Bank customer loyalty still tied to service

Many companies are struggling to weather the turbulent economy and global recession, with financial institutions finding themselves especially challenged in the current environment, according to a survey by relationship management firm Convergys.

The survey focused on what customers consider important in their relationships with banks, which contact channels they use to interact with banks, key drivers of loyalty, and customer interest in emerging services.

The resulting Recent Trends in Retail Banking report notes that, while nearly 22% of respondents hold banks responsible for current economic conditions, this attitude is not having a significant impact on customer loyalty.

In fact, the company found, the most important factor currently driving loyalty to banks is good customer service.

Among the main findings of the research:

• Nearly half of customers' loyalty to their primary bank is driven by two service-related factors: bank employees and issue resolution;
   
• Resolving customer issues the first time was cited as the most important factor in the primary bank relationship by 29% of respondents. Nearly half of all calls into the contact centre involve an issue or dispute;
   
• Retail banking is truly a multi-channel experience as 40% customers contacted their bank through the web, the phone, and by visiting a branch in the past year;
   
• Some 89% of customers who contacted their bank online in the past 12 months were satisfied with the experience, yet 72% of all banking activity reported still occurs in the branch;
   
• Slightly more than half (55%) said they would stay with their bank if another bank offered an incentive to switch;
   
• Approximately 40% of bank customers would consider new products and services, with financial/estate planning and online brokerage services generating the most interest.

"Banks face turbulent economic times, stiffer competition, and increasing legislation. At the same time, they have to balance cost of service, an increasing focus on customer satisfaction, building loyalty and profitability. In order to do this, banks need to be nimble in supporting their customers regardless of service channel while also providing their customers with the highest level of security and identify theft protection," commented Jim Boyce, president of global business units for Convergys.