Banks Get Surprisingly Positive Reviews From Customers, According to New FICO Research Study
Due to the pandemic over the last 18 months, millions of Americans have been facing financial pressure and uncertainty. Financial institutions across the banking spectrum have had to adapt and respond in order to support their customers. These unprecedented circumstances raise an important question: Have banks been nimble and perceptive enough to broaden their scope and expand their capabilities to adequately respond to customers during this time of need?
FICO recently conducted a survey to gauge the impact of the global COVID epidemic on U.S. consumers and to see how effectively banks have been communicating with customers and responding to their needs. By analyzing the ways customers and banks communicated and reacted, we’re able to gain insight into the relationship between consumers and their lending institutions.
While a similar survey conducted on U.K. consumers yielded more unfavorable results, FICO discovered that the vast majority of U.S. consumers are actually satisfied with the way their banks have supported them. In fact, the study found that more than 4 in 5 (84%) of consumers are satisfied with the level of support their financial institutions have provided since the start of COVID-19.
[The research was conducted by Censuswide on behalf of FICO from October 6-23, 2020 and included 3,000 U.S. adults aged 18 and older.]
COVID-19 & the Evolving Customer-Bank Relationship
This pandemic has been a heartbreaking personal and financial experience for many individuals and small businesses. Out of the 3,000 respondents in FICO’s study, less than half (47%) said they’ve been fully employed as normal during COVID-19. When asked how confident they are about their finances remaining stable, 24% of consumers said they were “not very confident” or “not at all confident.”
The way consumers transact and the relationship they have with their bank has dramatically changed over the past 18 months. While consumer demand has been trending towards digital for years and consumer expectations of their experience has been shaped by other best-in-class digital services, the nature of this pandemic forced both consumers and banks into a deep digital relationship overnight. Most banks have had their physical branch locations closed and were now dependent on call centers and digital channels as their only means of servicing concerned customers. U.S. banks accelerated their digital transformation efforts to build out their digital channels in an effort to predict their customers’ needs and deliver best-in-class experiences.
According to the study, 42% of consumers said they have had to contact a financial services provider to help them manage repayment of existing credit commitments since the start of COVID-19. Additionally, 44% of consumers said they have needed to contact one of their financial services providers to assist with financial matters otherthan a payment holiday (such as making changes to account details, withdrawals, etc.).
The most common financial product that people needed help with was their credit card, with 48% of consumers saying they had to contact their credit card provider to seek help managing payment. This was followed by mobile phone service at 21% and auto loans at 20%.
The COVID crisis has amplified the need for banks to deliver high-performing technology that boosts customer engagement, solves customers’ needs, and fosters a more personal relationship with each customer. It also highlights the importance of having a robust communications strategy for cultivating customer loyalty and goodwill.
Effective Communication Is a Key Component of Customer Satisfaction
FICO asked consumers how helpful their banks have been in managing their credit commitments and communicating with them during the COVID-19 pandemic. As it turns out, most banks have been doing an excellent job at offering fast responses and customer support. An overwhelming majority of consumers noted how easy it was to get hold of their financial institution to discuss a payment arrangement for their current debts – with auto loans (92%) and online loans (92%) being the easiest.
A solid communications strategy is vital for success, and part of providing great customer service means being easy to reach. The study found that 88% of consumers said it was easy to get hold of their credit card provider for help managing payment (including 64% of consumers who said it was “very easy” to do so). The top communication methods that people used to contact their financial services providers were online, via email, and by telephone. For credit card customers, 57% of those who needed to contact their lender to help manage repayment have reached out online, 49% made contact by email, and 48% by telephone.
The first step is being able to get in contact with someone at the bank – however, it’s only meaningful when banks respond in a timely manner and with a solution that is helpful to the customer. FICO’s research found that 44% of consumers were able to arrange a payment holiday with their credit card lender as soon as it was declared as an option, 21% arranged one in the next 2-3 days, and 16% did so within 7 days after the option was announced. That means 81% of credit card customers were able to arrange a payment holiday with their bank within a week of the option becoming available.
Research shows that effective communication is a key driver for customer satisfaction and a main reason why consumers are happy with how their banks/lenders have supported them during this time. According to the study, 51% of consumers indicated “good choice of communication methods” as the top reason for their satisfaction. Furthermore, when consumers expressed dissatisfaction with their bank, it was mainly due to poor communication. Long wait times for telephone calls to be answered (33%) and unsympathetic responses (30%) are some of the top reasons why people are not satisfied with their banks. Other complaints include lack of immediate attention (29%), lack of choice for communication methods (28%), and slow responses (27%).
Banks Get Positive Results With a Proactive Approach
Consumers’ relationships with their financial institutions is the bedrock of their financial confidence. This pandemic was a unique opportunity for proactive banks to cement their relationships with their customers and provide them with confidence and stability during these trying and uncertain times.
Customers are happy when their banks communicate effectively – which means quickly, conveniently, with solutions, and with a sense of compassion for their situation. When consumers were proactively contacted by their bank, 78% said that they were contacted in the way that was most convenient for them.
Overall, the vast majority of people are satisfied with the level of assistance their banks have provided during these difficult times. FICO found that 84% of consumers said, on the whole, they are satisfied with how their financial services providers have supported them since the start of COVID-19. We’ve learned that good choice of communication methods is the biggest contributor to a positive customer experience (51%), followed by helpful/sympathetic responses (38%), good response times to emails (33%), and immediate decisions made (28%).
These findings demonstrate the need for financial institutions to be proactive and communicate with customers across multiple channels (e.g., chat, email, phone) that are driven by specific customer preferences. Using intelligent, scalable customer communications programs will help banks connect with their customers on the right channel at the right time.
The relationship between customers and their banks revolves around communication. By investing in their customer communications, banks have been able to deliver improved customer experiences and help many people navigate the public health crisis. This strategy has proven to be invaluable in cultivating goodwill and customer loyalty during a time when millions are struggling.
About Author: Nikhil Behl, Chief Marketing Officer at FICO
Nikhil Behl has over 25 years of technology, software and e-commerce experience. He is currently the Chief Marketing Officer at FICO, a Silicon Valley pioneer in the use of predictive analytics and data science to improve operational decisions and transform organizations. Nikhil is currently leading the marketing efforts around FICO’s innovative, new cloud-based decisioning platform designed to help customers accelerate their digital transformation. Prior to FICO, Nikhil helped to lead two start-ups in the ecommerce space as well as held executive leadership roles at Mercantila and Hewlett-Packard (HP). He is an entrepreneur at heart and sits on the advisory board of a number of Silicon Valley start-ups.