The UK payments council released data last week that shows that the number of current account switchers surpassed one million, a rise of nearly 20% year on year as the new account “switch guarantee” was established to drive competition in the past.
To say that ‘switchers’ were few and far between in the past would be no exaggeration – even with the phenomenal 19% growth in switchers, only 2% of current account holders in the UK have moved. But you don’t need to be an economist to see that, the way the trend is heading, it’s going to be more and more important for banks to marshal customer loyalty throughout their customer spectrum.
Whilst a large proportion of the switchers are attributed to better interest rates and cashback deals, we think the longer term view is more significant than that. After all, many people choose premium services for a better experience. In our view, three things in particular are key:
- Quality of service – a slick customer experience in every platform – in-bank, online, and on the phone is vital to supporting a variegated customer base with its needs.
- Choice of engagement platform – more and more customers in the youth market will demand advanced mobile and online banking services, (and indeed, many banks are investing accordingly) and yet there are still banks around the world with relatively unsophisticated offerings from a Smartphone perspective, limited by their ability to secure m-banking transactions. Other customers will require phone and in-person support – maintaining a degree of choice (whilst containing the cost of doing so) will be vital.
- Maintaining a pristine security reputation – with growing reports of cyber criminal activity on a phenomenal scale, giving people the confidence that your data is safe is vital to maintaining loyalty.
We’re talking to young people this Fall, looking at their views across multiple markets of their bank account providers and services, and early findings indicate that quite dramatic proportions of youths in different market would react very dramatically to breaches at their banks, and indeed to a lack of choice in engagement platform. Watch this space for more insights from our Generation M study.