From disruptive technologies to changing consumer expectations, retail banks today face a host of challenges, not least an increase in competition for market share. New entrants continue to introduce innovative products and services that threaten traditional business models. Simultaneously, consumers are being trained to expect more. Recent research from PWC shows that other consumer-facing industries are contributing to an increased preference for superior convenience, personalization, accessibility, and ease of use.
To evolve within this complex ecosystem and stay relevant, retail banks must address pain points in three key areas: customer acquisition, customer service, and customer retention. However, the current process for understanding customer behavior is inherently flawed. Traditional methods for collecting customer feedback still rely heavily on focus groups with biased or leading questions and small sample sizes. The subsequent analysis is a time-consuming and extremely manual process.
Using Quid, customer feedback can be read and analyzed at scale to automatically reveal key insights around major themes, sentiment, and conversations. To dig deeper into customer retention issues at institutional banks in major markets, Quid mapped customer feedback from over 2,500 Yelp reviews for Wells Fargo, Chase, and Bank of America branches in San Francisco, New York City, Chicago, and Phoenix. Seen below in Figure 1, customer feedback clusters around eight main categories discussing ATMs, Staff & Tellers, Waiting Time, Customer Service, Credit Unions, Personal Bankers, Checking & Credit Services, and Location & Facilities.
Figure 1 (Network Overview): Quid surfaced 8 major themes in customer feedback from more than 2,500 Yelp reviews for retail bank locations in four major cities.
Analysis of star ratings reveals top customer pain points
Quid’s ability to read and analyze text-based data combined with the embedded star rating metadata from the Yelp reviews helps establish a solid understanding of customer pain points. After extracting and grouping topics based on top themes, Quid displays each topic with its respective range of star ratings. Seen in Figure 2, reviews discussing Personal Bankers and Staff & Tellers had the highest percentage of 5-star reviews (39% and 36%, respectively). At the other end of the spectrum, the Credit Union and Customer Service categories had the most 1-star ratings (71% and 67% respectively). When it comes to customer retention, the data tells us that customers are expressing deep dissatisfaction with their banks in comments linked to credit unions.
Figure 2 (Bar chart view of major themes and sentiment): Customer Services and Credit Unions were the two categories with the highest percentage of negative feedback (1-start reviews).
The number of reviews that mention switching to credit unions is increasing
Closer inspection of the comments grouped under the Credit Unions category reveals that these types of reviews are on the rise (Figure 3), with a notable spike in 2015. As the overall volume of comments has risen, so has the percentage of negative reviews, with 2018 being the worst year in our time range. In 2018, 75% of all reviewers who mentioned switching to a credit union gave the experience at their bank 1 or 2 stars. And it looks like 2019 is shaping up to be no different. So far, 71% of the reviews mentioning credit unions received only 1 star.
Figure 3 (Feedback by year): 2018 had the highest percentage of negative feedback (1- and 2-start reviews) at 75.3%
Customer dissatisfaction with retail banks impacting retention rates
By zooming into individual reviews for the Credit Union cluster, we can begin to understand exactly why credit unions are being discussed and how it relates to their experience at retail bank branches. Subject lines can be easily surfaced by hovering over each individual network node and a click takes you to the full review text. Quickly, one can see that customers who had bad experiences at their banks are contemplating or have already made a switch to credit unions. One user mentioned that they were “grateful for the credit union movement” after they found out that Wells Fargo had opened an account for them without their permission. Another cited a mortgage lending process with Chase – “one of the most frustrating experiences they ever endured” – as the reason they made the change.
Figure 4 (Detail from reviews mentioning credit unions): Customers expressing frustration with their retail banks are switching to credit unions.
More visibility around available data is the key to success
For incumbent players in the retail bank industry, this type of analysis is valuable and increasingly necessary. PWC research concludes that to win in 2020, retail banks have to “develop a much deeper, holistic understanding of their customers.” To do this, retail banks will need to “acquire, integrate, and analyze multiple sources of internal and external data.”
Quid makes it easy to gain valuable insight into customer behavior without the time or scope limitations of traditional methods. The platform’s NLP algorithms automatically read and analyze any text-based data, from open-source online forums like Yelp or Google reviews to internal customer data and feedback surveys.
Leverage the power of available data to better understand what your customers are thinking and doing. With greater visibility around customer behavior, retail banks can gain a critical information advantage to flag potential opportunities or trouble ahead.