In the most recent edition of the USBanker magazine, two articles caught my attention. The first, entitled "Say Goodbye to Checks", addresses the declining use of checks by consumers. With a new study coming out from the Federal Reserve later this year, the decline is expected to be much higher than the 4.1% percent decrease in 2007. Here are a couple of reasons why:
- The number of bills paid on line by consumers increased by 1 billion a year from 2006 to 2009
- With increased debit card usage, retailers are reporting a 15% decline in checks annually A second article, entitled "Banking 2020:Smartphones Rule", discusses the impact of technology innovation on the branch banking system.
With the introduction of alternatives like ATM's and online banking, and now the advent of the smartphone, consumers have more ways to bank then ever before.
Both of these articles highlight the impact technology's had on consumer behavior and the likelihood that it will continue. We've been tracking these trends as well and are constantly looking for innovative ways to service our customers. In the coming weeks, we'll be introducing some new services that we think will help you more effectively manage your financial life. The future is now. Stay tuned!
I recently attended an eCommerce conference for financial institutions called Net.Finance. Over the two day period, there were two consistent themes across most of the presentations. They were the growth of mobile as a servicing and delivery channel and the use of social media by banks. I'm going to focus todays' post on mobile.
Over a year ago, we began offering an iPhone Branch/ATM Finder application, one of the first in the country. Even with the limited functionality, we've been pleasantly surprised to see over 1,500 downloads. This simple application confirmed that there is definitely a demand for these services. And why not? Over 78% of the US Consumer market, close to 242 million people, are expected to have mobile access by the end of 2010. Of those mobile users, 1 in 5 will be using the so-called "smart phones" like the iPhone and Android. When we launched the iPhone app, we were one of a handful of banks. Now, there are over 78 financial institutions offering 86 mobile apps for iPhone users.
As we follow these national trends, we realize that our customer and prospect needs are changing as well. So in the very near future, we'll be rolling out a mobile solution that will meet the needs of our community. We are very excited about this solution. Stay tuned for more in the months ahead.
The financial services industry has had a pretty rough couple of years, and 1st Mariner is no exception. Recognizing that we needed to get a better understanding of the relationship between us and our customers, we began phone surveys using the metric of the Net Promoter Score (NPS). Developed by Fred Reichheld in 2003, NPS measures customer loyalty by asking one simple question, "How likely is it that you would recommend 1st Mariner Bank to a friend or colleague?". Using a scale of 0-10, it identifies your loyal customers (Promoters) and those who are less satisfied (Detractors). NPS is the percentage of Promoters minus the percentage of Detractors. The highest NPS score in the industry is 81% for USAA, the large credit union serving military personnel and their families. Most of the national banks are well below that, averaging in the 30% range. Our average score in 2009 was 66%, a very respectable score.
In October of 2009, we rolled out an internal training program focusing on the customer. Called "Providing Red Carpet Service the 1st Mariner Way", all customer facing personnel, including Tellers, Contact Center Representatives, and Branch Managers, attended. Beginning with mystery shops of a competitor and a retail store, employees were asked to focus on service from the customers perspective. The response was extremely positive from the attendees. The training has been reinforced with monthly Red Carpet Service awards to individuals and groups highlighting these service "stars". In addition, there are efforts to promote teller referrals and increase product knowledge across the branches. The next phase of the program will be rolling this out to internal support areas inside the bank.
Often it is hard to quantify the success or impact of training. With NPS, we have a tool that gets us real time feedback from our customers. Preliminary results are very encouraging, as scores for the first three months of 2010 have averaged 71%, a 7% increase over last year. As they say in academia, this is a statistically significant increase. Coincidence? I don't think so, but I'd love to hear what you think.