Multi-channel bank users are most at risk of defecting in 2017

Consumers who use multiple channels to interact with their bank are most likely to switch, according to research by GlobalData, a leading data and analytics company.

GlobalData’s ‘2017 Retail Banking Insight Survey’ found that only 5% of global bank account holders stated that they were ‘very likely’ to switch banks in the next 12 months, this rose to 9% among users who use three or more channels at least once a month.

The company’s research categorises retail banking consumers into three sub categories:

Multi-channel user: Employs three or more channels from branches, call centres, online and mobile – at least once a month.

Digital enthusiast: Employs the use of online or mobile banking at least once a month, and uses all other channels less than once a month.

Branch traditionalist: Visits a bank branch at least once a month and rarely employs other channels

Patrick Brusnahan, Finance Analyst from GlobalData commented, “Consumers who use fewer channels tend to display higher levels of loyalty, with smaller proportions of both digital enthusiasts and branch traditionalists claiming to be ‘likely’ to switch providers. Multi-channel users are more profitable, holding on average two more products than branch traditionalists and one more than digital enthusiasts.”

Further analysis reveals that multi-channel users have the highest net promoter scores, suggesting these type of consumers are most satisfied with their bank, even with their lack of loyalty. This runs counter to their lack of loyalty, yet behavioural data offers an explanation. Multi-channel users are the first to try new products. These consumers are future-forward and attracted by novelty, therefore more open to the idea of changing banks in order for a better customer experience, even when they may have no complaints against their existing provider.

Brusnahan added, ‘‘In order to retain these consumers banks have to engage in a policy of continuous improvement to their products and services. Digital channels offer the greater opportunity for differentiation, and banks should exploit the latest AI-driven technologies to provide advanced financial analysis tools to their customers.’’

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