In the financial services sector, customer retention is crucial. Retaining existing customers is more cost-effective than attracting new ones, and raising customer retention rates by just 5% may increase revenues by 25% to 95%. However, many businesses in South Africa struggle with client retention.
In this blog, we will discuss why companies prioritize client acquisition over customer retention and offer suggestions for improving this situation.
Digitization: The digitization of services can provide a streamlined, user-friendly online experience for customers. This can be done by establishing a mobile app, modernizing the company’s website, and introducing online self-service options such as chatbots or virtual assistants. Using AI to better serve customers is a recent example of digital transformation in the financial services sector. Nedbank, a large South African financial institution, has introduced a virtual assistant driven by artificial intelligence to help its clients. Customer happiness and loyalty have grown as a result of Nedbank’s use of AI to shorten wait times and enhance the entire banking experience.
Automation: Automation can free up workers for higher-level, more difficult activities that still require human input. This has the potential to decrease reaction times, increase accuracy, and boost patron approval. A South African insurance startup has used a chatbot driven by artificial intelligence to aid policyholders throughout the claims process. Customer satisfaction and retention have grown because of the company’s use of AI to shorten wait times and enhance the claims process.
Customization: By collecting and analyzing client data, firms may better understand their preferences and behavior thanks to technological advancements that allow for personalization. Using this information, businesses may provide clients with specialized services and products. Global investment bank and financial services provider JP Morgan Chase has adopted machine learning algorithms to provide more tailored investment advice to its customers. JP Morgan Chase is now considered a global leader in the financial services business thanks to the success it has had with its tailored approach to banking.
Quality of service: Customer satisfaction and loyalty rise when product or service quality rises as a result of modernizing production methods, supply chain management, or service delivery. The usage of blockchain to enhance supply chain management is one way in which innovative technology is being used to update the financial services sector. IBM and Maersk have collaborated on a blockchain technology called TradeLens to modernize and simplify international trade. The platform’s use of blockchain technology ensures the safety and transparency of the whole supply chain, allowing businesses to monitor their inventory in real time and lowering the possibility of theft or mistakes.
Communication: Businesses may keep in touch with their consumers by using email, messaging applications, and social media. Vodafone’s usage of holographic telepresence technology in South Africa is an example of the practical use of cutting-edge experimental communication technology. Through the use of this technology, clients may have a more interactive and memorable conversation with a remote representative. Increased customer happiness and loyalty have resulted from Vodafone’s use of this cutting-edge technology to improve the quality of customer care.
In today’s highly competitive market, financial services organizations need to constantly look for ways to improve their efficiency and effectiveness. By adopting modernization strategies, such as streamlining processes, personalizing services, and enhancing communication, these organizations can significantly reduce their expenses and increase their return on investment. Moreover, by focusing on customer satisfaction and retention, businesses can save on the costs associated with client acquisition and reduce their marketing and advertising expenditures. Ultimately, by prioritizing modernization and customer satisfaction, financial services organizations can not only improve their bottom line, but also build a strong foundation for future growth and success.
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