A recent study of the results from banks’ consumer engagement efforts suggests that while many customers are satisfied with their bank, they may not have a personal connection or deep trust in that financial institution.

While community banks and credit unions often point to customer relationships to distinguish themselves from large banks and fintech competitors, a recent study found that only about half of consumers said their bank or credit union tried to engage with them to understand their needs. 

Amid signs that consumers and small businesses still want human interactions with their primary financial institutions, despite the move to online and mobile banking, some banks and credit unions have shifted resources toward relationship banking initiatives, according to a study from software firm Engageware. 

“That was really promising to see more attention and mention of programs that credit unions and banks are putting into place or expanding upon [their] investment in building relationships,” said Caroline Platkiewicz, senior marketing manager at Engageware. 

For one Massachusetts bank, investing in relationship banking has touched multiple aspects of the bank, including staffing, training, infrastructure, branch design, technology and branding. 

“We did a whole new rebranding using ASB and changed it to ‘A Solutions Bank,’” said Cheryl D’Ambra, executive vice president of the retail division at Athol Savings Bank. “Those are three little words, but man, you’ve got to stand up behind them because customers will surely remind you that you don’t have a solution for me as quickly as those words are up on your signs.” 

A Vulnerability for Banks 

It’s not as though banks are staring at the imminent prospect of customer revolts. Several studies have shown that a majority of customers are satisfied with their primary financial institutions. 

Engageware, a Massachusetts-based software company that provides customer engagement tools for financial institutions and other industries, found in a recent survey that 78 percent of consumers were satisfied with their current primary financial institution and the support received from that institution. 

Other studies also suggest customers are satisfied with banks. The annual finance study from the American Customer Satisfaction Index found that regional and community banks scored 80 on a 100-point scale, ahead of national banks, with a score of 77, and super-regional banks, which scored 76. Credits unions did drop year-over-year in the 2022 study from 76 to 75 points.  

But Engageware also found that banks and credits unions did not engage as much with consumers, with 54 percent saying their bank or credit union tried to engage with them to understand their needs, and 43 percent saying they have a contact at the bank or credit union to talk to when they need answers to financial questions. 

“Personal connection and human trust are still largely missing from today’s banking interactions, implying that consumer satisfaction may be resting a little bit more on shallow ground than what most financial institutions would like to see,” Platkiewicz said. 

Other studies have also shown that customers want additional support and engagement from their banks. J.D. Power’s 2022 U.S. Retail Banking Satisfaction Study found that 78 percent of survey respondents said they would stay with their bank if it delivered support during challenging times. But the study also found that only 44 percent of banks provided this type of support. 

Small businesses also want support from their banks, according to another J.D. Power study. The U.S. Small Business Banking Satisfaction Study found that 76 percent of small businesses wanted financial advice from their bank, but only 15 percent of businesses received comprehensive advice.  

Priority Shift Seen 

Engageware, which also surveyed banks and credit unions in addition to consumers, did see a shift in priorities for financial institutions that suggested an increased focus on relationship banking. 

While 2021 saw financial institutions overwhelmingly put resources toward digital solutions and online banking, Platkiewicz said, banks and credit unions in Engageware’s most recent study pointed to increased investments in strategies around building relationships, including one-on-one interactions between staff and customers. 

Relationship banking relies on employees, and Engageware’s study also found that staffing remained a top concern for banks and credit unions. More than half of banks and credit unions identified staffing needs as the top priority for delivering strong customer engagement. 

Just as financial institutions have invested in consumer-focused technologies, Platkiewicz said banks and credit unions should prioritize digital tools to support and retain employees. 

“The more that an institution can wisely invest in technologies that are seamless for employees to use and instill a level of confidence in employees that they are conveying accurate, consistent and up-to-date information to their member base will certainly help and go a long way in retaining that staff and setting them up for success,” Platkiewicz said. 

She added that banks and credit unions should consider customer engagement based not only on the number of products customers hold with the institution, but also on the various channels they use when interacting with the institution. Employees should have a role in supporting customers through various channels, Platkiewicz said, adding that data and analytics could help banks and credit unions understand how to use their resources throughout these channels. 

“There needs to be a blend of digital to meet the convenience that consumers want and that easy access that they want to their financial institution’s products and services from the ease of digital devices,” Platkiewicz said. “But banks and credit unions need to do a better job of incorporating their existing staff and know-how and serving that up through digital interfaces.” 

One-on-One Solutions 

When Athol Savings Bank added “A Solutions Bank” to its branding more than a year ago, it had already taken steps to develop a relationship banking model. Part of the bank’s approach includes putting staff through a training program, ASB University, to prepare them to be universal bankers, what the bank calls financial advisers. 

Diane McLaughlin

Like other banks, Athol Savings Bank has started renovating its five branches with an open design featuring pods. Rather than using teller lines or having staff members sitting at desks, D’Ambra said, the bank stations an employee in the lobby to meet the next customer. The employee then works with the customer to address the reason for the visit, while also learning more about the customer’s financial situation to build a relationship and recommend other applicable products and services. 

The model requires fewer branch staff because all employees can handle most transactions, D’Ambra said, and the employees get paid more than tellers would. She added that the bank has already seen a positive effect on retaining staff since moving to this model. 

“It’s empowered them, and it’s also given them a time to grow,” D’Ambra said.  

The bank has also formed a call center, which the bank calls a “solutions center,” and plans to install interactive teller machines at its drive-up window. These will connect customers with call center staff to free up branch employees to work with customers who enter the lobby. D’Ambra added that technology has a role in supporting the model. 

“We continue to do the high-touch, but also [the] high-tech,” D’Ambra said. “We want to be sure that we have the digital services to give customers the choice to bank whatever way they want.”