Bank customers are concerned about security, issues relating to trust and inefficient card services, according to a study done on the basis of customer conversations on social media:
Security concerns of bank customers are posing a major challenge for the banking industry today, a study, interestingly based on an analysis of some 85,000 customer conversations during 17 months in 2021-22 on major US traditional and neobanks, has found. The study covers changing dynamics in the banking industry and presents opportunities for brands to enhance customer experience. It was conducted by Delaware-based Cooltrack, a real-time customer experience analytics platform.
The study mentions that thousands of conventional and neobank customers are taking to social media to flag off instances of poor customer service and negative aspects of various US banks. Even though neo, digital or virtual banking is on the upswing, this sector too faces many critical concerns, the chief being the much-needed trust. The customer conversations involved traditional banks like Bank of America, Capital One, Citigroup, Goldman Sachs, JP Morgan Chase, PNC Financial Services, TD Banks, Truist Financial, U.S. Bancorp, Wells Fargo, and neobanks like Albert Corporation, Bank Mobile, Chime, Current, Dave, Go2Bank, Monzo, Revolut, Sable, SoFi and Varo.
ISSUES OF NEOBANK CUSTOMERS
The study says even with the hi-tech, sophisticated and cutting-edge digital banking solutions that have transformed the offerings, customers of neobanks are facing distressing experiences in account closures. “These customers have huge problems with security, fraud and refunds and neobanks have a massive challenge of creating trust and maintaining it. This overriding factor is to build confidence around safe accounts and access,” says the study.
CARD SERVICES LAGGING
On the other hand, traditional bank customers are concerned about card services, late payment charges and higher fees. “At the same time, security was also a cause of concern. The customers are looking for better card services and a reduction in various types of charges. Another aspect of the customers includes the card balance, getting a credit increase, issuing new cards, card information, and card delivery,” finds the study.
In the case of neobanks, 92.42% of the 3270 customer opinions about ‘Account Closures’ represented a terrible customer experience. Customers are shocked when they suddenly get a message saying their account is closed or deleted.
Around 73.07% of 3412 customer opinions about ‘security’ was negative, highlighting blocked accounts, resetting passwords, more vigorous verification checks and security guidelines.
And 93.40% of 3123 customer opinions relating to ‘fraud’ spoke about their money being stolen, fraudulent transactions, scams and fraudulent cards in their bank accounts.
As much as 79.73% of 1865 customer opinions about ‘currency exchange rates’ were positive. This development is because traditional banks have a higher exchange rate than neobanks, indicating a growing appetite for mobile banking.
As regards traditional banks, card services are the biggest concern for customers. Of 6505 customer opinions regarding ‘card services,’ 58.20% have expressed a negative customer experience. Some customer concerns include automatic lowering of credit limit, not increasing credit limit and dropping credit score.
Around 82.43% of 3495 customers who spoke about ‘extra charges’ are unhappy due to the high amount levied as late fees, overdraft fees, maintenance fees, cancellation fees, insufficient fund fees and other services fees.
Traditional legacy bank customers claim that banks block their clients from performing international transactions. The number of opinions is low for conventional banks and high for neobanks, indicating that neobanks are preferred for convertibility.
Some 70.89% of 3016 customer opinions about ‘security’ was negative, highlighting denied access to their accounts, locked accounts, high-security checks restricting them from login, resetting passwords, more vigorous verification checks, and malfunctioning fingerprint recognition.
Cooltrack, which analyzed the customer conversations and reviews, says the banking industry urgently needs to focus on a customer-centric approach to address the mounting concerns and satisfy many unmet needs of multi-generation customers. “Changing consumer needs are crying for ‘Customer First’ demand to rectify deficiencies in banking services,” it adds.
SOME KEY OBSERVATIONS
Some of the other key takeaways from the report are:
- Traditional bank customers who have seen higher convenience in neobanks, prefer to experience the same in traditional banks. Neobank customers expect the highest performance of their apps as they want to do the transactions in a few simple clicks.
- Banks need to invest in improving the customer experience, with convenience on top of the mind. Providing multiple options, seamless and easy experience is crucial in satisfying today’s customers.
- Consumers are making decisions about their banking partners based on app performance. Consumers are demanding enhanced mobile banking apps and hence banks need to make mobile apps an experience, not an add-on.
- Traditional banks need to focus on app performance and response time while neobanks should strengthen their offerings on security, software updates and call support.
- While consumers increasingly accept neobanks, they continue to trust traditional banks. And traditional banks need to focus on offering better card services and reducing the charges. Neobanks on the other hand, need to build much-needed trust.