Banking is an essential everyday process. It seems that we almost do it every day. We check our funds, withdraw or deposit, monitor investments, and more. It almost seems impossible for us to go through a day without doing a banking process. But despite this, banks still struggle to get customers.
The number of FDIC-insured commercial banks in the US is declining. In the 2000s, there were over 8,000 banks in the U.S. Now, there are only about 4,000. There are many reasons for this, one of which is that banks are very susceptible to the market. The other reason is consolidation: banks don’t see a real purpose in having branches everywhere.
The decrease in physical banks in the U.S. doesn’t necessarily mean that the industry is failing. However, many banks still struggle to keep themselves afloat because of the lack of customers. One way banks are trying to attract and retain customers is by digitizing their processes.
There are many incentives for banks to digitize their processes. One of which is the U.S.’ goal to be eco-friendly. Many of today’s banking customers are millennials and generation Z members. These two generations have been known to be environmentally conscious. As a way to attract customers from these two generations, digitized processes are done.
When an entity digitizes its processes, this lessens its paper use by a staggering 90%. They also become a lot more efficient in what they do. They are also able to reach out to more customers. All of these things come from such a simple transition to digital. However, some banks still struggle to make such a transition because of various fears.
One common fear is the susceptibility to being hacked. Millions of companies worldwide are susceptible to malware because they have entirely digitized their process. When a bank decides to transition, it means investing thousands or maybe millions of dollars into cybersecurity. Unfortunately, this is just an option that small banks can’t afford.
Efficient and Effective Onboarding
The onboarding process in banks can be a significant hassle to many consumers. It can also be a hassle to the banks because of the many hours a banking manager is preoccupied with a single onboarding process. This is why many banks are streamlining their onboarding process.
There are many ways banks are doing this. The most efficient way is by using wealth management onboarding software. This software can cut down the time to onboard customers while also keeping their data safe. This fast and effective onboarding process means more customers can be scheduled for onboarding in one day.
It’s quite staggering to know that many banks still retain this old strategy from a hundred years ago. We all know that banks can earn their money back without the need for fees. However, currently, there are only about 35% of banks offer free checking accounts.
People love free things, and offering free things to customers is part of customer acquisition. The simple act of removing fees in opening accounts can attract many customers to a bank. At this point, such an offer is unique and tantalizing for customers who had to pay for opening fees and hidden fees from their accounts.
Choosing the right fees to remove also matter. Although it’s quite easy to remove fees for opening an account, some banks can afford to remove all the other fees from many bank processes. It’s important to keep some of those.
Lastly, we can’t talk about the growing phenomenon that is online banking. It’s probably the main reason why physical banks are decreasing in the U.S., and it’s considered to be the number one way to bring customers into banking.
Many customers are looking for online options for their banks. For many, this is the most vital thing that brings them onboard with a bank. Banks without online banking options are potentially missing out on millions of customers in the country.
Online banking technically sells itself to customers. It’s convenient, works wherever they are, and anytime they need it. However, online banking is an expensive investment for many banks.
Many known banks have invested millions of dollars into their apps. Many others have spent the same amount of money and still haven’t released their apps. It’s a problem in itself, but once a bank can offer online banking to customers, their customer acquisition increases two-fold. That’s the strength of this service.
Banks are losing physical presence but not their profits. It seems that the concentration in the digital world and removing banking fees are the best options to attract and retain new customers. By doing these things, you have the possibility of increasing your customer acquisition by two-fold this year.