FIs to offer the omnichannel experience with a personalized approach to customer interaction. Not only do consumers want their financial institutions to know them better, but they also seek help to improve their financial situation and they expect to be rewarded for their loyalty.

Even as FIs close some branches to reduce costs, they must reshape their remaining local branches to support more personalized financial services and advice, enabling customers to communicate through multiple channels without restating or reentering information. The branch is key to drawing in new customers, communicating with existing customers, and cross-selling products and services. As customers increasingly find it more convenient to conduct transactions digitally than face to face, the branch is becoming more important as a center for financial advice, problem solving, and supporting customer goals. Consumers expect digital features to be incorporated into the branches, which will change the nature and the feel of branches in the future. Despite increased use of self-service channels, branches remain the center of most retail customers’ banking world, where customers can interact with knowledgeable personnel on important issues that cannot be resolved as easily through self-service methods. Many FIs still require consumers to visit a branch to complete account-opening paperwork or speak with subject matter experts, and consumers are returning to the branches for account opening perhaps in the wake of frustrating experiences in account opening online and by mobile.

Today’s customers demand an integrated channel experience with a variety of banking options, including the branch. The branch will remain essential because consumers prefer personal interaction at the branch and visit their branch for advice, customer service, and to obtain a wide range of financial services including investments, private banking, and wealth management.

The 2017 CustomerMonitor Survey Series on Banking and Channels focuses on the importance of branch banking compared to other channels, customers’ frustrations with the cross-platform issues, delays, or improper targeting, their interest in greater personalization when in the branch, and the range of financial services they use. We also focus on the breadth of customers’ relationship with their primary financial institution, the criteria they use to select a primary FI and their reasons for switching, their account opening experiences, participation in relationship rewards programs, and their relationships with 15 major banks. The survey data analysis highlights U.S. consumers’ preferences for interacting with their financial institutions and suggests improving the consumer experience to provide the advice, support, rewards, and offers that customers have come to expect.
 
The report,  Omnichannel and Branch Banking: Getting It Right, reveals that while U.S. consumers want their financial institution to offer them better rates and rewards, only 38% of U.S. adults say their financial institution offers them a relationship rewards program that allows customers to accrue points, discounts, free services, or cash back based on their account balances, new account openings, the types of accounts held at the bank, or type of transactions made (such as direct deposits or using mobile app or ATM deposits).