The banking giant will drop existing lines to simplify its product offerings—which could help its bid to shuck the federally mandated asset cap, but hurt retention by driving off impacted customers.

Virgin Money boosts UK SMB lending experience with partnership: The UK bank’s latest fintech team-up demonstrates a focus on pivoting to post-pandemic customer retention.

We spoke with Zak Normandin, founder and CEO of Iris Nova, about how his company has leveraged SMS to better serve its customer base.

Sticky customer base: Seventy percent of its users “are not looking for short-term gains,” per co-founder Christian Hecker. Rather, they consider Trade Republic a savings plan that helps their funds grow over decades, meaning the app can rely on high customer retention. Transparent pricing: Trade Republic charges users €1 ($1.12) per trade, an easy-to understand-price model that promotes user trust.

As the banking services from these two giants ascend, it’ll become increasingly important for neobanks to market aggressively to keep customer acquisition growth strong and to maintain facets of their offerings—such as early wage access or high savings rates—that drive customer retention by keeping their existing clients happy.

In a January 2020 study from London Research and customer experience management company Reputation.com, 49% of client-side marketers worldwide reported that they use customer satisfaction as a KPI to measure and monitor CX. Customer retention was used by 44% of respondents; another 43% used conversion rate.

“This in turn lets them own the entire customer relationship and increases the likelihood of customer retention.”. Finally, brands leveraging a D2C model are working to improve margins. They’re doing this by eliminating intermediaries, reducing distribution costs, and gaining greater control over their bottom line. Through wholesale, brands' sales are also contingent on the success of the retailer.

Why personalization and retention are important now more than ever

Small and midsize FIs should decide whether their priority and motivation for new innovation projects is customer retention, acquisition, or both—and tailor their strategies accordingly to make the most of their limited budgets.

Coming in at No.1 confirms that it’s the preeminent neobank in the US—but it still could use a national banking charter to help build trust and hang onto its growing customer base.