Word of mouth (WOM) in digital banking

Word of Mouth (WOM) plays a pivotal role in shaping customer perceptions, especially in sectors like digital banking, where trust, service quality, and user experience are critical. WOM isn’t just casual conversation about products and services; it’s a powerful form of customer-driven marketing that can significantly influence business growth. In the digital age, this influence extends to Electronic Word of Mouth (eWOM), where customer recommendations or criticisms can reach broad audiences through digital platforms. Here’s a deep dive into the key concepts that define WOM and its impact in digital banking.

For a deeper dive into how WOM impacts banking, read our full insight on strategies that drive customer trust and advocacy - WOM in fintech: beyond advertising, toward customer satisfaction.

Word of Mouth (WOM)

WOM refers to the informal communication between individuals about their experiences with a product or service. Unlike traditional advertising, WOM is seen as more credible because it’s based on personal experiences and often carries no commercial motive. In banking, positive WOM can foster trust and draw in new clients, while negative WOM can quickly damage a bank's reputation. WOM is essential for sectors where trust and reliability are foundational, like fintech and digital banking.

Electronic Word of Mouth (eWOM)

With the advent of digital platforms, WOM has evolved into eWOM, where customers share opinions through online reviews, social media posts, discussion forums, and messaging platforms. In the context of digital banking, eWOM allows customers to broadcast their experiences to a wide audience. This form of WOM is especially influential in financial services, as potential customers can easily access others’ opinions about security, service quality, and reliability before committing to a provider.

The most influential platforms for eWOM in digital banking include:

  • Google Reviews – Popular for general service reviews, providing a broad audience reach.
  • App Store & Google Play – Essential for mobile banking apps, where users share detailed feedback on app performance, usability, and satisfaction.
  • Trustpilot – A trusted platform for reviewing various services, including financial and digital banking experiences.
  • Social Media (Twitter, Facebook, LinkedIn, Instagram) – Channels where users share quick opinions, engage in discussions, and follow brand updates.
  • Reddit and Financial Forums – Niche communities, such as r/PersonalFinance and Finextra, where users discuss detailed banking experiences, often with deep insights on service quality.
  • WhatsApp and Telegram Groups – Private messaging groups, especially popular in regions like the UAE, where users share personal banking experiences and recommendations within trusted circles.

WOM: Network of terms

Studying Word of Mouth (WOM) involves understanding a network of interconnected terms that together shape its impact and effectiveness. Concepts like customer satisfaction, service quality, customer loyalty, and trust are fundamental to WOM, as they directly influence whether customers will advocate for a brand. Additionally, the rise of electronic Word of Mouth (eWOM) has introduced digital platforms, such as social media, review sites, and online forums, which amplify WOM's reach and significance. By examining these elements in unison, analysts can uncover the mechanisms that drive customer recommendations, providing valuable insights for banks and fintech companies to refine their customer engagement strategies and foster positive WOM.

Customer satisfaction

Customer satisfaction measures how well a product or service meets or exceeds customer expectations. It is a major driver of WOM, as satisfied customers are more likely to recommend a brand, while dissatisfied ones may warn others away. In digital banking, high customer satisfaction reflects a bank’s reliability and user-friendliness, which are essential for encouraging positive WOM. Satisfaction is built on consistent service quality, transparency, and seamless user experience.

Customer satisfaction is not a fixed metric - it’s dynamic and can be strategically influenced. At Markswebb, we specialize in studying the drivers of customer satisfaction, focusing on methods that help banks and fintech companies enhance satisfaction quickly and effectively. By analyzing UX areas, we provide actionable insights that empower digital banking providers to adapt and optimize, fostering lasting positive WOM and customer loyalty.

Service quality

Service quality encompasses the overall performance of a service as experienced by the customer, covering aspects such as reliability, responsiveness, empathy, and assurance. It is a crucial factor in generating positive WOM, as high-quality service reinforces customer trust. In digital banking, excellent service quality translates to dependable customer support, straightforward interfaces, and secure transactions. When service quality is poor, it often results in negative WOM that can tarnish a bank's reputation.

Promotional appeal

Promotional appeal refers to marketing efforts designed to attract customer interest through incentives, such as discounts or exclusive features. While promotions can spark initial interest, they may not always lead to positive WOM. In digital banking, lasting WOM often stems from consistent service quality rather than temporary promotions. However, promotional appeal can still enhance WOM if it effectively engages customers and leaves a positive impression.

Customer loyalty

Customer loyalty describes the likelihood of a customer continuing to use a product or service and actively recommending it to others. Loyal customers are the backbone of positive WOM, as they are more inclined to share favorable experiences and advocate for the brand. In banking, loyalty is achieved through reliable service, personalized experiences, and trust, all of which contribute to sustained WOM.

Trust

Trust is the confidence customers have in the integrity and reliability of a service provider. It’s foundational for WOM, particularly in digital banking, where trust issues can prevent users from adopting new services. Trust-building measures, such as transparent communication and robust security, encourage customers to advocate for the brand, reinforcing positive WOM within their networks.

User Experience (UX)

User experience, or UX, represents the overall satisfaction derived from interacting with a service or product. A well-designed UX in digital banking includes easy navigation, intuitive design, and responsive performance. Positive UX contributes directly to WOM by enhancing satisfaction and making it easier for customers to recommend the service. Poor UX, on the other hand, can lead to frustration and negative WOM.

Transparency

Transparency in banking refers to clear and honest communication about terms, fees, and conditions. In digital banking, transparency is particularly valued, as hidden fees and complex conditions are frequent sources of customer dissatisfaction. Transparent banks build trust with their customers, which encourages positive WOM as customers feel informed and secure in their interactions.

Referral Programs

Referral programs reward existing customers for bringing new clients to a service. In digital banking, referral programs are designed to incentivize satisfied customers to recommend the service. Effective referral programs can multiply WOM by giving loyal customers a tangible reason to share their positive experiences, thus expanding the customer base organically.

Negative Word of Mouth (N-WOM)

Negative WOM (N-WOM) occurs when customers share unfavorable experiences, potentially deterring others from using the service. In the context of digital banking, N-WOM can spread quickly online, especially if the issues involve sensitive aspects like security, support quality, or unexpected fees. Managing N-WOM is essential for banks to protect their reputation and mitigate the impact of any customer dissatisfaction.

Social Proof

Social proof is the phenomenon where individuals are influenced by the actions or opinions of others, often seen through reviews, ratings, and testimonials. In digital banking, social proof can be a major driver of customer trust. When potential users see positive feedback and high ratings, they are more likely to adopt the service. Social proof in the form of eWOM reinforces the bank’s credibility and attracts new customers.

Community Engagement

Community engagement refers to the interactions between a brand and its customers on social media, forums, and other public platforms. Actively engaging with customers, responding to feedback, and addressing concerns demonstrates the bank’s commitment to customer satisfaction. This engagement not only strengthens customer relationships but also contributes to positive WOM, as customers feel valued and heard.

Advocacy

Advocacy occurs when loyal, satisfied customers actively promote a brand, often voluntarily. Advocacy is the strongest form of WOM, as it signals a deep, positive connection with the brand. In digital banking, advocacy is achieved through consistent, positive interactions, leading customers to recommend the service to others. True advocates become long-term promoters, driving growth through their organic recommendations.

Omnichannel Experience

An omnichannel experience ensures seamless customer interaction across various platforms, such as mobile apps, websites, and physical branches. In digital banking, an effective omnichannel experience means customers can switch between platforms without any disruption in service quality. This flexibility enhances customer satisfaction and is more likely to generate positive WOM, as users enjoy a consistent, convenient banking experience.

Conclusion

In the digital banking sector, positive WOM is a powerful asset, driven by factors like trust, service quality, customer satisfaction, and seamless user experiences. Understanding and nurturing these elements can transform customers into advocates who promote the brand naturally. Banks that focus on transparency, engage with customer feedback, and reward loyalty through effective referral programs can cultivate a strong, positive reputation that accelerates growth through genuine customer endorsement.

At Markswebb, we work closely with banks and fintech organizations to build these foundational elements, leveraging data-driven insights and industry best practices to elevate customer satisfaction and enhance WOM impact. Partner with us to uncover the most effective strategies for driving customer advocacy and building a reputation that stands out in today’s competitive digital landscape.

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