According to a research by J.D. Power Insights*, “When customers switch, financial institutions lose an average of $750 per customer, making it essential for banks to focus their attention on retaining existing customers.”
Financial Institutions often overlook new customers in favour of existing ones since servicing existing customers is less cost intensive as compared to the technology, facility, personnel and additional costs involved in on boarding new customers. Despite a slight decrease in attrition rates, managing customer abandonment in online account opening remains a significant challenge for most financial institutions. It is imperative for FIs to gauge the drivers of abandonment and how to deal with the same.
One of the factors imperative for taming abandonment is the delivery of effective customer experience. It is imperative for FIs to define a brand-wide vision for Customer experience and ensure a consistent delivery of the same across all departments at every level of the hierarchy. According to a report by J.D. Power Insights “More than four in 10 (43%) at-risk customers have experienced a problem in the past 12 months, compared with only 15% of loyal customers.” The same research reported a 128 points drop in satisfaction and an 18 percentage points increase in attrition when a customer encountered a problem. This data highlights the significance of effective resolution of problems for retaining customers.
The best strategy for minimizing abandonment in such a scenario is by resolving problems in the shortest time span within a single contact with the customer. Financial Institutions must adopt a two-fold strategy in such a scenario wherein they prevent such problems, with enhanced customer experience and ensure smooth resolution. Technology can play a defining role in achieving this with drilled-down customer data and insights. It can drastically reduce onboarding time and consequent attrition rates. Digital products and solutions like Business Process Management, Robotic Process Automation, Customer Communication Management and digi-sensing are the key to achieving this.
To read more about effective ways of reducing customer abandonment in online account opening, read Taming Abandonment in Online Account Opening.