Neobanks, struggling to provide comparable customer service at levels similar to traditional banks, are expanding their customer service channels. Miriam Cross reports further in American Banker:
“Startups may be able to get away with sparse staffing and email-only responses early on, when customer needs are simpler. But shortchanging this part of the team can cause a backlash when things go awry with customer accounts.”
Customer service can suffer as a non-essential critical business function at the outset of a startup’s market entry but businesses quickly learn they must provide additional support to retain business.
“’Customer service has always been a case of, how little can I do and still keep the customers I have,’ said Emmett Higdon, director of digital banking at Javelin Strategy & Research. ‘But as challenger banks expand into more lines of business, and as those relationships get more complicated, they have to ramp up customer service or risk losing those more profitable customers to another provider.’
Cross notes new procedures by neobanks such as Varo and NorthOne to add additional customer service channels beyond email, such as phone and live chat, in an effort to think of customer service as a more strategic function.
“It’s an investment we’ve made,” said Eytan Bensoussan, NorthOne’s CEO. “We decided it is such an important part of what the banking value proposition means for a small business that it was worth going the distance and thinking of it as a real big prong of our strategy.”
As neobanks continue to mature, further customer service investments seem likely to compete effectively against traditional banks and to increase the connection customers feel by moving beyond anonymous email help to more personal chats, phone, or secure messaging.
Overview by Jordan Hirschfield, Director, Prepaid Advisory Service at Mercator Advisory Group