Banks warned the days of ‘lazy loyalty’ are ending

banksThe big four banks have been warned they can no longer afford to rely on customer intertia to retain account holders; the challenger banks are coming and they are likely to be far more attractive to the more demanding, digitally-savvy consumer.
Not that you would necessarily get that from the latest DMA Customer Engagement research – sponsored by Relay42, Acxiom and Organic – which shows customer indolence is still very much alive and kicking in the banking sector.
Some three-quarters (75%) of those surveyed said they had not switched providers in the last 6 years, and 40% said they had never changed, with 62% of customers saying that they simply have had no issues or problems with their bank.
Was it ever thus, you may cry, but with account switching becoming ever easier – and people becoming more demanding – challenger banks are looking much more appealing.
Tomas Salfischberger, chief executive of one of the survey’s sponsors Relay42, explained: “At first glance the headline figures from this research might lull retail banks into believing they have a strong customer base, that they can rely on to remain loyal.
“However, marketers know that the rise of the challenger banks prove the established players cannot take anything for granted. With digital technology creeping into every aspect of our lives, consumers will come to expect similar services from their banks. Loyalty will have to be earned, as regulators make it ever easier for customers to switch.
“That will depend on convenience and personalisation, so banks better start moving quickly to make sure they have a clear, integrated view of their customers’ interactions across all their products and services. Without this understanding the challenger banks, who are not burden with the same complex legacy systems, will quickly show how their digital expertise and responsiveness will be a more attractive proposition for consumers.”
When asked about new services banks could offer, 59% of consumers said they are interested in a service that would automatically notify them of the best rates on savings accounts. In addition, over a third (36%) are interested in a service that delivers alerts regarding account activity via a social or chat messenger service. Virtual assistants could provide an opportunity for banks to humanise the digital experience too, and 35% of consumers said they’re interested in a service that gives access to a personal virtual assistant to help with banking tasks.
Organic boss James Moffat wonders how long banks can rely on customers viewing their services as being merely ‘acceptable’.
“Is that a long-term strategy for any business? he asks. “Those that succeed will be the organisations that take the time to understand what the customer wants and adding value to their offering. The winners will be those that can differentiate themselves from the pack and innovate in the future.”

Print Friendly

To leave a comment please register – it takes less than a minute and is free of charge. You will also get our weekly email update The DM Report (to opt out contact subscriptions@decisionmarketing.co.uk). If you are an existing user, please log in. If you have forgotten your log-in details please email info@decisionmarketing.co.uk to get them reset!

Existing Users Log In
 Remember Me  
New User Registration
*Required field