What’s the best way to leave a job? What’s the optimal way to end a professional relationship? My mother always advised me to keep the door open — just in case I want to return one day. “Things change and you never know what the future might bring,” she told me.
The same maxim can be applied to account closures. In financial institutions, an account closure occurs when either the institution proactively closes a customer’s account, or when the customer chooses to close their account. While not all account closures are easy and banks might expect customers to complain when the bank initiates the closure, banks want the account closure experience to be as seamless as possible.
After all, just because your customers’ accounts close, doesn’t mean they won’t want to reopen their accounts in the future. So, how can financial institutions ensure a positive ending that leaves the door open?
To find the answer to this question, we explored over one million complaints in the PositivityTechⓇ platform — identifying customers’ complaints about account closure and predicting their future risk. (Both steps are critical to understanding why customers’ accounts close and what your actions should be.) Ultimately, we learned that negative input can have a positive impact.
Here are the steps we took:
Identify the pain points associated with account closure.
Within the PositivityTech platform, we identified seven sub-issues in customers’ complaints about account closures — those initiated by institutions and customers. These sub-issues include, for example, “change in terms” and “fees charged for closing an account.” Below are two examples of customer complaints about account closure. We have hidden the identities of the banks mentioned.
“I received a credit card from [X Bank] that I did not request. I have called twice to request that the account be closed and both times, they refused to honor my request without me giving them my social security number. I refused to give this information out… My credit file was frozen several months ago to prevent fraudulent applications. I don’t know how this application was processed despite the freeze. The company suggested that I walk into one of their branch offices to get a telephone number for their credit fraud department rather than trusting the number on unsolicited mail. There are no service branch offices near me.”
“I initiated opening an account with [X Bank]. Today, an account closing was initiated by the company. I noticed what was done when checking my account online. I then called the bank to find out what was going on. According to a customer service representative, the account was closed due to suspicious activity. No further details or explanations could be given on the case because not enough information was available to the representative. The company failed to inform me of their actions and completely disregarded me as a customer. The company then charged me a whopping $25 closing fee.”
Understand the severity score of these customer complaints within these specific pain points.
The specific pain points driving these customer complaints have a PositivityTech proprietary severity score that is 6-8% worse than that of the average complaint.
Predict the likelihood of these customers going into debt collection.
The PositivityTech platform’s proprietary debt collection score reveals scores that are 76–95% lower than the mean. Interestingly, customers who complain about their account closure pose a low credit risk to financial institutions.
Predict the likelihood of account closure.
Each of the seven sub-issues show a very high likelihood of account closure, even while they reveal a low threat of future risk.
Prevent bad relationships with customers who close their accounts.
Customers who complain about how they are treated when their accounts are closed — and customers who do not complain — pose a low risk of not paying. In fact, they present a hidden segment opportunity for financial institutions to win back profitable customers.
While customers’ pain points are not significant in volume, they are very significant in severity and in predicting account closure. In one institution, we found that one of the strongest predictors of account closure was present in only 3% of all customer complaints.
Flip the script on customer complaints about account closure.
By exploring customer complaints about account closure, we were able to pinpoint past customers’ potential for future business opportunities. Understanding and addressing the root causes of these complaints can reduce customer churn and even alleviate future customer frustrations.
With the PositivityTech platform, customer feedback fuels businesses with the insight they need to identify issues and uncover actions. If you’re interested in learning how it can help your revenue grow, please reach out. I’d be happy to speak with you.