The value of brand loyalty cannot be overstated — especially in the banking sector. Loyal customers spend more with their bank, cost less to serve and are more likely to recommend the bank to friends and family, according to Bain & Company. But in an era where customer expectations are higher than ever, loyalty is becoming harder to maintain.
Customers now demand digital, personalized experiences that make managing their finances easier and more intuitive. And when they don’t get the positive customer experience they expect, they’re not afraid to leave.
With the demand for digital banking skyrocketing, many customers are turning to fintech solutions to meet their needs, from tech giants like Google to neobanks like Chime. This new competition is forcing banks to kick their customer retention efforts into high gear.
What are the tactics banking services currently use to keep customers? What can they do differently? We dig into how banking loyalty is changing, the solutions banks should be using and examples from some of the biggest brands.
The Banking Loyalty Situation Today
Digital banking is here to stay. From opening accounts to writing checks to making investments, customers want to do the bulk of their banking online.
- This shift accelerated with the pandemic. Banks closed their physical branches, forcing customers online. Now, even years later, this digital transformation continues at full speed, reshaping how financial institutions approach CX.
- Younger generations are demanding digitalization. Gen Z is leading the revolution of digital banking. With this demographic taking over the workforce and gaining more purchasing power, they’re demanding even more digital-first banking solutions.
This shift towards online banking is leveling the playing field. The industry was once dominated by banking giants. Now, customers are turning to whoever can provide the best digital CX — and fintech companies are doing especially well in this domain. In fact, trust in online-only banks has shot up, with 61% of consumers trusting banks without physical branches the most.
Banks, on the other hand, are being hit hard by this trend. According to a report from Raddon, there were over 15,000 banks in 2010. Ten years later, that number dropped to just over 10,000. Meanwhile, Self Financial found that if current trends continue, physical bank branches could be extinct in the U.S. by 2041.
While banks continue to revamp their digital comms, churn continues to climb. Economic challenges are making customer retention even tougher. Customers have become much more price-sensitive, with their sensitivity toward financial products increasing 1.2x to 2.7x over the past 4 years due to rising interest rates and inflation.
This leaves providers in a difficult position. To stop customers from making the switch to fintech services or leaving for the next hot offer they see, financial institutions must focus on how they can strengthen customer relationships and give their brand loyalty a much-needed boost.
Solutions To Cut Churn in Banking
We know customer loyalty is increasingly important for banks. An analysis by Heliyon found that the top 3 factors influencing banking customers’ loyalty are satisfaction, trust and service quality.
JD Power’s most recent survey also points to personalized financial advice as a key determinant in customer satisfaction, but there’s a catch. You can’t just share the information — the customer has to remember receiving it.
In a world flooded with digital messages, cutting through the noise and making a lasting impact is essential. Preventing churn and building loyalty is no longer about offering better rates or flashy promotions — it’s about consistently delivering value at every touchpoint.
So how can banks stand out and foster true loyalty? Here are a few strategies to boost customer satisfaction, build trust and drive deeper connections that support banking loyalty long-term.
1. Pay Attention To Onboarding
A positive onboarding experience is key to retaining customers. According to research, churn is at its highest during the first year — around 20%-25% (compared to an average rate of 11%). This makes a strong first impression crucial, as it directly impacts customer perceptions and sets the tone for future interactions. The following tips can help you start off on the right foot.
Give a Warm Welcome
Onboarding is often lackluster, but adding personal touches can make all the difference. Chase, for example, has taken a personalized approach to onboarding with a video that makes customers feel valued from the start.
The bank’s customer onboarding video is a great example. The video welcomes Jen by name and acknowledges her 9 years of loyalty — a small but impactful detail that makes her feel seen and appreciated. Then it congratulated her on starting a new business and provided personalized tips to help her navigate banking with Chase for Business.
Something as simple as greeting your recipient by name can spark their interest and encourage customer engagement. Plus, personal details show your customers they can expect 1:1 interactions from your business in the future.
Putting your personal message in a video adds a human touch. Hearing a friendly voice or seeing a smiling face — plus engaging (and clear!) graphics — go a long way in making the banking experience less robotic and more inviting.
Make It Quick
A digital-first approach can make for a paperless process. But banks can do more than move forms online — they can also cut down on the forms required for the onboarding process.
To keep the process smooth and efficient, banks should take advantage of technology to remove unnecessary friction. For instance:
- Automatically pre-fill forms with previously entered information.
- Use e-signatures to eliminate the need for scanning physical copies.
The less time customers spend onboarding, the happier they’ll be with your business. A hassle-free start increases the likelihood of long-term loyalty and ensures that your new customers are fully aware of the value you add to their lives.
Pro tip: Filling out paperwork can be a drag and, in the worst cases, even confusing. An Interactive Video, on the other hand, is engaging and can provide clear, helpful instructions for respondents.
2. Make Money Matters Less Confusing
Over half of U.S. adults feel anxious about their finances, and complex terms and processes only add to that stress. Fortunately, there are ways to simplify the conversations around money so that both new and existing customers feel more at ease.
Timing Is Everything
A well-timed message can make your customers’ financial journey a lot easier.
Use customer data to create and automate messages that deliver the right information at the right time. For instance, by monitoring when a customer’s plan is set to expire, banks can send out a helpful reminder in advance so they’re not caught off guard. It’s exactly what Zurich did with the Personalized Video below.
This proactive approach not only reduces potential issues in the future that may be costly and frustrating but also shows customers you’re willing to go the extra mile and offer true personalized service.
Pro tip: Thanks to artificial intelligence, video production is now much more accessible. Whether you need one or one million videos, our AI video creator, Lucas, can help you generate dynamic, personalized content that elevates your communications.
Don’t Let Rewards Go To Waste
Loyalty program rewards can be great incentives for customers to stay. Cashback is among the most popular, with over 41% of U.S. adults saying it’s their favorite. But even the best incentives lose their appeal if they’re buried under complex rules or confusing redemption processes. A complicated program or an unclear offer is more of a hassle than a bonus for customers.
To make rewards valuable, they need to be easy to take advantage of. Clear communication is key. Make sure customers know how to access their rewards and what they can redeem them for. Remind customers of the value you bring, just as Navy Federal Credit Union did in the year in review below.
Every customer received a video recapping the total points they earned over the year. Even more convenient, videos featured the special perks available with their unique points balance. With the information relevant to each customer, year-in-review videos quickly capture attention while also demystifying the rewards process, increasing overall engagement.
Be Visual
Visuals are incredibly powerful in breaking down confusing terms and complex policies. It’s science — our brains can process an image in a matter of milliseconds.
Acorns, a fintech app for investing, is one example of a business that simplifies complex financial terms through visuals. The app uses user-friendly graphs and animations to give users a clear picture of their investments.
The brand leverages visual learning outside of its mobile app, too. Their YouTube channel features various explainer videos that break down topics from stock trading to high-yield savings accounts to help viewers reach their financial goals.
At the end of the day, when customers feel informed, appreciated and in control of their money, they’re far more likely to stick around.
Don’t Forget About Customer Service
As customer behavior shifts towards a preference for digital communications, it’s clear that the banking industry needs to also offer digital customer service options. In fact, digital chat adoption doubled from 2021 to 2022.
While customers still appreciate speaking with a live agent for more complex matters, they increasingly turn to chatbots and digital resources for quicker, straightforward assistance.
Rather than seeing digital tools as a replacement for live agents, think of them as a supplement to your customer support center. Online resources can handle more basic issues and allow your agents to focus on more complex problems. For instance, chatbots can evaluate the complexity of a customer’s question, collect basic information and route users to the right expert.
Interactive Videos are another great option, allowing customers to self-serve in real time. Check out the video below as an example.
This Interactive Video was created to help mortgage companies answer their customers’ questions about the end of their forbearance period. Viewers can use the chapter markers to get to the information they need straight away and click to learn more about their different payment options.
We’ve seen how well this kind of content works. Interactive Videos have increased call deflection by 73% in the mortgage space.
Ultimately, by blending digital efficiency with human expertise, banks can offer a customer service experience that meets modern customer expectations: convenience without sacrificing the personal touch that builds long-term trust.
3. Take Inspiration From Innovators
Fintech is driving innovation in the financial services sector. They’re doing more than moving the banking industry online — they’re transforming it. For traditional banks to stay relevant, it’s critical they pay attention to what fintechs are getting right.
Be Omnichannel With In-App Messages
Today’s customers communicate on a variety of channels. Younger generations are especially omnichannel — 87% of millennials and Gen Z prefer omnichannel communications. Fintechs appeal to this by engaging with customers on all of the platforms they’re using — whether it’s email, in-app or social.
In-app communication is especially important. But while the number of consumers actively using mobile banking has surged by 18%, only 65% of banks provide a mobile app experience.
Filling that gap are fintech brands, who offer push notifications and other in-app communications that meet customers where they are. By leveraging data analytics, these companies send timely, relevant updates that enhance the customer experience — whether it’s a low-balance alert, a savings milestone or a security notification.
Make It Fun
Fintech companies are not only making banking easier but also more enjoyable. Take Venmo, for example. Users request or make payments to others and can include a witty emoji, GIF or message. A new feature allows users to even gift-wrap payments for special occasions.
The social aspect turns what was once a mundane task into a fun, shareable experience. And when users enjoy something, they talk about it, driving word-of-mouth referrals that boost adoption.
This especially appeals to younger generations. For them, the web is where they find entertainment — and if they’re to bank online, it needs to be just as satisfying as the rest of their digital experiences.
Gamification is another great way to make finances fun. Many fintechs offer special rewards and badges for meeting certain milestones, such as reaching savings goals, paying down debt or making smart financial choices.
Banking solutions looking to stay competitive can incorporate similar gamification elements, encouraging users to interact with their finances in a way that feels more like a game than a chore.
By combining engagement, convenience and a little fun, fintechs have reshaped the financial landscape. Traditional banks that take note — and take action — will be better positioned to thrive in this new digital-first world.
4. Focus on Trust and Transparency
When it comes to finances, trust and transparency are everything. A single misstep — whether it’s hidden fees, poor communication or a data breach — can send customers looking for alternatives.
Customers want to know they can trust a bank with their most important assets. But trust is built on a close emotional connection between customers and businesses. How can that be done through a screen?
Build Trust When It Matters Most
Customers want to trust you at every stage of their financial journey, but it becomes especially important when they run into issues. How a bank responds during tough times can make or break customer loyalty.
For instance, the beginning of the pandemic was a time for banks to prove their trustworthiness. Uncertainty was high, and financial stress was a major concern for many. Banks that honored late payments, provided great customer service and helped with other financial issues showed customers could rely on them.
On the other hand, failing to help your customer base during a time like this can destroy their trust in you. After all, it’s when they’re facing challenges that customers are most sensitive.
One example of a company that got this right is Bupa, which created a Personalized Video message to proactively address concerns about how it would handle disruptions caused by COVID-19.
This level of transparency reassured customers, demonstrating empathy and a commitment to clear, open communication. It’s a model for how banks can strengthen relationships, even during uncertain times.
Be Upfront
Nothing ruins customer trust more than a false or over-inflated promise. Upselling or cross-selling additional services that cost more than you’ve led on, unexpected fees and other unwelcome surprises show your customers that you don’t have their best interests at heart.
Post on
To build trust, you should make sure customers are explicitly aware of the terms and conditions before signing an agreement. This includes being upfront about any associated costs, fees or potential rate changes. When it comes to recommending additional services, only offer what’s truly of value. These are the kinds of small steps you can take to make a big difference.
Additionally, transparency isn’t just about financial terms — it extends to how banks communicate in general. A recent Morning Consult survey revealed that “protection of data” is the most important factor in consumers’ decision to switch banks. Banks that communicate their security measures and data policies can ease customer concerns and strengthen trust.
At the end of the day, trust isn’t built overnight. It comes from consistent, honest and customer-centric initiatives. The financial institutions that prioritize transparency, listen to customer feedback and show up for their clients — especially in moments of uncertainty — are the ones that will earn lasting loyalty.
Creating Lifelong Banking Customers
Today’s customers want their banks to be more than somewhere they can put their money. They want a financial partner — one that can help them reach their financial goals, provide a seamless experience across channels and, most importantly, be worthy of their trust.
Personalization plays a massive role here. Research shows that the degree to which consumers feel their bank personalizes services strongly influences their loyalty and advocacy. In fact, there’s a 123-point difference in NPS between customers who feel their bank truly knows them and those who don’t.
Customers that trust their banks with their money also trust them with their data. But that means that they expect their information to be used to enhance their experience, from tailored offerings to proactive service and seamless digital interactions.
With competitors rolling out innovative solutions at a rapid pace, banks that want to stand out must embrace new ways to engage their clients. Our Next Generation Video Platform allows banks to wow their customers with the latest in video technology. Personalized, interactive and contextual — the next generation of video is revolutionizing businesses’ digital comms.
The future of banking is innovative, engaging and personal. Are you ready to bring your digital comms strategy to the next level?
On the other hand, failing to help your customers during a time like this can destroy their trust in you. After all, resolving issues is when customers need you the most.
