Gain and retain members or customers in a competitive financial services environment by providing frictionless engagements. Building consistent user experiences and making it easy to engage with your financial institution across all channels, in person and online, demonstrates your value to your members or customers, and emphasizes that you understand that their time is valuable.

In this white paper, we’ll cover the following
key considerations when evaluating your enterprise financial institution, and how you can gain and retain your member or customer base using the next stage of customer engagement.



1.0 Why is it important to prioritize member & customer experience?

2.0 How digital and physical engagements help the bottom line?

3.0 Considerations for an acquisition & retention strategy using personalized engagements

1.0 | Why is it important to prioritize member and customer experience?

According to Forrester Customer Experience Index online survey, when brands deliver a high-quality experience by communicating clearly, their customers are nine times more likely to spend more with them.

Last quarter, we created several white papers about the importance of humanizing banking by way of better customer experience. In those reports, the evidence pointed to the fact that members or customers who feel valued stay, spend and advocate on behalf of your financial institution. Combined with the fact that barriers to entry are crumbling and the increase in digital-only banking is dialling up the pressure on experience, traditional banks and credit unions must use every available tool to not only keep their existing members or customers, but attract new ones in an increasingly competitive marketplace.

Triggered by branch closures and service reductions due to COVID-19, many bank and credit union customers and members are reconsidering their relationship with their financial institution – they want to bank in a way that is convenient and comfortable for them. Not to mention financial institution leadership is evaluating their branch network strategy and the evolving roles of physical locations versus the omnichannel nature of digital. Even before the pandemic, US bank branches have decreased by 2% every year since 2009. Members and customers still want access to branches but they don’t require the same level of branch density as they don’t visit as often – even still, most members or customers want a branch within 15 minutes of their location.

A phenomenon at play for banks and credit unions with an established and high density branch strategy is the “network effect” whereby large networks capture a disproportionate share of market deposits. For example, an eight branch network captures more than twice the deposit volume of a four branch network, which in turn captures more than twice than that of a two branch network. This has been a basic tenant of many financial institution strategies for keeping existing members or customers and growing their base – open up many locations in a localized area and saturate the market. Even as expectations and methods of engaging change, this network effect still holds true – creating and maintaining awareness and consumer confidence helps to secure your existing member or customer base. It also demonstrates the importance of having convenient and frictionless ways to engage your members or customers at each location, as well as understanding the analytics and data points to manage operational costs and capitalize upon your existing branch network. Do you know typical location foot traffic patterns in order to help smooth out peaks and valleys during the day? Which services tend to encourage the most physical appointments or walk ins, and does that align with your support structure and cost-to-value strategy?

2.0 How do digital and physical engagements help the bottom line?

Financial institutions are facing challenges for revenue growth: not only attracting net new members and customers, but retaining their existing high value members and customers and capturing additional share of wallet.

Many technologically savvy members and customers are comfortable opening new accounts and purchasing products online, the more transactional services, and as a result are attracted by low maintenance, overdraft and ATM fees provided by fintechs and neobanks.

However, in our previous research we have found that your members or customers want to be met somewhere in the middle of the digital/bricks & mortar continuum – encouraged to use digital options when low value transactions can be completed, but welcomed into their local branches when advisory and life milestone discussions need to happen. We found that the majority (51%) of individuals prefer a digital experience through a mobile app, followed by in branch at 29%, and finally a desktop digital experience at 20%. But the most interesting part is that 71% of those same respondents believe it’s important to build a relationship with bank personnel.

On average a ‘Highly Digitally Engaged’ consumer has 4.4 products with their main bank compared to only 2.7 for the ‘Digitally Unengaged’. Digitally engagement correlates with more products per member or customer, improving retention rates. (Reference)


2.1 Attracting new members or customers

Historically, financial institutions relied heavily on physical locations (and the signage, branding and foot traffic it promoted) to create awareness of their offerings. As the reliance on visiting branches has decreased, financial institutions now have to place more emphasis on marketing to potential members or customers outside of the branch itself. Locations can’t simply exist to service existing members or customers, but need to be refocused to act as a marketing beacon for the larger unpenetrated market. Novantas has found that the primary checking purchasing drivers in 2019 were branch sourced at 43%, followed by marketing and branding at 38%, and digital at 11% (the remaining comprising ATMs and others). By 2024, they estimate that marketing will be the source of 50% of purchases, followed by a distant 23% from branches and 19% from digital.

According to Novantas SalesScape Comparative Analytics Survey, fielded September 2020, increasing new bank customer acquisitions was viewed as a top priority from nearly 30% of respondents. Compare this with the fact that 14% of recently surveyed bank customers and 8% of credit union members stated they were likely to switch their primary bank in the next six months.

Naturally, the size of the financial institution helps dictate the acquisition strategy – national players can rely on strong brand awareness and can funnel operating costs from underperforming branches into digital marketing and targeting efforts. 11% of financial institutions surveyed recently stated they plan to close branches to reinvest in new formats, with a further 37% planning to expand their reach through an increase in marketing investments, and 34% expecting to merge or acquire another bank in 2021.

Larger regional banks will need to focus on key growth areas with current low penetration rates, likely pulling some investments out of highly dense areas to reallocate.

Community banks and credit unions will likely need to become laser focused on underserved segments of their local markets and double down on messaging and marketing that will help win in those very specific niche member or customer segments.

What should be obvious with member and customer acquisition strategies is the reliance on data, understanding the performance of individual locations, and how prospective members or customers want to engage with your brand. Are you able to track the walk-ins of individuals who are not yet members or customers at each location? Can you definitively state the best digital sources of high value engagements with prospects? Do you make it simple for potential members or customers to book an introductory appointment with a knowledgeable staff member over video conference? If not, these foundational engagement tools must be in place in order to establish baseline metrics and begin the member or customer experience evolution at your financial institution.



The latest Acquisition IQ data from Novantas show the while banks that left spend on (relative to peers) didn’t see a meaningful gain in acquisitions at the beginning of the pandemic, they did see a gain once we hit a “new normal” in the early summer. (Reference)

2.2 Keeping existing members or customers & growing share of wallet

Banks and credit unions need to get more sophisticated in how they segment their existing base, in order to focus attention, resources and engagements appropriately. Ideally, FIs will know, through data, buyer journey tracking and predictive analytics, how each cohort of members or customers behave in order to personalize engagements and encourage certain behaviors.

Targeting a current customer has a 60-70% chance of converting, whereas the likelihood of converting a new customer is just 5-20%.

Every financial institution leader understands it is absolutely pivotal to keep existing members or customers (after all, it’s much cheaper to retain your existing base than to acquire net new).However, increasing the share of wallet is key not only to help with revenue generation but also to decrease churn. And with half of Americans using more than one financial institution, financial institutions like yours need to quickly demonstrate your value through exceptional member or customer experience, convenience and flexibility. Younger demographics are more likely to work with multiple FIs and roughly half are willing to switch for those that can serve them more conveniently.

So why is the share of wallet so important? It mainly comes down to the ease of collecting incremental revenue from happy and engaged members or customers. Bain & Company found that a 5% increase in customer retention produces more than a 25% increase in profit. But in order to create the right conditions for capitalizing on these strong relationships, banks and credit unions need to become the “primary financial institution,” or PFI, for that individual. The more products a member or customer has with their PFI, the longer the relationships tend to be, and the more likely they’ll consider that institution for their next product.

A PwC report found that financial institutions are typically only dealing with 10% – 20% of a customer’s wallet – with best in class banks and credit unions securing up to 60%. Anything your financial institution can do to increase this proportion, particularly in the form of excellent member or customer experience through convenient engagements, simply adds dollars to your bottom line.

US customers have an average of 8.5 banking products across their various FI relationships, while Canadians have 7.1. (Reference)

The timing between positioning solutions to your existing members or customers also plays a big role in the success of cross selling and upselling – members and customers are more likely to expand their relationship with a bank or credit union “when a previous transaction is still fresh in their mind” – an approximate close rate of 25% one month after initial purchase. In that same PwC report, after nine months the conversion rate of offers to existing member customers closed at the same rate as new customers (under 5%).

80% of future profits will come from 20% of existing customers.

2.3 Inoculation against competitors

FI leaders know the highly competitive state of the market: neobanks, fintechs and other more traditional competitors are vying for members and customers in a consistently escalating battle. Inoculating your existing base against offers from your competition becomes a careful selection of reasonable fees and rates, personalized products and convenient ways to bank. The duration of the relationship between member and customer and their financial institution is a function of the depth and perceived value derived from that relationship. PwC has estimated that customers with one product typically stay for 18 months. As more solutions are sold to that individual (presumably due to increased perception of value and usefulness), that duration can be increased to seven years for three or more products.

The other part of keeping your base secure against the competition is your members or customers’ perception that you’re doing what’s best for them, not just what’s best for you. This trust and member/customer advocacy is a key driver of loyalty and future purchase intent as uncovered by Forrester. According to that report, financial institutions that prioritize customer experience through trust, emotional connections and feeling valued:

  • keep operations and engagements simple and convenient
  • act benevolently (towards customers and their communities)
  • are honest and open with communication and
    continually build trust by helping their customers improve their financial well-being

And it pays off – emotion, how members or customers felt about the experience, was the key differentiator between various financial experiences. This differentiation is necessary to stand out from the increasingly homogeneous crowd of financial institutions. 30% of US online adults agreed that “All banks are basically the same” with a further 32% stating they were neutral. It’s even worse in Canada where 47% of Canadians felt that all banks were the same, according to another Forrester study.



Customers who rate their financial services firms high on customer advocacy are more likely to consider those firms for future purchases — while firms whose customers rate them lowest for customer advocacy have the fewest customers who would buy from them again. (Reference)

3.1 Cultivate a member or customer-centric mindset

Your members or customers have preferred channels, what we call ‘channels of comfort’, that vary individual to individual, and can change based on the query they are trying to resolve. These channels include mobile apps, call center support, social media, ATMs, phone appointments, video conferences and face to face meetings in branch, with most individuals using between three and four channels.

A recent report by The Financial Brand revealed that 75% of financial institutions prioritized enhancing the digital experience for customers as the primary strategic objective for 2021. As the competition across the financial services industry increases, member or customer experience has become a key differentiator between organizations. One of the biggest barriers to providing a great experience is a frustrating customer journey – often financial institutions don’t actually know which parts of their digital experience work well, or don’t.

Too often banks and credit unions only track behaviors, not the entire journey, and therefore can’t make a clear delineation between one bad experience and potential future actions. It doesn’t matter how great your branch advisors are if your member or customer shows up with a bad taste in their mouth, thanks to an awful scheduling experience. We released a digital transformation guide that walks financial institutions through the steps needed to improve member and customer experience utilizing self-service workflows and personalized engagements.

The best bank and credit union marketing should always demonstrate that people-first approach – successful FIs “put the person at the center and look at that human with all their complexity, their needs, motivations and pain points.” (Reference)

3.2 Identify and understand your member or customer segments

Not all prospects (and members or customers) are created equal – in order to allocate resources and efforts to the individuals with the most potential to become high value members or customers, financial institution marketers need to identify the key member or customer segments, and then understand how to best engage with them.

For example, for “relationship oriented customers” Novantas recommends providing these individuals with messaging around convenient experiences, relevant touchpoints for longer-term conversations, white-glove serve and fair rates. For those who have few products with their FI or are price sensitive, they recommend adding solutions through deepen conversations on purpose and goals. The cost of finding a new member or customer can be between 3x to 25x more expensive than cross selling to your existing base.

You’ll need to review and redesign your digital journey to one that truly provides a differentiated banking experience – UX design and consistent messaging, regardless of channel, ensures a higher engagement and a better experience. But it’s not just about the branded, slick wrapping around the journey – the actual tasks and steps that your members or customers and staff must take in order to complete that journey must hold up as well.

For example, review how a prospect would find information on opening up a new business account on your website – what steps do they need to take compared to those within your mobile app or within a branch? What about if they were to call into your contact center? Consider if this is a solution that can be supported via digital channels, instead of in person – how simple is it to do the required action online?

And finally, how do you capture the behaviour and analytics of these journeys to determine which digital marketing channels are driving the activities that end with sales? At the end of the day, everything a marketer does should help either control costs, increase revenue or both. Read more about digital marketing channels for financial institutions in our recent blog post.

3.3 Adopt Technology to Create Omnichannel Touchpoints

Your members or customers expect that their digital interactions with your brand will be seamless and convenient: whenever and wherever they’d like. Delivering digital experiences requires you to minimize friction, maximize convenience and ensure that every encounter is tailored and personalized to meet individual needs in real-time.

With growing member and customer expectations in our digital world, companies are re-focusing their efforts on improving member and customer experience. Of the 50 largest banks, 75% are pledging a customer experience transformation, according to a McKinsey report. Customer experience and customer service go hand-in-hand, and anything less than optimal service is costing companies billions of dollars. In fact, a study revealed that banks could lose more than $30 billion in revenue due to poor customer service, this doesn’t include other financial institutions like credit unions, wealth management firms, etc. This data reinforces the notion that every online interaction counts now more than ever before.

Studies show that improving customer experience requires enterprise organizations to eliminate member or customer pain and anticipate their needs while giving them more control. For example, more than 70% of millennials prefer scheduling meetings online and receiving digital reminders than booking an appointment by phone. This new generation of members and customers is defining what a brand is based on their experience with a financial institution across all touch points—online and brick and mortar locations. Firms that invest in improving the digital customer experience will reduce costs and improve efficiency while growing the bottom line.

Having an organized and holistic approach to data is the first step toward developing marketing that speaks to individual customers across channels, whether digital or in-person in the branch. This kind of connected intelligence collects data from numerous sources and distills it into actionable insights. (Reference)


Loyalty to a financial institution is more than just staying long term – it is the willingness to invest, borrow and buy more with a bank or credit union because that member or customer believes that they will be helped and find value in the relationship they have with their banks or credit. Excellent member and customer experience (meeting members or customers where they want to engage, in a manner that is convenient and comfortable for them) helps to consistently demonstrate this value and deepen the relationship between customer or member and staff.

Improving your member or customer engagement is necessary to gain and retain market and share of wallet. Engaged members and customers are key to growth in 2021 and beyond, especially considering the complete digital transformation currently underway in the financial services space. Ideally, banks, credit unions, wealth management firms and tax preparation companies will be able to bridge the digital and physical channels to create a seamless banking experience, with little friction for members or customers when they move from online to bricks and mortar, then back again. Equipping your staff, prospects and members or customers with the tools and processes they need to engage, across both digital and physical channels, encourages better, more valuable conversations, which is key to not only gaining but retaining your base in a time of unending change.

Many banks have access to data that could give them more insights into what individual users want. Even greater investment in digital services, better communication and targeted support… could strengthen current relationships and win new ones throughout this recovery and beyond. (Reference)