The financial services industry is one of those traditional professional services industries very much in transition. Digital transformation has gripped the industry and for good reason. A sector that contributed 7% of the UK’s economic output in 2018, with almost half of that in London alone. With major FinTech players such as Revolut, Monzo and Sumup rising, the landscape of the financial services industry is evolving quickly.
What’s clear to me is that the old business as usual for many firms in the industry is no longer feasible if they want to continue scaling their business and remain relevant through these times. It’s not just technology that plays a part. Trust is a huge factor in the industry. Naturally, trust is something that is difficult to build but easy to lose and this is often the case around sensitive industries or topics such as finance.
Let’s take a look at a few ways you can build trust and retain clients for a long period of time.
Build unwavering transparency
It’s here that I start because it’s such an important part of the focus of decision-makers in this industry. Just 32% of consumers think that incumbent banks are transparent about their fees, account handling and charges. Whilst 57% are likely to trust a company if it provides specific information about rates and fees upfront.
This unprecedented level of trust that can be built by being brave and transparent can be leveraged as a competitive advantage. Focusing on the customer and gaining loyalty through transparency will inevitably help gain this advantage. Given hidden, ludicrous interest rates of 30% or similar, devious strategies are still happening. Make your small print known. The future of financial services places the wellbeing of clients first.
Social proof all the way
The transparency for retention leads nicely into my next strategy – social proof. Sometimes, in fact, more often now than ever, the best form of getting your message across is from your existing customers, not you! There is a lot to be said for putting customers at the heart of your message to build retention through trust. In the financial services industry specifically, this couldn’t be more relevant. It’s important to stand out for the right reasons.
Customers are at the heart of the flywheel. The more momentum you build with your existing customer base, the more inbound interest you attract. Again referring to that previous article about trust, more than 60% of customers will trust online reviews. If they see other businesses or individuals like your financial product or service, it makes them want to learn more instantly. It’s that fear of missing out, a very powerful retention tactic.
You can be even smarter by using already loyal customers for this. It will help convince others they need to stay with you or potentially spark a conversation to increase their engagement. Let your customers not your salesperson, be your best case study of what retention looks like.
Pivot into the era of subscription
It’s often been questioned, would businesses and clients use a service-based model like Amazon or Netflix in the financial services industry? The answer is yes. It’s being done already and done well. Revolut has nailed this as a challenger bank, with its subscription-based banking offer. It’s followed the same successful freemium model as HubSpot by providing users with free current accounts and no fees on currency exchange in 24 currencies.
There are then the paid subscription models that retain clients on higher thresholds, with access to major benefits such as travel or medical insurance, cashback offers and priority support should their customers need that.
We’ve personally seen subscription models such as ‘outsourced risk officer as a service’ work in the B2B space. How can your offering move into a model like this? How might it evolve your reach? Make these considerations. You don’t necessarily have to charge a fee for a subscription to gain that retention, there is the option to provide benefits in other ways in exchange for that loyalty.
Reap the benefits of existing customers
It’s widely understood now that retaining an existing customer is better than aiming to acquire new customers consistently. Retention in Financial Services can provide a great ROI while also costing 5-25X less. Realise this value by spending time on your customers and you’ll turn them into champions of your firm!