More Customers Are Churning from Their Bank Than Ever Before

Really?  After all of the time I spent a few years ago setting up my online banking, automatic payment, electronic statements and such, I don’t think I am going to be changing anytime soon, but in a recent survey conducted by J. D. Powers and Associates, released in March of 2011, it was found that customers were switching banks more and choosing new ones based mainly on advertising, convenience and customer experience!  As mergers and acquisition in the Banking space continue and related problems ensue, customers are less loyal than ever!

Coupled with that, consumers expect more, not less from their bank. Studies report that 70% of smartphone users access mobile banking and payment services (Mobile Money Study) on a regular basis.  In addition to typical banking services, checking, savings, mortgage, etc., customers want all of these services available 24 hours a day, with applications for their mobile devices and the ability to do more and more online.

eMarketer reports that by the end of this year, there will be over a 100 million users who bank online and by 2015, 50% or more of U.S. mobile users will conduct transactions from their mobile devices!

And many banks are answering the call. Most major banks offer major services.  My bank has reduced my fees for doing everything online. As long as I don’t set foot into branch, they take less out of my account each month in fees.  And consumers are talking in droves online about their experiences with banks, explaining what they like and what they don’t like. Complaining about an experience they are having now with their bank or even complimenting their bank on services.  The chart below shows a sample of social media buzz about banks. Tens of thousands of conversations are happening about consumer banking experiences and preferences online each month.

And just like other industries that I’ve discussed in this blog, banking is not different in terms of the HUGE opportunity for companies to leverage these conversations as a business asset.  In fact, our banking and financial services customers – including Citibank, RBC, Wells Fargo, Charles Schwab, Vanguard and others are using our software everyday to understand the drivers of both loyalty and churn. And the insights are valuable  for everything from mitigating some of the churn that is happening in mass, to understanding how to service customers better, to identifying new product opportunities.  This chart shows customers who have said something that we categorize as “at risk” behavior. These comments include very negative comments and customers who explicitly say that they are thinking of switching banks.  You will see that fees and service issues are big drivers of attrition.  In a national survey conducted by Bankrate, released March 2011, “an overwhelming majority of Americans would consider moving their checking accounts rather than pay a fee increase” and through deeper analytics you can understand what fees they will accept and which they won’t.

And in some cases customers are pretty explicit about switching being directly related to fees….

But you will also see that while many customers do complain about their banks, many also don’t explicitly say why. For both groups – those who do tell you why and those who don’t – it is a great opportunity for response and for using the insights to be able to route the content to the right group for engagement.  Below is a screen shot of Attensity Respond with some example queues that would be very valuable for many of these institutions to have today!

So, if you want to figure out why your customers are leaving you – give us a call….this is only the start to what we can uncover about your industry and your customers!