British Bank Customers Lack Loyalty

More than half of Great Britain’s banking customers are up for grabs, as a Taylor Nelson Sofres (TNS) report finds that 41 percent lack commitment to their current account provider.

“The financial services industry must act now to establish what is undermining commitment if companies are to have any hope of securing long-term relationships. This is particularly true of institutions built out of mergers or acquisitions who are seeing inconsistent commitment levels across business units because of a lack of groupwide brand values,” said Dan Coatsworth, editor of Financial Marketing.

The European Bank Health Barometer’s analysis of 23,000 adults across 12 countries found that the most committed banking customers are in Finland and Sweden (78 percent and 75 percent “committed” respectively), and the lowest levels of commitment were found among customers in Spain (48 percent) and Italy (52 percent).

The European Bank Health Barometer recognized that these differences are likely to be due to the relatively small number of banks operating in Finland and Sweden compared with the fragmented markets in Spain and Italy where customers have greater choice. However, at the same time, large differences in levels of commitment can be found when comparisons between banks within these countries are made.

In Britain, the research revealed the following
levels of customer commitment among the main
Bank Committed* Uncommitted*
Royal Bank of Scotland 67% 33%
Bank of Scotland 67% 33%
HSBC 66% 34%
Nationwide 66% 34%
Yorkshire Bank 59% 41%
Lloyds TSB 57% 43%
Barclays 54% 46%
Natwest 54% 46%
Abbey National 52% 48%
Halifax 49% 51%
* Commitment levels are measured using Conversion Model, which classifies
consumers in terms of their level of commitment to a brand.
Committed customers include those who are either “entrenched” or “average.”
Uncommitted customers include those who are either “shallow” or “convertible”.
Source: Taylor Nelson Sofres

TNS research indicates that while 21 percent of customers are “entrenched” in their commitment to their banks, approximately 15 percent are identified as “convertible” with a further 26 percent indicating that commitment to their main bank is “shallow.” This suggests that more needs to be done by banks to improve customer commitment levels and consolidate their customer base.

Dave Hannay, director, Taylor Nelson Sofres Finance commented: “Clearly, there will always be a proportion of customers with every bank whose commitment levels are so low that they can easily be targeted by competitor organisations as potential, new customers. However, there is also a significant proportion of seemingly loyal customers whom banks should be trying more actively to target to reduce the relatively high levels of ‘churn’ which currently exist in this sector.”

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