Retain Your Best Customers With Better Lending Products
Let’s face it – customers don’t take decisions lightly when it comes to managing their finances. According to a survey from Foresight Research, 22% of customers are extremely likely to switch primary bank providers within the next two years, nearly doubling from pre-pandemic findings. This significant shift away from financial institution loyalty begs a significant question: What constitutes bank consumers to look elsewhere when taking out a loan?
As consumers have become empowered with more loan product choices than ever before, they have also become more difficult to please when searching for a loan product to meet their needs. The competition has intensified among financial institutions of all sizes, as credit unions are fighting to survive among bigger banks and their resources to loan product innovation. Though identifying the catalysts for customer disloyalty can be difficult, financial institutions need to act fast as their customers are persistently being sought after by competitors with better value products and services. Here’s how you can make sure your customers come to YOU for their loan needs.
1. Best-in-Class Loan Products
Financial institutions must offer an extensive loan portfolio, while ensuring a cohesive experience across all product lines. Today’s customers look for convenience, simplicity and efficiency when taking out a loan. Loan offerings with capabilities including fast and secure onboarding, pre-filled application and reduced time for approvals will enhance your loan product selection and grow customer relationships.
Regardless of your financial institution’s size, customer loan product education is key. For instance, credit unions can pull ahead of larger regional banks by alerting their members of what loan products are available and how they can add value to their finances. Understanding customer behavior and expectations will give your financial institution the upper hand in delivering the best-in-class loan products at every stage in the customer journey.
2. Innovative Digital Applications
Digital innovation shouldn’t be overlooked; a recent study found that 88% of customers expect companies to accelerate their digital initiatives, indicating that consumers are more insistent than ever that their institutions utilize the most cutting-edge technologies that cater to their new set of expectations. Therefore, it is imperative that your financial institution provides simple and easy digital processes that guide customers to their desired outcomes before they begin to look elsewhere.
Revenue is not the only factor in being able to effectively digitalize. The key to driving digital innovation involves identifying your customers’ unique pain points and utilizing your financial institution’s resources in the best way to meet their demands through technological improvements. In fact, digitization allows credit unions to compete more effectively with traditional, larger financial institutions that have more capital to invest in new products and services. By partnering with fintechs, credit unions can address members’ needs on a case-by-case basis, saving time and resources. Creating an exceptional digital lending experience will determine your success in 2021 and beyond.
3. Personalization Strategies
Brand loyalty isn’t the given that it used to be. In fact, 55% of customers expect better customer service each year, and they aren’t afraid to terminate a relationship if that’s not the case. Today’s customers expect their financial institution to understand their unique needs and provide personalized experiences across all channels. To accomplish this, banks and credit unions will need to leverage customers’ transactional and personal information to anticipate needs and deploy insights generated across all channels in a timely manner.
In order to gain a competitive edge in lending, financial institutions will need to extend beyond personalized communication and provide contextual recommendations using the channels customers use most often. Though traditional channels like email and phone are still relevant in reaching a target audience, your personalization strategy should expand to include digital channels such as online chat, mobile, texts and even video chat.
The Takeaway
“Customer” is not synonymous with “loyalty.” The longevity of your relationship depends on your ability to understand and tailor your loan products to their needs.
At Anovaa, we empower financial institutions of all sizes to provide innovative and personalized customer experiences in lending. We built Anovaa to offer banks, credit unions and non-bank lenders a better way to offer their customers a full end-to-end loan product experience throughout their entire journey, while reducing overhead costs. Learn more how Anovaa can help your financial institution grow at anovaa.com or schedule a meeting today.