Why banks need better communications during the cost-of-living crisis (Andrew Stevens)

A recent story revealed that thousands of bank customers are at risk of losing out on cash after being told to “call NOW or miss the best rates”. While lenders are generally expected to pass on any information about raised interest rates automatically, customers are now being asked to reach out about these changes themselves. This was shortly followed by the news that the Bank of England has recorded historical rises in interest rates. This means that customers may be earning as much as 1.5% less than they deserve. In other words, bank customers are potentially losing out on thousands of pounds. And, amidst a cost-of-living crisis where disposable household income is on course for the largest drop (2.2%) since recording began, this could not come at a worse time.

This news is a stark reminder of the importance of banks’ implementation of effective communications strategies. Customers shouldn’t be expected to know how to ‘claim’ new interest rates, or have to go out of their way to ask for guidance. Customers are reliant upon banks as experts in their field, and so they expect their banks to proactively communicate changes like these.

It is crucial that banks are reminding their customers to get in touch, and are sending these reminders via the right communication channels. For instance, if a customer has opted to receive communications via post, updates sent to them via email or phone are likely to be ignored or left unread. Customers who end up losing out on new rates as a result of this will become frustrated and, given that many can’t afford to miss out on such savings in these times, it’s highly likely that they will seek alternative banks who will listen to their communication preferences.

Bank switching was already an issue prior to the cost-of-living crisis. The Current Account Switching Service (CASS) found that, in 2021 alone, 782,223 customers switched their UK bank accounts. Bank switching is especially prevalent with younger customers, as many wish to move to mobile-based digital banks. Undoubtedly, a large motivation in this transition is because younger users prefer the communication channels provided by these challengers.

Ineffective communications, and the frustrating situations these create, will only lead to even higher rates of dissatisfaction and more customers leaving their banks. And, at a time where over a quarter of UK adults (27.7 million) are facing low financial resilience and are extremely concerned about saving money, many customers will not think twice about moving to banks that proactively offer them better rates on the channels they prefer.

It is only by providing consumers with the information they need, over the right channel and in good time, that banks can have any hope of retaining their valued customers during this challenging period. One great way to ensure that these communications are provided is by adopting a robust Customer Communications Management (CCM). A solid CCM platform can enable banks to handle, approve and deliver omnichannel communications from a single platform, which helps avoid miscommunications like the above interest rate mishap. This streamlined approach can also ensure that banks are proactively delivering these relevant communications to their customers, in a personalised manner over the channel they prefer. So, by adopting a solid CCM framework, banks can ensure their customers will feel more valued and will be less likely to switch.