Banking Customers are Nervous — Use Data and Technology to Restore Their Confidence

Recent events in the banking industry — such as the fall of Silicon Valley Bank (SVB) — have caused commotion and uncertainty among customers. Earning that trust back will take a proactive approach to managing risks in banking and improving how banks communicate with their customers.

Like SVB, banks with concentration risks — focusing their business on a certain type of company — are more likely to encounter liquidity problems when events like these occur.

This situation was more a crisis of confidence than a lack of strength or stability in the financial services industry. But many banking customers were not aware of that; they were more focused on their deposit insurance coverage through FDIC or moving their money out of the market to circumvent the volatility.

Through improved technology in banking, you can effectively communicate with internal and external stakeholders to navigate these situations, use data to get ahead of customer impact, and unite your teams to build customer confidence.

1. Be transparent with your stakeholders

Transparency is critical during a crisis, helping you with managing risk in banking. While things are operating normally, take the time to get to know your internal and external stakeholders. Personalizing your interactions with stakeholders helps build a stronger relationship with your customers, create deeper trust, and ultimately, retain your customer base if something goes awry. 

Take the time to get to know them regularly so you can know how to best communicate with them. Need to respond to a crisis in real time? This upfront knowledge will help you quickly segment your customer base, identify anyone at risk (like VC-based companies, in the case of SVB), and assure them that you’ve got the situation under control. 

“Being transparent also helps you offer guidance to customers who need to be educated on market volatility immediately while keeping other customer worries at bay,” said Amir Madjlessi, senior director and banking industry advisor at Salesforce.

2. Getting a clearer view of analytics helps with managing risk in banking

As mentioned above, focusing on client relationships can improve retention rates and reduce churn. But that’s just one part of managing risk in banking. You can use your data to segment your customer base and follow their customer journeys. This can help you spot potential issues before they bubble up into a crisis. 

Data and technology in banking can help you manage risk and relationships. Through a unified customer data system, you can get a more complete view of customers and their journey, allowing you to maintain a healthy book of business. 

Data and analytics tools can help you quickly determine customer attrition and deposit flows by different segments and if there is a “run on the bank.” 

“Analytics can help you get at-a-glance information to see the impacts on client financial plans and portfolios, how they are performing, and increases or decreases in volumes that could lead to retention issues,” Madjlessi said. 

You can also delve into where the credit, interest rate, or concentration risks exist — and create mitigation plans to address these potential situations. Using a unified data platform to monitor these key metrics can help you with managing risk in banking.

3. Improving technology in banking can help you communicate faster and easier

Operational agility can help banks act swiftly and make smarter decisions if market volatility arises. Instead of relying on a mix of platforms, uniting conversations, knowledge sharing, and decision-making in one spot can help eliminate confusion during a crisis — and lead to improved productivity in healthy times.

When you create a data culture and have all necessary data in one place, you can easily bring together alerts, teams, and conversations. You can also align on issues, reach decisions quickly, and search and share knowledge. 

One central location for processes and communication can also help with automated workflows and faster case resolution. In a crisis, the right technology in banking allows huddling and swarming as a team to discuss what is happening. You can also discuss client impacts, agree on a consistent communication message, and escalate the situation if needed.

How banks can improve customer service and increase confidence

You can improve managing risk in banking by responding quickly to concerns, but also by making sure that you’re keeping customers happy and confident throughout financial ups and downs. 

“Banks can consistently remind clients of the value they provide,” Madjlessi said, “not just in times of crisis but throughout the entire customer lifecycle.” 

Better technology in banking can help you: 

• Be a welcoming place for clients to come to learn. Understand what’s happening in the market to calm emotions so customers avoid making rash decisions regarding their accounts and portfolios.
• Proactively respond to clients’ needs. Provide transparency and personalized engagements to build trust in your current customer base. Create supportive relationships so customers don’t have a canned experience.
• Use technology in banking to help automate processes and scale. Gaining a unified view of your customer data can help create actionable dashboards, monitor customer segments, and help with managing risk in banking. 
• Improve your onboarding processes. Speed matters, especially when you’re trying to gain customer confidence. A smooth onboarding process can make all the difference to customers looking for a more trustworthy banking experience.