According to an American Banker article titled “Ladies First: Why Women Are the Key to Relationship Banking”, 95 percent of women are the financial decision makers in the household. Being a millennial with a mother who was the financial decision maker in our household, I’m not shocked by this statistic. However, after conducting more research around women and banking, I found that banks are underserving the female segment, and missing out on greater revenue generation and growing their customer lifetime value.
If we use the Facebook definitions for relationship status, we’d have to label a bank’s relationship with women as “It’s Complicated”. However, by strategically targeting and actively engaging with female customers using the latest technology, banks can very likely change their relationship status from “It’s Complicated” to “In a Relationship” or even “Engaged”.
While I am not an expert on the inner workings of the female brain, I can tell you that men and women have different perspectives when it comes to managing their money. The American Banker article also mentions that 60 percent of men lack confidence in their primary bank understanding their financial needs. They will leave a bank for multiple reasons, including raised fees and rates. Women, on the other hand, prefer to have personalized, engaging relationships and will stay with a financial institution if they feel a connected relationship with them. If financial institutions take the time to develop this type of relationship with their female customers, banks’ revenue and customer lifetime value go up.
In Pega thought leader Scott Andrick’s white paper, The Top Ways to Maximize Customer Lifetime Value in Financial Services, he explains that the biggest reason people either open or close accounts is due to the experience they have with the financial institution. This is especially true for women. Women will choose to stay with a bank if they feel they are being rewarded for their loyalty and that the institution has their best interests at heart. It’s the value of the customer experience—rather than lower fees or speedy transaction times—that are the biggest priorities for women when it comes to doing business with their bank.
So, how can banks deepen their relationship with women using digital enterprise technology? Here are a few recommendations:
- Understand and capture what the female customer wants from their banking relationship using technology that compares these attributes and interests with your business goals in order to deliver the perfect action specifically for that individual customer.
- Streamline service and personalize the experience using intelligent processes that automatically adjust to optimize the interaction across all channels, without loss of context.
- Capitalize on cross-sell/up-sell opportunities using sophisticated analytics to focus on the immediate needs of your female customers and deliver personalized, one-to-one marketing.
- Make analytics actionable by leveraging predictions of customer behavior and responses during customer interactions. Using real-time decisioning, you can deliver highly relevant offers at the moment of greatest customer receptivity, tying them to rewards programs to encourage even more offer uptake and long-term loyalty.
With the backing of an agile digital enterprise system, banks can achieve the growth needed in the female market both now and in the future. The sooner banks invest their time and energy in serving us, the sooner their relationship status can change for the better.