How To Drive Portal Engagement In Financial Services

In financial services, customer engagement can be a challenge.

With the rise of digital portals, companies hoped to streamline interactions and create more seamless experiences.

However, the reality often falls short of expectations.

Research shows that while portals are widely implemented, only a small fraction of users actively engage with them, highlighting the need for a more refined approach.

I spoke to CCO Adam to understand the state of customer portal engagement and how to increase it.

The Portal Dilemma

Despite heavy investment in digital portals, the user engagement numbers remain low.

Only 7% of people prefer receiving documents via a portal over more traditional methods like email or post, and fewer than 20% of portal users are active in any given month.

The data highlights the disconnect between the initial promise of digital portals and the reality of customer usage.

"Everyone had the same sort of idea [about portals], and the sheer volume of those portals we’ve all been given access to means we either have to split our time across several different places, or we don’t engage so much."

— Adam Byford, CCO, Beyond Encryption

This aligns with broader societal trends.

A study by J.D. Power found that only 32% of retail bank customers are classified as "digital-only" in their interactions, with many requiring additional guidance and support.

According to Keypoint Intelligence's transactional communications research, nearly three-quarters of respondents want to decide which channels their financial service provider uses to communicate with them.

This indicates a strong preference for customer choice in communication channels, rather than a specific preference for traditional methods.

Overwhelming Choice and Fragmented Attention

The challenge of managing multiple portals and logins is exacerbated by the sheer volume of digital interfaces customers encounter.

The average consumer has 119 logins for various services, leading to fragmented attention and disengagement.

Research by LastPass found that the average business user manages 191 passwords, contributing to significant friction in digital experiences.

"People are really voting with their feet by not engaging with all those portals. The question is, 'are service providers listening?'"

— Adam Byford, CCO, Beyond Encryption

According to FIDO Alliance, 58% of consumers have abandoned carts and stopped their purchases due to difficulty signing in. 

For financial services, simplifying the user experience and reducing consumer friction is crucial.

Providing Value to Drive Engagement

To foster greater engagement, companies need to focus on providing tangible value to their customers.

Bain & Company research shows that increasing customer retention by just 5% can boost profits by 25% to 95%.

Additionally, Gallup found that fully engaged banking customers bring 37% more annual revenue compared to disengaged customers.

"Companies need to add more value to their customers if they’re going to attract them. It doesn’t necessarily mean pushing more products; it’s about adding services that save them time or money."

— Adam Byford, CCO, Beyond Encryption

The Importance of Continuous Improvement

A common challenge in financial services is the lack of ongoing refinement and optimisation of digital offerings.

Financial services firms often neglect portal updates after completion, unlike tech companies that continually optimise their platforms, resulting in outdated user experiences.

"What we see a lot with financial services companies versus tech companies, for instance, is that those loops of refinement don’t happen often, not often enough."

— Adam Byford, CCO, Beyond Encryption

McKinsey reports that banks that successfully personalise customer experiences can see a 10-30% increase in revenue and a 20-30% decrease in customer churn.

Accenture adds that 91% of consumers are more likely to shop with brands that provide relevant offers and recommendations.

Tailoring Engagement to the Customer’s Lifecycle

In financial services, customer needs and engagement levels vary significantly over time.

A one-size-fits-all approach rarely works, particularly when considering products with long life cycles, such as pensions or insurance.

"If I have a pension product that I can’t touch for 40 years, it’s unrealistic to expect me to engage with it on a monthly basis."

— Adam Byford, CCO, Beyond Encryption

Understanding the customer’s lifecycle and adjusting engagement strategies is essential.

By delivering personalised content that aligns with a customer’s changing priorities, companies can maintain relevance and foster long-term relationships.

The Role of Regulation and Technology in Driving Change

Regulatory frameworks like Consumer Duty play a significant role in pushing financial services towards improving their digital offerings.

The FCA's Consumer Duty requires financial firms to deliver good customer outcomes by enhancing data strategies and metrics to better understand customer needs and behaviours across all digital channels, enabling more personalised services.

Technological advancements, particularly in AI and machine learning, offer new opportunities to enhance engagement.

Accenture predicts that AI will add £1.2 trillion in value to the financial services industry by 2035.

"Through personalisation comes greater appreciation and engagement, because it feels like it’s content that is talking to me and not just delivering generic information."

— Adam Byford, CCO, Beyond Encryption

Balancing Choice and Simplicity in Communication

Financial services companies must strike a balance between offering choice and simplifying the customer experience.

FICO indicates that 65% of consumers prefer a mix of digital and human interactions with their bank.

Similarly, Salesforce reports that 76% of business-to-business (B2B) customers expect consistent interactions across departments, underscoring the need for an omnichannel strategy.

"Offering choice is important, but not to overwhelm your customer with too many options."

— Adam Byford, CCO, Beyond Encryption

Measuring Success and Looking Ahead

User acquisition numbers should not be the North Star for portals.

True success is measured by a combination of metrics, such as return visit rates and feedback scores on the quality of interactions customers have when they log into a portal.

"Simply registering a customer to use your portal is not enough. What’s important is understanding how often they return and what they’re doing when they’re there."

— Adam Byford, CCO, Beyond Encryption

AI and machine learning are poised to revolutionise portals, making them more personalised and intuitive.

A survey by The Economist Intelligence Unit found that 85% of financial services executives plan to increase AI-related investments through 2025.

In Summary

Customer portals are a critical component of the engagement strategy for financial services companies, but they must be continuously refined and personalised to remain effective.

By focusing on delivering value, reducing friction, and leveraging new technologies, companies can foster deeper, more meaningful interactions with their customers.

References:

UK consumers have 119 logins & digital accounts, Beyond Encryption, 2024

U.S. Retail Bank Customers: Stressed and Looking to Their Bank for Help, J.D. Power, 2023

LastPass Reveals 8 Truths about Passwords in the New Password Exposé , Lastpass, 2017

The Evolution of Customer Communication Channel Preferences, Keypoint Intelligence, 2021

58% Consumers Abandon Shopping Carts Due To Log-in Frustrations: Survey Finds, Spiceworks, 2020

21 Surprising Customer Retention Statistics for 2023, Annex Cloud, 2023

7 Innovative Ways to Improve Customer Engagement in Financial Services, Propello, 2024

Reimagining customer engagement for the AI bank of the future, McKinsey, 2020

The Empowered Consumer, Accenture, 2024

Consumer Duty resources, Financial Conduct Authority, 2024

Artificial Intelligence Has Potential to Increase Corporate Profitability in 16 Industries by an Average of 38 Percent by 2035, Accenture, 2017

Banking Consumer Study: Reignite human connections, Accenture, 2023

The road ahead: Artificial intelligence and the future of financial services, FSTech, 2024

Reviewed By:

Sabrina McClune, 05.09.24

Sam Kendall, 05.09.24