Data & Analytics

08:30 AM
Connect Directly
Facebook
Twitter
Google+
RSS
E-Mail
50%
50%

Survey: U.S. Banks Under-Leveraging Customer Loyalty

Bank customers are taking advantage of a competitive environment to shop around for credit and investment products, a FICO survey finds.

A survey conducted by FICO has found that banks are under-leveraging their customer bases and missing out on opportunities for cross-selling additional services.

The online survey of 991 U.S. banking customers found that consumers today use 6.05 banking services on average, but use only 3.37 of these services from their primary bank (defined as one where they keep their checking account). Only 30 percent of consumers surveyed have relationships with their primary bank that extend beyond checking, debit and savings.

Meanwhile, 78 percent of those polled reported being satisfied with their primary bank, and half have done business with their primary bank for more than a decade. Yet, consumers are going outside their primary bank for nearly half of their banking services. While just 5 percent of consumers use a secondary bank for checking and savings, 42 percent use a secondary bank for a credit card, 24 percent for a mortgage, 24 percent for an auto loan, and 27 percent for an IRA, the survey found.

Overall, Millennials (those aged 25 to 34) use the fewest banking services (5.78), although 60 percent of those services are with their primary bank. Two out of three Millennials use a large national bank for their primary banking services. Members of Generation X (ages 35 to 49) have the most banking services (6.27), with 55 percent of those services coming from their primary bank, the survey found.

[Related Content: Bank Loyalty Marketing: 4 Steps for Effective Cross-Selling]

Bryan Yurcan is associate editor for Bank Systems and Technology. He has worked in various editorial capacities for newspapers and magazines for the past 8 years. After beginning his career as a municipal and courts reporter for daily newspapers in upstate New York, Bryan has ... View Full Bio

Comment  | 
Print  | 
More Insights
Comments
Newest First  |  Oldest First  |  Threaded View
anon1149731143
100%
0%
anon1149731143,
User Rank: Apprentice
7/15/2014 | 5:22:09 AM
re: Survey: U.S. Banks Under-Leveraging Customer Loyalty
Well said, Leveraging Customer Loyalty program is a good thing to beat rival. However banks should provide reliable and best service to make thier loyal customer not by reward programs.
Kelly22
50%
50%
Kelly22,
User Rank: Author
7/1/2014 | 4:58:08 PM
re: Survey: U.S. Banks Under-Leveraging Customer Loyalty
Insurers really should be paying attention. Right now consumers still have loyalty to traditional institutions, but as more customers become willing to try other options I think we'll see some new competition in the insurance space.
KBurger
50%
50%
KBurger,
User Rank: Author
7/1/2014 | 1:48:54 PM
re: Survey: U.S. Banks Under-Leveraging Customer Loyalty
Kelly, as an aside, insurance companies should be watching (and learning from) these trends very closely. Right now it's primarily banks that are facing these kinds of disintermediation challenges, but as consumers become more tech-savvy & willing to deal with non-traditional FS providers,and as more tech companies see opportunities to disrupt traditional financial services, insurers could see the same kinds of new competition.
Kelly22
50%
50%
Kelly22,
User Rank: Author
6/30/2014 | 9:07:47 PM
re: Survey: U.S. Banks Under-Leveraging Customer Loyalty
True, there is still opportunity for banks to develop relationships with consumers. Hopefully we see more banks leverage customer loyalty before clients start to turn to outside competitors.
KBurger
50%
50%
KBurger,
User Rank: Author
6/30/2014 | 7:37:15 PM
re: Survey: U.S. Banks Under-Leveraging Customer Loyalty
You really can look at this glass-half-full or glass-half-empty. Good news is, it seems that most customers are open to having deeper relationships with their banks, banks just aren't doing a good enough job of leveraging that (but there's still opportunity for them to do so). Bad news is, a growing number of customers are finding ways to handle their financial services needs with non-bank providers (PayPal, Greendot, etc.). If the non-banks "get" how to leverage customer loyalty, it will be that much harder for banks to make up for lost time.
Kelly22
50%
50%
Kelly22,
User Rank: Author
6/30/2014 | 6:01:15 PM
re: Survey: U.S. Banks Under-Leveraging Customer Loyalty
Good point, Jon. Banks will have to work hard to retain customers that are so easily swayed by lower prices. Developing programs that reward customer loyalty could really help with that.
Jonathan_Camhi
50%
50%
Jonathan_Camhi,
User Rank: Author
6/30/2014 | 4:22:23 PM
re: Survey: U.S. Banks Under-Leveraging Customer Loyalty
Really illustrates the opportunity that exists in deepening customer relationships, something that bankers are always taking about. There's serious money to be made there. But customers today are more likely to just go online and search for the best price. You have to be proactive with offers to get ahead of that.
Register for Bank Systems & Technology Newsletters
White Papers
Current Issue
Bank Systems & Technology Dec. 2, 2014
BS&T's 2014 Elite 8 executives are leading their banks to success, whether it involves leveraging the cloud, modernizing core systems, or transforming into digital enterprises.
Slideshows
Video
Bank Systems & Technology Radio
Archived Audio Interviews
Join Bank Systems & Technology Associate Editor Bryan Yurcan, and guests Karen Massey and Jerry Silva from IDC Financial Insights, for a conversation about the firm's 11th annual FinTech rankings.