The UK’s retail banks believe that offering customer services based on information will improve customer loyalty, according to a survey by ‘customer empowerment’ group Ctrl-Shift.
In a survey, the group asked how important a driver ‘information-driven services’ would be for customer loyalty. The average response was 8.2 out of 10, with 10 being ‘extremely important’.
Ctrl Shift defines two categories of information-driven service. The first is online services that help customers manage their personal finances. These include online banking and budgeting tools, automated instructions and peer-to-peer advice services. Half of the banks interviewed said they had found a correlation between take-up of online services and increased loyalty.
The second category, information-eliciting services, improve the transfer of information – such as planned purchases or lifestyle changes – between customers and banks.
Alan Mitchell, Ctrl-Shift strategy director, told Information Age that by providing information-driven services in both categories, banks have an opportunity to differentiate and provide a truly valuable service.
"The first wave of online banking was really just a sort of digital version of what you had already had, therefore it wasn’t adding extra value," he says. "Once you start crunching the data, and using it in a way that helps individuals manage money better, it really begins to add value."
To do this, Mitchell says that banks can be proactive in helping customers manage money. For example, they might notify overdrawn customers before they receive a fine or issue a warning on an unpaid fine.
"In the past, banks have all ignored these things because it’s been the easiest and best way to make money," Mitchell says. "Instead of hoodwinking customers and trying to confuse them with the data they have on them, we’re realising that there’s an opportunity to be different".
Because of new comparison sites, Mitchell says banks must look to information services to appear as "good banks" in the eyes of their customers.
"There is a competitive imperative because of what’s happening in the market," he says. "The bar is rising in terms of transparency and honesty".
