Recent research by marketing firm Ello has found only one in five consumers believe that their bank values them as a customer.
The research polled opinion from over 2,000 customers across the UK and discovered a lack of loyalty or desire to be loyal to their banks amongst their respondents – with only 18% saying it pays to be loyal to their bank/finance provider and a quarter admitting they’re not loyal to their financial provider.
When quizzed on their decision to stick with a provider, the respondents cited good customer service and trust and reliability as having the biggest impact on their decision.
The study found that over a 12-month period, the average UK consumers spends around £140 on banking/financial services. Customers were identified to be loyal to their provider for around seven years and less than half – 40% – said they have been a customer with their bank for over 10 years.
A key finding during the research was that consumers are becoming increasingly conscious of who they bank with. For example, 60% of consumers admitted bad interactions impact their loyalty to a brand and often result in them cutting ties, while half of respondents would pay a brand more for a product or service over their competitors if they trusted them and saw them as reliable. Elsewhere, 24% of consumers said they would leave a brand if they found out they mistreated employees.
There is also a desire on the part of consumers for their banks to offer them more perks. Up to 25% said they wish their bank offered them more perks, with another 25% confirmed they’re rarely offered any perks and 6% stating they’re often offered perks from their bank.
The research found that ranked in order of importance, the factors that are likely to result in increased spend on banking are good customer service, reliable/good quality product/service, trust in the brand or business, a loyalty scheme, ethical business practices, receiving regular offers, brand values aligning with their values, the business giving back to charities/communities and more engaging, personalised and localised marketing.
Ello managing director Michael Kalli said, “As a result of countless new innovations in recent times, loyalty is getting more and more difficult for banks to hold onto, as customers look to make the most of new offerings and diversify where they put their money. With this only set to accelerate over the coming years as fintech continues to thrive, financial services firms would be wise to assess their customer experience and loyalty strategies now, and get ahead before it’s too late.
We’re anticipating the banking/finance sector to innovate considerably over the next few years. With this will come increased competition, making it more crucial than ever before for those in the industry to be focusing on ramping up their customer retention strategies. Advances in technologies – notably AI and machine learning – are going to make personalisation a breeze, but it’s how financial service providers use this data that will make all the difference.
“Building trust and making customers feel valued with bespoke rewards, while offering great service and reliable products are the key factors that will instil long-term loyalty. We’re confident the next few years will bring with them a huge range of opportunities for bankers/financiers to build huge gains on the loyalty front, but it’ll be interesting to see who utilises the tools available effectively.”
A recent report published by Temenos has found four in five bankers believe financial institutions will look to discern themselves on customer experience rather than products or services.
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