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CU System
Survey outlines competitions communications strategies
CHICAGO (2/17/11)--Today's challenges--and consumer expectations--are transforming the way retail banks operate and serve customers. Credit unions can learn what they're up against by examining their competitors' strategies. A recent study examines what is impacting business and what strategies retail banks and lenders are using to keep their customers. "2010 Survey Results Top Retail Banking Communications Strategies" is a survey of 458 banking executives conducted by Variolii Corp., in partnership with American Banker, Bank Technology News and US Banker. Retail bankers' greatest challenges aren't much different from credit unions'. An overwhelming 84% said that financial reform/legislation poses the greatest perceived challenge both now and for the next few years. That's more than double the next greatest challenges--increased delinquencies/defaults (39%) and tighter lending standards (38%). The fourth highest challenge, generating 29% of responses, was developing a competitive mobile/online banking strategy, and the fifth, with 26% was: increased/more sophisticated fraud activity. Garnering less than 20% of responses were reduced customer satisfaction/decreased bank brand loyalty; continued industry consolidation, harder to reach customers (due to increased mobile-only households and reduced landlines), other, and reduced spending/lower credit card volume. With this environment in mind, the survey looked at communications strategies employed by the banks. Roughly 77% of banks surveyed use traditional, high cost methods of communicating with customers most often. Direct mail/postcards and agent interaction on the phone, are used the most--68% and 64%, respectively. E-mail (56%) and the local branch (52%) are the next most popular strategies. Other findings:
* Thirty-one percent of survey respondents communicate with their customers over a mobile device. In fact 44% of institutions surveyed did not know whether their targeted customer contact was through landline or a mobile device. * Thirty-two percent said they capture customer preference data to determine whether they are using a mobile device, while 55% did not. When asked why the banks don't communicate with customers via their mobile number, 20% indicated they didn't have the appropriate technology; 15% did not have the numbers or sufficient mobile number coverage, and 13% cited legal/privacy/security concerns. * Of those who do use customer preference data in their communication strategies, 85% used the customers' preferred communication channel; 42% used preferred language; 46% used preferred time of day; and 41% used customer behavior. * Improving the customer experience is rated "important" to "very important" among 86% of survey respondents. Seventy-one percent said offering customers self-service options was important or very important. Self-service options offered included online banking (89%); IVR for balance, payments (57%); opt-in alerts for balance limits, overdrafts (49%) and mobile banking, (38%). Eighty-six percent predicted their self-service options will increase somewhat or substantially in the next few years. * Forty percent of respondents already are leveraging social media to communicate with customers in their strategies to attract younger customer segments. Social media included Facebook, used by 34%; Twitter, 22%; various social media, 13%; blogs, 9%; LinkedIn, 5%; and e-mail, 5%. Of those who are not using social media now, about 35% said they were planning to incorporate them in the future.
In spite of the changes, traditional methods remain in full force, said the study.
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