Banking survey shows opportunities in at retail

Findings from a national retail banking study by Market Force Information, a worldwide leader in customer intelligence solutions, found that customer satisfaction and loyalty is relatively low for five of the eight major financial institutions.

In September 2014, more than 4,245 consumers were polled nationwide for the study which was designed to uncover the consumer’s favourite national bank chains, investigate factors that drive satisfaction and loyalty as well as reveal trends in mobile banking and digital wallets.

The study found that 24 per cent of respondents are dissatisfied with the service they receive from their primary retail bank and 30 per cent are unlikely to recommend. The study found that  Nationwide Building Society beat its rivals with a composite loyalty score* of 55 per cent. The nearest rival, Santander, had a score of 38 per cent.

Consumers need to trust their banks

The study looked at the primary factors leading to increased satisfaction: Making it easy to do business with the bank, the bank creating trust and focusing on the consumer’s financial well-being, the bank’s reputation and finally location convenience. When banks execute well in all four areas, the percentage of highly satisfied customers increases from 3 per cent to 81 per cent. Nationwide Building Society scored the highest in 3 of the four areas, beaten by Barclays for location convenience by just one point.

While banks do relatively well at being convenient and efficient and executing on the basics like privacy and security, they struggle with developing trust and helping consumers how to improve their financial well-being. Indeed this was one of the  primary reasons cited by the 15 per cent of respondents considering switching banks in the next six months.

Poor customer experience

The research confirms that electronic banking is not likely to displace the need for physical branches anytime soon. 18 per cent of consumers had visited a branch within the past 90 day to speak with an advisor, and 57 per cent had completed a transaction with a teller.  Although the experience with the advisor is critical to both satisfaction and selling more banking products,  25 per cent of consumers had a relatively poor experience.

Customers of Lloyd’s Bank were the most satisfied with the advisory experience with 61 per cent giving a top box satisfaction score. It’s nearest competitor, Nationwide Building Society came in second with 55 per cent.

“We found that 1 in 4 consumers have a very mediocre experience with their primary retail bank. This leaves retail banks vulnerable to consumers switching brands when rivals offer promotions and incentives. To increase satisfaction and stop switching, banks need to focus on creating trust and a sense that they are increasing the consumers’ financial well being. Focusing on the personal touch of the advisory experience is key to creating both loyalty and recommendations,” explains Cheryl Flink, chief strategy officer for Market Force.

One in two consumers download the Mobile Banking App

75 per cent of consumers know that their primary bank provides a mobile app. Of those, two-thirds have downloaded the app and 61 per cent rated it as extremely easy to use.  83 per cent use the app to check balances and 60 to 78 per cent to check statements, pay bills, transfer money and flash balance checks.

Interestingly, those who did not download the app either saw no benefits in having it (49  per cent)  or had security concerns (28 per cent).

Digital Wallet – a Man’s World

Only 4 per cent of consumers report using a digital wallet, but 91 per cent of consumers are likely to investigate them in the near future.  For those who use a digital wallet, 62 per cent are men compared with 38 per cent of women – with the highest penetration aged between 25 – 34 year olds.  Paypal has the largest market share (81 per cent) followed by Google Wallet (24 per cent) and Apple Passbook (10 per cent).  Over 70 per cent used a wallet to make a payment, 34 per cent sent money and 30 per cent received money.  17 per cent use it as a ‘tap and pay’ method to pay with the phone.

Survey Demographics

The survey was conducted online in September 2014 across the United Kingdom. The pool of 4,245 reflected a broad spectrum of income levels, with 35 per cent reporting household incomes between £25,000 and £49,000 a year. Respondents’ ages ranged from 19 to over 65. Approximately 66 per cent were women and 34 per cent were men.