By: Nancy Steadman
Customer loyalty and retention are based largely on a customer's experience, and banks across the U.S. should focus on continuing to improve the latter, as evidenced by a recent study.
The results of the ninth annual World Retail Banking Report released by Capgemini and Efma reveal that while customer experiences experienced a slight uptick from last year, banks' customer retention rates are sliding for several reasons. Nearly 10 percent of banking customers said they may leave their bank within the next six months, while 40 percent said they were unsure whether they would continue their banking relationship long-term.
The reasons cited for customers' uncertain relationships range from their experiences to bank product terms. When it came to customer loyalty, 53 percent cited quality of service as their most important reason for staying with their bank, while 50 percent addressed service fee income structures as a factor in their relationships. Forty-nine percent of respondents also cited ease of use and interest rates as the largest factors that dictate customer loyalty.
The study also revealed that North American customers were the most satisfied with their banks. However, in addition to improving levels of service and evaluating financial terms, the study revealed that mobile banking platforms remain one channel that may dictate customer loyalty and retention in the future.
"Banks should be applauded for taking the necessary, initial steps to sustain customer relationships," said Jean Lassignardie, Capgemini Financial Services' global head of sales and marketing. "However, as more non-bank competitors enter the market, banks must differentiate by building innovative products, improving channel management and service, and enhancing their mobile offerings."
Tighter banking regulations, and new costs that have been transferred to consumers as a result, have prompted more Americans to rethink their relationships with their banks. Industry experts say that not only have hundreds of thousands of Americans switched banks to seek out more affordable products in recent months, but the trend is expected to continue as new fees are introduced.