Publications & Resources

September/October 2009
Focus: Information Systems & Security

 

Using Switch Kits to Onboard New Customers and Strengthen Customer Loyalty

By Dinesh Sheth

As the banking industry becomes more and more competitive, community banks are looking for ways to gain market share by attracting new customers looking to switch banks due to instability of larger banks, as well as the many mergers and acquisitions occurring in today’s turbulent banking industry. Payroll direct deposits, automatic payments, credit cards, loans, CDs, etc. can make customers feel bound to their existing banks. As a result of these multiple accounts, switching banks can be very time consuming and inconvenient for customers, but it does not have to be.

The solution to the problem can be found on the Internet. As young generations enter the banking world and the percentage of online banking customers continues to rise, it is expected that all banking services will be available on the web, including moving bank accounts. Online switch kits can provide an easy way for switching financial relationships, enabling financial institutions to acquire more relationships per customer.  An online switch kit does this by making it simpler for customers to transfer all of their existing financial relationships – deposit accounts, loan accounts, direct deposits, automatic payments and credit cards - from other financial institutions over to your financial institution.

With the help of an online switch kit, such as uMonitor’s uSwitch®, customers can close any other financial accounts either from a personal computer or with the help from the branch or call center staff. They can switch any direct deposit transactions, such as payroll, pension, and/or social security payments, from going into other financial institution accounts. Likewise, they can transfer any payments that are automatically deducted from their other accounts, such as utility, telephone, mortgage, or any other recurring deductions. Through uSwitch, customers can also pay off loans and credit card debt.

Automated switch kits provide many benefits over traditional PDF forms due to their ease of use, pre-populating information for existing customers and back office capabilities, such as reminder, follow up and reporting. The online switch kit should be made available both as a stand alone service for existing customers and as an integrated part of the online account opening process, outside and inside online banking service and in the branch and call center.  

A switch kit integrated into the account opening and funding process allows new and existing customers to open a new account and then switch outside relationships over to their new relationship at the right time. It provides a way to switch other services at once, simplifying their financial life by having all of these services at one bank. For existing customers using online banking, the switch kit pre-fills the application forms and allows the bank to collect the data they need for recurring direct deposits and withdrawals to seamlessly continue those transactions. It is also available as a stand alone online solution for existing customers to switch their financial relationships at their convenience. Integration into online banking provides for reduced data entry work, resulting in a better user experience for existing customers. This must also be deployed in the branch with new account opening process to ensure that opportunity to deepen relationships of new customers is maximized and not lost.

Financial institutions can encourage account transitions by setting up promotional offers with the switch kit. In addition, the financial institution can offer customers the ability to 'link' their outside financial institution accounts to their internal accounts, allowing them to transfer money from their outside accounts into their accounts at your institution on an ongoing basis with account-to-account transfer services.

There are four keys to success with an online switch kit deployment: i) make sure it is available online, in branch and in call center; ii) make it available to both new and existing customers, who may or may not be online banking customers; iii) train your staff on promoting the switch kit with each customer interaction; and iv) integrate switching relationship action in all marketing programs. 

Dinesh Sheth is the CEO of Memphis-based uMonitor-Parsam Technologies, an innovative financial solutions provider for community bank customer acquisition and retention. He may be reached at dsheth@umonitor.com or 901-757-1212 x 7102. uMonitor is a WIB-endorsed Value & Income Program (VIP) partner.

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