Online search changes how customers choose banks

Customer search patterns and the ability to attain information in an instant is changing the way consumers choose banking products, according to a new study conducted by Forrester Consulting on behalf of Deluxe Corp.

Forrester surveyed more than 3,500 U.S. adults who had either opened a checking account, IRA, or certificate of deposit, or applied for and obtained a new mortgage, refinance, home equity loan, auto loan, credit card, or personal loan/line of credit within the last 12 months.

While recommendations from family and friends remain a key driver in checking and savings account selection, consumers prefer to research their credit card, personal loan, and mortgage needs online before deciding which products to purchase. Further, consumers want the ability to search for banking products on all mobile channels, and they want that information available in an instant.

Match what customers are used to

According to the study report, “As customer expectations rapidly rise, consumers gravitate toward companies who can deliver the best omnichannel experiences at the drop of a hat.” Banks have to continue to become increasingly agile and deliver superior customer service.

“As financial institution customers have more and more interactions with consumer brands that provide multichannel communications, they will demand those same channels when it comes to their interaction with banks and credit unions,” says Scott Wallace, vice president of marketing, Deluxe Financial Services. “We believe this survey shows that customers want multiple research channels and tools before they will engage their local branch to open a new account.”

The study indicates that while customers prefer to research online with comparison and calculator tools, the more complex the product becomes, the more likely they are to seek human interaction. For example, when completing a mortgage or personal loan application, 41% of respondents turn to the in-store option. On the other side, the prevalence of credit card options online lead to a nearly 60% completion rate digitally.

The study also found that financial institutions need tools and options to help the consumer across the entire path to purchase. For example, while customers prefer to do their own research online, they will often lean on friends and family recommendations when choosing a checking or savings product. In these instances, consumers are less reliant on interest rates and more reliant on reputation and relationships, which, these days, are often sought online in social media.

Make online information easy to find

With larger purchases like mortgages and personal loans, interest rates matter more to consumers, as do online tools to compare and contrast among options. Financial institutions that make information hard to find online will endanger their reputations with digitally-savvy consumers. At the same time, those institutions that have not optimized their digital channels for mobile and social media usage will also run afoul of tech-savvy consumers.

Among other findings from the study:

• Consumers will do their research online and with their personal connections before engaging with the financial institution.

• Credit card customers prefer to research and purchase online. The commoditized nature of credit cards makes it easier to finalize the process without speaking with a representative.

• Shorter, less intensive application processes would improve pathway to purchase for all consumers.

• Tools and calculators play a large role in decision-making.

While some parts of the financial relationship remain rooted in human interactions, as time goes by, more and more customers will seek to complete their path to purchase online. In order to succeed, the study indicates that financial institutions must:

• Collaborate across the business to deliver better customer experiences.

• Take a needs-based, not product-based, approach.

• Use digital technology to support prospects across all touch points.

• Weave human interaction and digital channels together to amplify sales.