The Evolution of Customer Communication Channel Preferences

by | Apr 6, 2021

How Financial Institutions Can Stay Connected With Customers In An Evolving Omnichannel World

The channels financial services providers use to communicate with their customers continue to evolve in response to consumers’ ever-changing preferences. A number of forces are driving the shift in communication channel preferences, including the disruptions caused by COVID-19, as well as concerns about security and data privacy. These forces are expected to have a significant effect on how financial institutions interact and communicate with their customers.

As we continue to navigate into the future, it will be more important than ever for banks, credit unions and wealth management institutions to maintain a meaningful connection with their customers, members and clients.

A lapse in communication could erode the trust relationship, and in some cases, a breach of trust can be enough to make a customer switch to a competitor.

Omnichannel Customer Communications Are Becoming More Complex

Today’s consumers want the freedom to select their preferred communication channels. The number of available communication channels has greatly expanded in recent years and now covers everything from traditional print correspondence and email notifications to the more recent, such as digital voice assistants.

When it comes to establishing a connection with a financial services provider, however, consumers don’t distinguish between old or new channels – but instead, expect to have access to and communicate via all channels. In addition, they want to seamlessly access their preferred channels anywhere and at any time.

As shown in Figure 1 below, nearly three-quarters of respondents to Keypoint Intelligence’s transactional communications research wanted to decide which channels their providers should use to communicate with them.

In addition, well over half wanted the freedom to select the information that was most relevant to them and have only that information represented regularly.

Figure 1, which is a landscape barchart showing level of agreement, as a percentage, with various statements about communication channels
Figure 1: Agreement with Statements about Communication Channels

While omnichannel addresses the need for unified communication that spans numerous channels, the messaging and content development have become increasingly complex.

The COVID-19 pandemic has served to increase the complexity associated with providing a seamless and personalized customer experience across all channels. Although the transition to digital is clear, well-publicized security breaches and public awareness regarding personal data remain front and center in the minds of consumers, emphasizing the need for a unified and secure experience across channels. As a result, consumer preferences have become increasingly difficult to model on a total, generational, or even economic scale.

To this point, the family makeup of US households has shifted in recent years. We are seeing a substantial rise in single-parent households, whose preferences and demographic makeup can be quite varied.

Keypoint Intelligence’s most recent transactional communications research suggests that roughly 40% of single-parent households prefer to access transactional communications primarily through mobile apps, whereas non-single parents prefer using a provider’s website/portal.

As this shift in communication preferences evolves, financial services providers will be challenged with implementing a customer communication approach that enables a full omnichannel customer experience in real time.

The lessons learned from the pandemic suggest that financial institutions need to take pause and reassess how they connect with their customers, while also taking strategic steps to continually monitor their channels, ensuring their ability to enhance the customer experience with personalized and relevant communications.

The Importance of Channels to Delivery Strategy

In Keypoint Intelligence’s most recent research, organizations were asked to specify the importance of various channels to their transactional communications delivery strategy, now and in the future

Figure 2, which is a bar chart displaying results in terms of importance of channels to delivery strategy
Responses were rated on a scale of 1 to 4, where 1 meant “not important at all” and 4 meant “extremely important.” Figure 2 above provides the average overall score for each channel, and higher values indicate greater importance. Figure 2: Importance of Channels to Delivery Strategy

Based on these findings, it is evident that channels like mobile apps, smart speakers, social media, personal cloud storage, and personalized video are expected to become increasingly important to transactional communications strategies over the next two years.

Strategies for Success

Regardless of which channel-or better yet, channels – you choose to establish and maintain a connection with your customers, it’s important to keep a few things in mind:

  • No channel is an island! No matter how effective a certain communication channel might be in a certain situation, there is no single “magic bullet” channel that can always be relied on for ultimate efficacy.In most cases, the best communication strategy will include a combination of channels that all work together seamlessly to drive the same message home. For example, printed communications can be quite effective at directing financial services customers to digital channels to improve the customer experience.}
    According to Keypoint Intelligence’s 2020 study entitled Vertical Industry Views from a Socially Distanced Perch, over 90% of financial/banking respondents were sometimes or frequently coordinating their direct mail campaigns with email or other digital media.
  • Demographics matter. Although a Gen-Z consumer might welcome regular text messages from their bank, credit union, or wealth management company, these same texts might be off-putting to a Boomer.Demographic differences do exist but are not always sufficient to address the complexity of today’s omnichannel communication preferences. It’s important to learn about your customers’ preferences while resisting the urge to make assumptions based on demographics.
  • Put the customer first! The best way to bridge the gap between yourself and your consumers is to give them what they want – choice! Enable your customers to select the channels that you use to communicate with them, and then honor their communication channel preferences.Personalization of content is also required to make communications especially relevant to the individual recipient. According to Keypoint Intelligence’s Vertical Industry research, nearly 95% of banking/financial respondents achieved higher response rates on direct mail campaigns that incorporated customization/personalization.
  • Innovations in communication are a constant! Don’t be misguided into believing that innovation is only for new communication channels. As a matter of fact, all communication methods are in a constant competitive state of flux, with new innovations bringing strength and renewed relevance all the time. For example, innovations in print-based augmented reality can bring new life to marketing inserts and direct mail for the banking, credit union and wealth management segments.Communication channels and their technological stakeholders will continue to evolve their positioning and value.

The Bottom Line

As we continue with this series of blogs, my colleague Eve Padula and I will share some of the key trends uncovered by Keypoint Intelligence’s recent research.

As previously stated, no single trend stands alone – customer communication channels are all interdependent on each other to drive loyalty and satisfaction. In future installments, we will explore how hyper-personalization can help drive a better customer experience in the financial services industry.

Financial services providers need to continually evaluate and adjust their outbound and inbound communication strategies to ensure that they are capturing the consumer sentiment toward channel selection.

At the end of the day, consumers will remain the most loyal to businesses that enable them to communicate on their own terms in a simple, seamless way. No customer wants to be put on hold for an extended period or led to a dead end because they can’t find their account number – the customer experience matters!

It is up to businesses to determine their customers’ communication channel preferences, while also realizing that what works for one customer may be completely off-putting for another.

Customer satisfaction hinges on having foresight into what your customers want and then delivering communications from a platform or provider that can reflect that level of knowledge.

3. Expansion of digital products

As banking customer behavior shifts, banks must move with the times, or risk getting left behind. Many banks today are exploring the power and potential of open banking, which can allow them to offer more innovative products and services to their customers, as well as to better compete with fintech companies and other non-traditional financial service providers.

As you shift your banking business model to reach new segments or provide an enhanced array of services, communication becomes even more pivotal to your success. After all, if your customers don’t know which new services they qualify for, or how those services will help them meet their goals, then they are unlikely to explore them further. CCM technology can be leveraged here to provide personalized on-statement messaging that directs customers to the right products and services, as well as 1:1 personalized “explainer” videos to help them get started.

Adjusting your bank’s priorities to thrive in 2023

In an era of constant change, the key to successfully transforming your bank’s business model will be to stay attuned to the changing needs and preferences of customers, and to be open to exploring new opportunities and technologies that can help your FI stay competitive and relevant. But these new opportunities are doomed to fail if you do not clearly communicate their benefits and make it simple for customers to access them.

That is why transforming your customer communication strategy is the best first step to broader digital transformation. By updating your approach to communications to meet omnichannel customer needs, you also position your bank to communicate the benefits of changes in your broader organization, like new or enhanced products and services. The pace of change in banking has never been brisker – but with the right strategic approach to these changes, the future is bright.

Investing in a modern customer communication management and engagement platform is an essential part modernizing your banking strategy, as it can provide the personalized digital experiences that will keep your bank or credit union ahead of the competition. It helps provide a great customer experience, and builds rich relationships, which in turn results in customers for life and a competitive advantage in the rapidly evolving financial marketplace.

How Doxim can address the banking customer communications trends identified and help future-proof your digital banking strategy

banking customer communications trends

Doxim’s experienced consultants and omnichannel platform can help transform your customer experience in many ways, including:

  • Gathering and utilizing customer data to continually improve the personalization of communications.
  • Building trust with customers via communication (via print, PDF, HTML, email, text, and online interactive experiences).
  • Leveraging interactive video to drive personalized digital customer experiences, such as interactive statements, bills, or reports, that offer visual engagement and real-time interactivity
  • Putting customer data, including customer statements, at the fingertips of your service representatives for immediate and personal service.
  • Making a meaningful connection with value-added content, like information about philanthropic activities, on customer statements.

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