Bank customers looking for better deal. Should you?

By April Dykman

With consumer confidence down, it pays more than ever to shop around.

A 2010 survey of major retail bank executives around the world shows that customer profitability has continued to be lower than before the financial crisis, and there's been an increase in both price sensitivity and the tendency to "shop around."

Accenture, a global management consulting, technology services and outsourcing company, interviewed 46 senior-level bank executives -- CEOs, retail division heads and senior vice presidents -- in 14 countries. The executives indicated that 46 percent of major retail banks have seen a drop in customer profitability by 5 to 15 percent since the crisis. The executives also reported the following:

  • 59 percent said customer loyalty had decreased
  • 63 percent reported their customers are more sensitive to price
  • 63 percent said their customers shop around more often than before the crisis

Of the executives surveyed, 68 percent indicated that they expected these changes in consumer behavior to be long-term changes.

Noel Gordon, global managing director of Accenture's banking industry practice and co-author of the report, writes, "Consumers have emerged more confident in making financial decisions for themselves, more skeptical of their bank brands, more price-conscious and more willing to move away from institutions that provide poor service."

Banks working to win customers

So what are banks doing to win back customer loyalty? According to the survey, not enough. There's a big gap between customer service demands and the bank's ability to meet them. Executives surveyed indicated the following demands were most important to finding and keeping customers.
  • Strong customer analytics
  • Integrated service channels
  • Personalized offerings
  • Innovative technologies

But many executives considered their banks to be weak in those areas, which means that new changes are coming to their business models.

The good news for banking customers is that with banks competing to attract and retain customers, it pays more than ever to shop around and compare savings rates. Banks will be working hard to build trust and lifetime loyalty.

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