The loyalty that banks once took for granted is under threat, with more than half of customers saying that they have switched providers – and some have done so multiple times.
Loyalty to banking brands is under fire. The ease of switching, combined with the growth of challenger banks unhampered by legacy systems and data siloes, demands increasingly agile thinking to keep customers satisfied – and not tempted by competitors.
While, statistically, it used to be you were more likely to get divorced than change your bank account (according to pre-pandemic statistics), new generations of accounts, combined with ease of switching, have put an end to traditional patterns of loyalty.
Capita commissioned research to form an in-depth understanding of retail banks’ current challenges and opportunities and to identify in what ways they most need to adapt, and as part of this we asked consumers whether they had ever changed which bank they used – and if so, why?
Over half (55%) of all consumers told us that they have switched the providers of their bank account; one in five (21%) multiple times. Men are significantly more likely to have switched than women (61% vs 49%), with those aged 54 and over less likely to switch than younger generations.
One in two (51%) of all bank account holders now hold a savings account with the same provider, followed by Cash ISAs on 28%. Seventeen percent of consumers hold a mortgage, convenience seemingly proving invaluable here in an era of mortgage brokers offering whole of market access.
Any banks and building societies who have been depending on the unwavering loyalty of their customers could be in for a shock, since they can no longer take for granted that people will not decide to move. So they must be ready to do what it takes to keep their customers happy – if they are content to just take them for granted, they may soon find that they are disappearing and becoming someone else’s customers.
To access more exclusive insights, download the full Rethinking Banking report where you’ll find more insights into other key retail banking trends, such as how important humans and humanity is in banking and how much people want banking to be ethical and sustainable.
In total, 2,000 consumers were interviewed nationwide during the research, conducted by specialist research agency Opinium. The subjects were split by the five key consumer generations: Gen Z (18-24), Millennials (25-40), Gen X (41-56), (Baby) Boomers (57-75) and those aged 76+. As well as focusing on those different generations, data scientists have taken the research a stage further and defined six distinct new banking personas for banks. While working with the outputs from the research, they identified six new customer banking clusters – or personas – combining both traditional socio-demographic data with new behavioural, channel and attitudinal data from our recent banking research.
In the light of wholesale industry change, understanding these personas will help decision-makers in our specialist sector create more accurate (and innovative) customer solutions, spanning product, channel, service and customer experience.