Most banks are finding it increasingly hard to gain new customers forcing them to search for new areas of growth, according to a report ‘2013 Customer Loyalty in Banking Report’ by Consulting group Bain & Company.
Scarcity of new customers has also led most banks to miss on opportunities to improve their existing customer relationships and give up their new product sales to competitors.
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The survey, which involved nearly 200,000 consumers in 27 countries, found two deciding factors for purchasing the new product – the customer’s loyalty to their primary bank and the bank’s ability to actively sell to its customers.
According to the report, around one-third of the banking products in the US are sold, not purchased. This is because customers do not plan to buy a product, but receive offer from banks and then they decide to purchase.
Bain global financial services practise partner and report author Gerard du Toit said the ‘easy growth’ is over for banks, as increased competition worldwide is forcing banks to fight over too few new customers.
"But there is a surprisingly large upside with existing customers to increase win rates on new product sales," du Toit added.
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By GlobalDataAmong different banks in the US, JPMorgan Chase posted the biggest loyalty gains in 2013, driven by initiative such as investing in mobile technology, improving customer experience, and effective marketing that helped people simplify their financial lives.
du Toit said, "Loyal banking customers own more products, and buy more products — but that doesn’t mean they’re going to make your sales for you."
