BANKING CHURN IS REAL
Attrition or inertia. Are you losing or winning? It is harder to know in this era as members are far less visible, opting for self-serve tools, and often using them off hours. A strong digital banking strategy enables credit unions to create acquisition inertia and positive customer retention.
In a recently published Accenture study, over 4,000 surveyed credit union and banking consumers reported that they are laser-focused on the value (or lack thereof) they receive from providers. Incremental updates based on price, products or services is often a cycle competing financial institutions get stuck in, not standing out among the crowd.
In that same study it is reported that attrition rates in the banking industry remain close to 11%, and the annual churn rates on new customers are roughly 20-25% in their first year, half of which don’t make it past the first 90 days after opening an account. This is especially alarming due to the rise in acquisition costs, while the customer profitability timeline (1-2 years) has remained the same. It goes without saying, the longer you have a customer, the more profitable that customer becomes.
CHURN ISN’T ALWAYS EASY TO IDENTIFY
With more and more customers turning to mobile banking, it is becoming more difficult to identify customers likely to churn.
One way credit unions combat churn is through offering a unique and personalized customer experience with an effective digital banking strategy. Consumers expect the same experience on and off hours, and financial institutions not employing the right digital tools run the risk of losing customers to rival or larger institutions.
MPX AND THEIR ONLINE LOAN PAYMENT PORTAL
MPX is a nationally recognized leader in delivering innovative customer experience solutions in financial services and beyond. We’re immersed in financial services, as well as four other consumer-centric industries. All our clients are facing a new way of competing in quasi-commodity industries where on and off hours experiences are separating the good from the great. Clients rely on MPX to provide innovation and leadership in the changing landscape of customer communications and relationship management. Best practices from each industry ensures fresh, innovation at a constant pace.
MPX sees a sizeable digital banking strategy opportunity for credit unions with their Online/Mobile Loan Payment Portal. A surprising number of financial institutions facilitate online loan payments for deposit customers only. Not only are non-deposit loan customers alarmed by the absence of digital payment capabilities, it is a glaring missed opportunity to combat attrition by marketing to a non-deposit loan customer to add other credit union services. If they don’t have the option to make online loan payments, they certainly aren’t likely to deepen their relationship with you.
The MPX online loan payment portal makes it easy:
- Both deposit and non-deposit customers can pay their loans online, and add extra principal with ease as well.
- The loan payment portal offers text-to-pay, a modern alternative fast surpassing auto-pay as the preferred automated payment method for loan customers. The member retains control by triggering payment when they receive the text notification that their payment is due. See TEXT-TO-PAY on our previous blog post.
With text-to-pay, credit unions collect their loan payments nearly seven days sooner than historically. This personal, modern communication is how to reverse attrition, earn loyalty and inspire members to spread positive word-of-mouth about the refreshing ease when working with your institution.
MODERN USER EXPERIENCE
The MPX online loan payment portal provides a comprehensive online document presentation and payment portal. Customers can view loan bills, statements and other documents while making one-time payments, scheduling recurring disbursements, enrolling in automatic payments, including the increasingly popular and secure text-to-pay option. The member is in control, they can opt-in for email or text notifications. They can easily authorize additional family member or commercial users to access the same account(s), and/or they can access all their accounts from a single user profile.
Not only does our loan payment portal provide world-class access and control, but it offers your credit union the ability to insert smart marketing messaging in an increasingly paperless world. The communication tool allows marketers to present relevant, appropriately targeted, and personalized communications to each member.
KEEP YOUR CUSTOMERS
The online loan payment site is a great way to bolster the relationship you have with your members and is a key part of any digital banking strategy. MPX recognizes that a better experience equates to member loyalty, the need for fewer phone calls, and fewer days outstanding for loan payments.