Despite a more dynamic financial landscape, most UK consumers still have a passive relationship with their banks. Moreover, ramping up consumers’ financial literacy remains a work in progress. On a positive note, there is an opportunity for banks to win market share if they can improve current disappointing levels of customer engagement.
These are just three takeaways from research released by Accenture. Specifically, the Accenture Banking Consumer Survey reveals that some 24% of UK consumers would not move their money to a new provider for any interest rate. But at the same time, 67% of consumers hold accounts with multiple providers. This does underscore a shift in behaviour that challenges traditional bank loyalty.
Faced with a sea of sameness, customers are increasingly turning to other providers for added value, notes Accenture.
This further underscores the importance of narrowing the customer relationship gap by establishing a foundation of trust, prioritising meaningful interactions and personalising services. Building lasting loyalty will ultimately transform satisfied customers into advocates who actively recommend their bank to others.
Financial knowledge levels are alarmingly low
There’s a significant opportunity for banks to better connect with their customers. Based on Accenture analysis, only 23% of UK consumers have an adequate/good understanding of basic financial topics such as interest rates, investment diversification, and the risk-return tradeoff. At the same time, some 72% are interested in expanding their financial knowledge. Empowering customers to take control of their finances could strengthen relationships and build long-term trust.
According to the research, 46% of consumers are interested in personalised retirement planning tools. The report also finds that 43% want access to financial wellness programmes and 42% would value financial coaching or advisory sessions
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By GlobalDataHowever, UK banks currently score just 3.8 out of 5 in offering a personalised product range, with AI being essential in enabling this transition. Slightly more than half (51%) of UK consumers say they would be open to AI support in analysing their data to provide more relevant, tailored product recommendations. More than half (55%) are open to using an ‘Intelligent Agent’ to help with simple or complex banking tasks.
European Banks with the highest customer advocacy scores are growing revenues 70% faster globally, with those that succeed not just winning more transactions, but deeper relationships.
Rebecca Bezzina, Accenture Song’s UKIA marketing practice lead, says that advocacy is the new battleground for banks.
“In a world where switching is easy and loyalty is passive, it’s no longer enough to be the default option. Customers want more than functional service; they want to feel understood, valued and supported in their financial lives. UK banks must act now to transform ‘lazy loyalists’ into engaged advocates, those who feel understood, supported, and rewarded,” says Bezzina.
Switching has never been easier. But as this column notes every quarter, when it comes to primary current accounts, switching levels remain stuck at around 2% per year.
From transactional relationships to meaningful engagement
Accenture advocates that banks must focus on providing personalised, relevant and continuous value. They must demonstrate a genuine understanding of their customers’ lives and needs. It concludes that banks that can pivot from transactional relationships to meaningful engagement, will be able to turn everyday customers into powerful advocates.
To achieve that, some thought needs to be given across to the sector to the reasons for the apparently dismal levels of financial literacy.
