We focus a lot of our resources on capturing consumers as they enter the market, but what about those consumers that are considering switching accounts? 11% of consumers (representing $675 billion in deposits) said they believed they would switch financial institutions in 2015.
The opportunity is huge
11% are actively ready to switch, but the potential to attract others is much greater. In fact, a measly 23% of people are actually happy with their current bank. In our own survey, we found that a whopping 82% of millennials are open to switching accounts.
The most common reasons for dissatisfaction are:
- Poor service
- Excessive fees
- Lack of rewards or interest
- Lack of accessibility
- Not enough digital tools
- Consistent Errors
This presents a massive opportunity for community financial institutions who have an established community reputation for excelling in these areas.
61% of Millennials would consider using a local community bank or a credit union if they were changing financial institutions and 46% of Millennials say locally owned (i.e., not a national chain) is important when choosing an institution for their banking needs.
Consumers think switching accounts is difficult
Financial institutions are always looking to make account holders more “sticky” by offering products and services that deepen the relationship; multiple accounts, direct deposits, automatic bill pay, and financial incentives for having multiple accounts.
The perceived burden to take inventory of all these relationships and then transfer them over to a new institution is tremendous. So much so that consumers will forfeit better rates and service just to avoid taking action.
70% of Americans have never switched banks, and 61% reported they believed switching accounts would be “somewhat difficult.”
Add all these statistics together and you understand the consumer belief that it's easier to suffer through the inconveniences than to take on the massive inconvenience of moving your finances.
Meet that assumption and provide value
The good news? There is an even playing field because consumers believe it is equally difficult to switch to any institution. By going above and beyond to demonstrate how easy it is to switch, you give your brand a competitive edge.
An easy way to start alleviating the perceived burden is to provide educational content that makes the switching process transparent and guides the consumer through it. Start with a list of steps that will need to be taken, such as:
- Track all your automatic bill pays
- Track all direct deposits
- Open new account and transfer funds
- Transfer direct deposits and bill pays
- Close previous account
Tools for switching accounts
Give your consumers digital forms and tools that they can use to make the process of tracking and transferring transactions easy. You can use these templates as a starting place:
Finally, make it clear that you are a resource during this transition. A study by AOL found that 61% of consumers would rather open an account in person because they feel more comfortable and 26% thought it would be easier and faster to do in person.
Turn it into a marketing edge
81% of consumers who switch accounts confess that it actually wasn’t hard at all. This becomes really powerful when you consider that 44% of switchers rely heavily on recommendations from family and friends.
By making the switching process easy and painless, you surprise and delight your consumer. This is a prime moment for encouraging testimonials and reviews. Make sure that you have your social media sites set up and easy to find. Train your staff to make asking for reviews or feedback part of the switching process. For more tips on how to elevate the visibility of your social media profiles, download our free social media optimization guides: Facebook, Twitter, and Yelp.