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The Decline of the Accountholder Experience

July 1, 2021
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As the world emerges from the pandemic, financial institutions are realizing that some consumers are less than satisfied with their overall experience over the past 12 to 18 months. In new analysis of relationship surveys Raddon completed for dozens of institutions, it’s clear that accountholder perceptions of their experience have been declining for some time, but the pandemic accelerated that decline.

At first glance, financial institutions seem to have continued to perform well. Loyalty, satisfaction and willingness to recommend all remained relatively unchanged, even through the pandemic. So has the institutions’ share of wallet.

Consider this path, though:

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While growth, engagement and loyalty are all unchanged, experience has lagged. Good experiences lead to stronger loyalty, while poor experiences weaken it. And experience is suffering.

Raddon looks at 26 attributes of accountholder experience, covering everything from employee skills to technology and from convenience to pricing. In each case, we ask survey respondents how they rate their financial institution on a scale of 1 to 5, with 1 being significantly worse than the competition and 5 being significantly better.

From 2016 to 2021, every attribute had fewer accountholders rating their institution a 5, and the biggest drop has been in employee skills.

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The Case for Customer Service

Consider the 14-point decline in employees being polite and friendly. Most financial institutions expect their employees to be polite and friendly as a matter of course, especially those who deal with accountholders on a daily basis. However, many accountholders say their institutions are no longer better than the competition. Why? Do they expect more? Are employees actually less polite and friendly? Is the competition better? Has the pandemic had an impact?

The data suggest that even before COVID-19, some of the most fundamental attributes that community financial institutions expect from their employees were being rated lower than they had previously. While there were some deeper cuts toward the end of 2020 and into 2021, these impressions from the accountholders existed long before.

The good news is institutions can improve the accountholder experience on this front faster and more cost-effectively than some of the other categories. The investment here is in the people!

Institutions should reevaluate how they are hiring for branch positions. Twenty years ago, institutions hired tellers who knew how to operate the core system and could handle deposits and withdrawals. Ten years ago, as banks and credit unions sought to implement a sales and service culture, they focused on retail skills: people who could sell.

Today, accountholders expect employees to be knowledgeable in all aspects of the organization and advise them on everything from opening the right checking account to making a better, smarter investment with their wealth management services. National banks and other financial organizations have already figured this model out, and consumers have embraced this as the new era of banking by making those national banks their primary financial institutions.

To meet these new accountholder experience standards, employee training must also change and grow. There still needs to be the “back-to-basics” type of training, but it needs to go deeper than just basic products and services. Employees need to develop problem-solving skills so they can think outside the box to come up with the right solution for the accountholder. And the list goes on and on.

Technology for the Times

After employees, technology is the category that showed the most significant change over the past five years. Accountholders expect delivery channels such as online and mobile to be better than they were five years ago and to be competitive with the market. Whether the perceptions are valid or not, accountholders do not feel that community financial institutions have kept pace with the technology they need and want to conduct their banking.

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Improving the perception of technology is less about adding bells and whistles and more about making the bells and whistles more accessible.  Institutions should strive to reduce the steps required to complete commonly accessed features, like checking balance or transferring funds. Often, though, perception of technology requires use.  In the past 5 years, we see a direct correlation between the percent of accountholders using mobile banking at an institution and their perception of technology services.  Simply encouraging adoption can help overcome the stigma accountholders may be placing on a community institution’s capabilities.

Encouraging adoption can correlate back to not only how employees are trained to help their accountholders access features like mobile banking and online banking, but how engaged and knowledgeable employees are with those services. Once again highlighting the change financial organizations must make not only in how they hire for branch positions, but how they are training staff.

Good Service Continues With Servicing

When we asked survey respondents about servicing issues, fewer accountholders said they had experienced a servicing issue than those who responded five years ago. However, of those who did have an issue, far fewer accountholders were very satisfied with the resolution. Again, this demonstrates that accountholders are expecting financial institutions and their employees to be able to resolve their issues quickly, effectively and to their satisfaction.

This is a prime example of why employee training needs to go deeper than transactions. Accountholders expect bank and credit union staff – at all levels – to be able to know what to do to solve their issues. They do not expect to be told, “That’s not my area. I have to call someone,” or “I don’t have the authority to do that.” Problem resolution is critical to providing a great accountholder experience.

Deliver on the Promise

For decades, community-based institutions have consistently prided themselves on their exceptional customer service, and most still provide their accountholders that same exceptional accountholder service. It’s in almost every mission and vision statement. It’s what has always separated the credit unions and community banks from other financial organizations. But that’s the problem. It’s the SAME accountholder experience they’ve always provided, and it must change.

Accountholder expectations are higher and will only continue to increase each year. Consumers want more and better service, not only from financial organizations, but from everyone. And, if community financial institutions and their employees are not making the cut, accountholders are speaking out – not only via their ratings on surveys, but, more importantly and costly, by taking their business elsewhere.

Saying that you provide excellent accountholder service is not enough – you must deliver on that promise every day through every channel for every transaction. In addition, institutions need to measure results of their accountholder experiences, and, if the results aren’t good, figure out what isn’t working and change it quickly.

In the end, accountholder loyalty will last only so long, and accountholder patience will go only so far. Not providing the value proposition that brought accountholders to you in the first place could be the very thing that causes them to leave.