Loans. Hated topic. Endless forms, lengthy processes, one more paper is always needed, and then waiting… Everyone who has applied for a bank loan at least once knows this stressful procedure very well. As if the mere thought of taking a loan was not difficult enough, the bank seems to complicate the whole process even more.
And this has not changed a lot for decades. Our parents were probably in very similar situations and were probably analyzed by similar algorithms (only then, maybe everything was done manually), so the bank would decide whether to approve the loan.
Isn’t it time the banks finally joined us in the new millennium?
The essentials: CX – Customer Experience
Financial institutions often forget that they are at the user’s service and not the other way around. But let’s start from the beginning.
Customer experience in banking refers to the customer’s experience interacting with various touch points, including online banking systems, email, call centers, online advertising, face-to-face interactions, and even social media.
Customer experience in banking is essential for two key reasons:
1. CX has become a very powerful marketing battleground. According to Gartner’s research, 81% of companies compete primarily or entirely based on CX, making CX a critical competitive differentiator for financial institutions in 2022 and beyond.
2. The better the customer experience, the more likely they are to remain loyal to the brand or institution, meaning CX has the power to improve customer retention.
How to improve engagement and gain lifelong customer loyalty?
It’s no secret that personalization is vital to bank customers – after all, it’s been at the top of the CX trend list for years. So even if the bank does not have new products that follow trends and ever-changing markets, the minimum needed is to push efforts to bring (at least) the following three segments to a desirable level.
Customer service is the first line of communication between the bank and the customer. Nothing is more frustrating for a customer than calling their bank’s customer service to report an issue, only to be put on hold. And then, after dozens of minutes of waiting, a person answers who read the answers from a pre-prepared script. Or worse, a digital chatbot answers.
In today’s market, mobile banking apps are no longer an add-on but essential. And banks without this capability are at a serious disadvantage as customers expect unparalleled convenience from a personalized mobile app. If a bank doesn’t have an app, it loses a vital modern customer.
Hyper personalization and proactive interaction
This doesn’t mean that customers like to be contacted constantly – in fact, customers want the exact opposite. This means banks should use AI technology not only to analyze large amounts of data but to create an opportunity to understand each of their customers truly.
What if the bank dedicated itself to each client separately, analyzed the user’s data to propose financial education, and helped raise the credit index? And when a client applies for a loan, which cannot be approved according to the algorithm, the bank helps that client and connects them with a partner who enables lending in other institutions.
That is not a hypothetical situation because such partner platforms already exist. Such as Ninja lender, a financial platform whose mission is to connect banks and credit institutions with clients looking for safe and attractive financing. Ninja Lender‘s mission is to ensure customers can use affordable and proven financial products. To fulfill its mission, the company provides banks and financial institutions with a dedicated system within which they can exchange information about loan requests from their clients.
In practice, this means that if a bank is unable to finance a certain client – it can send his loan application to another bank which can finance him through Ninja Lender. In this way, the bank recipient will earn from the sale of its products, and in addition, it will reduce the costs related to acquiring a new client. In return, the original bank will receive from the bank recipient an attractive commission in exchange for the “transferred” client.
That one mistake that costs banks hundreds of thousands of customers a year
What do the banks say? Unfortunately, they are wrong, and their actions are far from expected.
The main obstacles to banks’ ability to “exchange” their customers are the mentality, principles, and values that most of these financial institutions follow. Many assume that “the client is their property” and therefore do not intend to share any information, even if they cannot provide it with any financing.
In the current situation, banks are making a big mistake. They prefer to leave the client “to themselves” and thus, NOT earn money and have additional costs, instead of just starting cooperation with other institutions and extracting a significant financial benefit from it.
Can this approach be changed?
Ninja Lender believes that it can, but not immediately and not without the involvement of both financial institutions and clients themselves. Platform representatives are convinced that general financial education of every borrower and raising awareness of every decision-maker working in bank can bring the desired results. Only then will banks appreciate the possibilities offered by the Ninja Lender platform, and the clients themselves will be able to enjoy favorable and attractive forms of financial support.
As we emerge from what has been an extremely challenging period that has put significant financial pressure on many people – it is crucial that banks make even more efforts to do right by their customers in 2022. And ultimately, show customers that they intend to put their best interests first. Because that’s how you gain lifelong customer loyalty.