Shut the Back Door on Churn: Retail Banking Retention Reinvented
By: Bob Sterner, National Account Manager
“Churn is the silent killer of businesses.
[…] The attrition eats away at your growth, forcing you to keep running to stay in place.
[…] The thing about churn is that it’s often hidden. It’s not like a crisis that grabs your attention. It’s a slow, quiet process that happens in the background.
[…] Some churn is inevitable. Too much can kill you.”
Are your account holders silently slipping out of your financial institution’s back door, unnoticed but slowly dragging down your return on investment (ROI)?
That’s churn hard at work. Whether it’s accounts that closed with a zero balance, became dormant for six months or more, or dipped below a minimum monthly threshold, the results are the same — lost deposits, lost opportunities and lost relationships. It’s time to shut the back door and secure long-term growth, not just through acquisition but through ongoing engagement and retention efforts.
How churn affects community banks and credit unions
Churn isn’t just an inconvenience — it’s a major financial drain. Accounts typically churn for one or more of the following reasons:
- Consumers open accounts just for the sign-up bonuses, then leave
- Account holders are unhappy with service or fees
- Account holders don’t feel engaged or valued, but forgotten
Churning bank incentives has become rampant, with entire websites, YouTube channels and subreddits dedicated to teaching others how to game the system. In a recent survey, more than 70% of people said “sign up bonuses” were a very or somewhat important factor in choosing a bank or credit union. That number jumps to 81% for Millennials, a key demographic.
Further, only 55% of people are satisfied with their current bank and have no desire to switch. That means 45% of account holders could be up for grabs. Standing in the way of that opportunity are the two biggest obstacles to switching: the perceived hassle and having to transfer direct deposit and automatic payments.
From this info, we can surmise that creating a sticky connection from the beginning, through strategic onboarding and engagement, is essential to minimize churn. From there, you’ll have more opportunities to engage these account holders and better odds of winning over the long-term banking relationship.
But doing so may require a seismic shift to your retention strategy.
Shut the back door on churn by reinventing retention
The exit path from your financial institution may be wide open now — but you can shut the back door and stop the churn. The key is to focus your retail strategy on building foundational excellence: providing exceptional products and service backed by a seamless, positive account holder experience.
Strategies that strengthen retention include:
- Personalized experiences through targeted, dynamic messaging to specific account holder segments
- Enhanced service with digital options that appeal to the growing number of mobile bankers and digital native account holders
- Cross-selling products through data-driven insights as to where account holders are in their financial journey
- Loyalty and rewards programs such as debit cards with valuable rewards and benefits
All this equates to making retention part of your strategy as soon as an account is acquired.
Upgrade your retention efforts today
Waiting until churn has become out of control and eaten away at your budget and bottom line isn’t an option. You know that standing still just puts you behind more and more each day — so make today count with a new outlook on retention.
Velocity Solutions’ expert guidance, innovative software and relationship-focused strategies can transform churn into earned returns. Plus, guaranteed ROIs and a results-based compensation model make creating a foundation for long-term loyalty an easy decision.
See more about how we prioritize engagement, personalize service and turn new accounts into long-term relationships, then reach out to a Velocity rep today to get started with redefining retention at your institution!