UK banks ‘must focus more on customer loyalty’
Written by Anthony Strzalek
The majority of UK consumers under the age of 35 think that banks and lenders must do more to improve customer loyalty, as 61 per cent said they expect to switch accounts more frequently, a new study has found.
The survey by Feefo of more than 1,000 consumers showed that 88 per cent of under 35s believe banks must do more to keep them loyal.
With 12 per cent of respondents describing themselves as not loyal, UK banks and lenders are now in danger of sustaining severe losses of more than £1 billion in the £8.7 billion current account market, £156 billion in the £1.3 trillion mortgage market and more than £8 billion in the £67 billion credit card market, Feefo predicts.
While almost 90 per cent of respondents said they are very or quite loyal to their banking provider, 77 per cent said they would feel more loyal if they could see their bank or lender was listening to them.
And although more than half (54 per cent) view competitive rates and charges as important, 85 per cent are influenced in their choice of provider by positive customer reviews. Reviews are even more influential than word-of-mouth recommendations from friends and family (chosen by 82 per cent of respondents).
Even 82 per cent of customers who have never switched accounts so far, said positive customer reviews influence them. The survey also found that 81 per cent of respondents would be persuaded to opt for a bank by a cash-back deal linked to a current account, while 79 per cent said a cash bonus would tempt them.
Matt West, CMO at Feefo, said: “There is a big storm brewing for UK banks and lenders unless they do far more to engage with the under-35s.
“Although it was a surprise that the vast majority of Millennials regard themselves as loyal, if banks, building societies and credit card companies want to turn them into life-time customers they need to ensure they are open and transparent and respond to their requirements. It’s not just about having the most competitive offers.”