A substantial segment of surveyed consumers (43 percent) said they first heard about the financial services provider they most recently started using through a recommendation from friends or family, according to a new study by Yes Marketing.
For its report, Inside the Lifecycle of the Financial Services Consumer, Yes surveyed over 1,000 consumers on their priorities when selecting a financial services provider and found that the reputation of a financial services company can make or break new customer acquisition. More than half (53 percent) of consumers have chosen not to use a financial services company because of negative feedback from family or friends—especially among younger consumers aged 18 to 21, two-thirds of whom (67 percent) reporting that negative reviews from social circles have influenced their decision not to use a provider.
However, while consumers lean on family and friends to learn about new financial institutions for the first time, more than half (57 percent) ranked comprehensive, up-front information about a company’s services, rates and fees as the top factor influencing their trust in a financial services company they had never used before. Security also plays a significant role, with one in four (26 percent) consumers ranking proactive communications about security as the most influential factor for building trust with a new company. The findings indicate that establishing trust while building awareness with customers early on is crucial for financial services institutions.
“With ever-growing data security and privacy concerns, trust is a critical factor for today’s financial services consumers,” said Jim Sturm, president of Yes Marketing, in a news release. “The value of trust is unmatched, which is why financial services companies must proactively communicate with their customers to deliver clear, accessible information from the very first interaction.”
Trust is essential for financial services companies in building long-term loyalty with existing customers
In fact, almost a third of consumers (31 percent) said a company’s trustworthiness is among the top three factors that drive their loyalty to financial institutions.
“As a result of the digitization of financial services, the industry no longer belongs exclusively to banks, making it that much more important for financial institutions to be transparent and leverage data to deliver relevant and comprehensive content about their products and services,” said Michael Iaccarino, CEO and chairman of Infogroup, parent company of Yes Marketing, in the release.
“Financial services companies must find the right technology and service partner to help them build trust while developing and implementing strategies informed by customer data,” he added. “This approach will help financial services companies engage and convert new customers across generations and, ultimately, build lifetime loyalty.”
Additional findings from the report include:
- Forty-two percent of consumers rank the competitiveness of rates and fees as the most influential service factor in their decision to use a financial services provider they’ve never used before.
- Gen Zers are more likely to rely on rate comparison sites than their older counterparts, with one in four (25 percent) using these sites to learn about new financial services providers and their offerings.
- Only 9 percent of financial services consumers report using Google to find their last financial services provider.