To Act or Not to Act: 2 Metrics Drive Banking Customer Retention

To Act or Not to Act: 2 Metrics Drive Banking Customer Retention

Recently my satellite company called me up. I thought it was a typical sales call, upselling me to some premium package. But I was surprised… They told me that data they are collecting on my system showed that we are having some signal loss and they would like to send someone out to fix it – on their dime. No service call charge, regardless of what they find. I was a little shocked, and I must admit, I was looking for the catch. There wasn’t one. But it was true that we were suffering silently with some signal issues. They sent out a tech. He reviewed the situation, found the installation wasn’t done right, and re-installed the entire satellite system. All without us asking. I asked what the motivation was for taking such a huge step. He said the company had identified that they were losing customers based on quality issues. Those quality issues were totally fixable, but they just didn’t know about them. So, they started collecting data. But what amazed me was the proactive way in which they intervened – even those they weren’t asked. It got me thinking about our banking customer retention experiences. Would you intervene financially with a customer if you thought – but did not know – the relationship was at risk? I’ve asked this question to many banks, and all too often the answer is no. At best, I get an “I don’t know.” Knowing When to Act The problem is that our banking customer retention efforts are build on being reactive, not proactive. We respond when a customer complains or closes...
Google as Mobile Banking: 3 Things They’ll Have to Get Right First

Google as Mobile Banking: 3 Things They’ll Have to Get Right First

The worst kept secret in the financial services sector is how much  Google wants to get into banking. Of course, it’s a bit of an old secret too. Google is technically already in banking. They own half of Lending Club, a P2P consumer lender. The reason bankers are scared of Google getting into banking outright is that Google is so much better at data analysis than any bank. Their ability to collect everyday pieces of data and turn them into revenue is still amazing – even by today’s standards. But, as I point out in my book, Seven Billion Banks, in order to compete in the future, Google will have to go mobile with their banking services. Right now, Google’s Android devices (can) use a combination of GPS, IP addresses from wireless networks nearby, and the nearby mobile network to help them pinpoint your location. So they have the basics of a location-based platform for banking. But what’s missing? I think 3 things they will have to nail perfectly in order to be a formidable banking foe. 1. Get the Location Right Google does a pretty good job of knowing where you are. But they’re not perfect. If the IP address of a wifi network is incorrectly linked to a geographic location, Google will “find” you in the wrong place. Sometimes, several states away. If you’re on or near a plane or cruise ship, forget it. They will place you somewhere across the globe. The theory should be that there is enough information for Google to get this right, but as of today, they don’t. If you’re on a...
The “F” in PFM Should Stand for “Fail”: 3 Ideas on How to Fix PFM

The “F” in PFM Should Stand for “Fail”: 3 Ideas on How to Fix PFM

If any technology deserves the award for “most missing its potential”, it’s Personal Financial Management (PFM) software. Many analysts and consultants have talked about the abysmally low adoption rates for PFM (here, here, and here.) Research by Javelin points us in the direction as to why there’s a problem. We’re not giving consumers what they want. Consumers tell us that they want all their account information in one place – even from other banks. They also want alerts and help with shopping and card reward usage. Basically, they want help making decisions. That’s why PFM fails today. It provides lots of information, but no help making decisions. Mark Schwanhausser, director of multichannel financial services at Javelin Strategy & Research puts it this way: PFM will appeal to a mass audience of online and smartphone-toting consumers seeking help with immediate, on-the-go, everyday financial tasks and decision-making. It is only a matter of time before PFM will be virtually ubiquitous, offered not only by FIs but also by billers, mobile carriers, insurers, retailers – anywhere consumers make financial decisions. The PFM of the future Mr. Schwanhausser describes here is what I called Decision-Oriented PFM. I describe it in my book, Seven Billion Banks. Very few PFM tools are integrated into the mobile experience. Instead they sit on the desktop version of the online banking application – when they’re available at all. The concept that consumers want alerts to help with decision making is consistent with the mobile strategy I laid out in an earlier article. Those push alerts are extremely critical not just for adoption, but for the actual value created...