How Modern Consumers are Re-defining Their Relationships with Banks

August 20th, 2014

Consumers’ relationships with banks are becoming dependent on how products and mobile banking fit in with their lifestyles. And if that relationship is going downhill, customers are much quicker to break up with their bank. That’s why leading banks are on the prowl to find the next great way to offer more than just the basics. They’re adding interesting features to mobile, introducing ways to help customers save money and offering more relevant benefits—all to create positive, lasting relationships with customers.

Who’s Making the Switch?
Starting at the end of last year, there has been a spike in the number of people who are switching banks. According to a study by AlixPartners, in the first half of last year, about 7 percent of people switched their checking account provider, and that number jumped to 10 percent by the end of the year. That’s the highest it has been since reaching 13 percent during the financial crisis of 2008. Today, mobile technology is driving the switching. Sixty percent of smart phone or tablet users in the last quarter of 2013 said mobile banking played an important or extremely important role in their decision to switch.

Those kinds of numbers tell a big story, but they also leave a need to hear the voices of actual bank customers who are shaping those trends. In StrategyCorps’ man-on-the-street style consumer research videos, we’re asking people those types of questions, and this clip in particular shows a deeper look into the mind of the “mobile switcher” and what is most important to her.

She’s putting her own mobile lifestyle before her relationship with a local branch. And that’s a trend that is only becoming more common among consumers of tomorrow.

How Banks are Responding
The popular online bank alternative, Simple, purchased by BBVA for $117 million earlier this year, as well as Bank of America and other leading financial institutions, are looking outside of banking for inspiration to enhance their mobile strategies and product offerings.

Simple
simple2.pngsimple1.pngRealizing that social media is defining the way people interact with their phones, Simple has created a mobile banking app modeled after a Facebook and Twitter-like experience. With each purchase, you can add photos and notes to remember something about that transaction, and the app automatically geo-tags your location. You can also include hashtags in your notes, so by typing #lunch, for example, you are using a budgeting tool that categorizes all purchases with that same hashtag. It’s all for your eyes only though, so rather than these features being used to share things with other people online, they are simply used as familiar concepts that make spending and budgeting become easy and practical.

Are all those features necessary for me to manage my purchases? Not necessarily.

Does being able to use hashtags with my banking app and getting funny gifs in messages from customer service make me really like them? Absolutely.

Bank of America
boa.pngAnother benefit nearly every consumer can appreciate is saving money, and Bank of America now has a two-year head start in taking advantage of this concept. Bank of America released in a 2012 press release, “Our customers continue to tell us how important it is to save money while they shop.” And since then, Bank AmeriDeals has been their response to that request. Customers log into their Bank of America mobile banking app and select the Bank AmeriDeals section of the app. They can scroll through a list of discounts and activate the ones they want to use, and the cash back from those discounts are applied automatically when making a purchase.

While the app currently lacks a wide variety of deals and location awareness, there are indications that Bank of America will be updating the app to include location-based deals later this year. That brings the chance of an even further lead over banks that haven’t made these types of connections with their customers. Discovering how to build your products in ways that can enhance how customers are already using their mobile phones gives you the opportunity to not only keep the customers you have but to also attract new ones.

Find more consumer research videos at strategycorps.com.

saxton

Sicily Axton is the communications manager for StrategyCorps, a Nashville-based company that works with financial institutions nationwide to deliver mobile and online consumer checking solutions that enhance customer engagement and increase fee income. Follow Sicily on Twitter and LinkedIn.