Banking on customer loyalty: how can banks and financiers improve their retention strategies?

With fintech providers popping up worldwide and offering a brilliant customer experience through slick digital journeys and instant customer service, traditional high-street banks are now expected to deliver the same level of service but with less agile systems. If banks want to keep customers loyal, they need to provide a service that takes this agile approach—anything less just won't cut it.

However, some providers are being left behind. So it was no surprise when our latest research uncovered that almost a quarter of consumers admit they're not loyal to their bank/financial services provider, while just one in five feel their bank values them as a customer.

What do the numbers say?

After contacting 2,000 UK consumers, we found that just 18% believe it pays to be loyal to their bank or finance provider. Those surveyed noted good customer service, trust, and reliability as the most significant factors in their decision to stay with a provider.

We also found out that…

• 60% of consumers admit that bad interactions impact their loyalty to a brand and often result in them cutting ties.

• Half would pay a brand more for a product/service than their competitors if they trusted them and knew they were reliable.

• 24% would leave a brand if they found out they mistreated employees.

• 72% say they're loyal to their banking/finance provider.

• Almost a quarter of consumers admit they wish their bank offered them more perks.

• 25% confirm they're rarely offered any perks from their bank.

• Just 6% are often offered perks from their bank.

So, why are customer retention strategies for banks worth considering?

While the new approach to banking is exciting, different, and wholly necessary, customer retention in the banking industry is much trickier than it was a decade ago – especially for traditional institutions. It's not necessarily people switching providers that's the problem for banks – many customers now keep hold of their old accounts but open several others with a range of providers to fulfil different requirements. The problem is that one person's custom is typically split three or four ways rather than just one.

Countless innovations in recent times have made customer loyalty increasingly difficult for banks to maintain. As customers shop around to take advantage of new offerings and diversify their spending, this trend is only set to increase over the coming years as fintech continues to thrive. Therefore, financial services firms should consider their customer experience and loyalty schemes to get ahead before it's too late.

Our survey found that the factors likely to impact customer loyalty in financial services, ranked in order, are:

1. Good customer service.

2. Reliable & good quality product and service.

3. Trust in the brand and business.

4. A loyalty scheme.

5. Ethical business practices (including paying employees fairly and supporting employee well-being).

6. Receiving regular offers relevant to them.

7. Brand values that align with their personal values.

8. The business giving back to charities and communities.

9. More engaging, personalised, localised marketing.

So, there’s absolutely no question that trust, offers, and benefits play a massive part in customer retention - something that the Ello Group knows a thing or two about.

How can Ello’s customer retention strategies for banks help?

We're confident that the next few years will bring a wide range of opportunities for bankers and financers to make massive gains in loyalty. But it's all about using the available tools effectively. So, how can traditional and challenger banks keep pace with this constantly evolving market and grow a loyal customer base?

Ello Group takes the time to analyse customer behaviour and uses advanced technology to implement bespoke retention strategies for banks and financers. With our dining rewards, coffee shop rewards, entertainment benefits, cinema rewards, and more, your members can enjoy a wide range of must-have experiences for much less. 

Our loyalty and rewards platforms work to help your business stand out amongst others in the financial sector and strengthen customers’ trust in your reliability and care. So, make use of our customer loyalty solutions to prove to your customers that they are truly valued by your organisation.