Banking brands must adapt

03 July 2012

NEW YORK: Nearly 90% of consumers around the world are satisfied with their bank, but brand owners must tackle declining trust, decreasing loyalty and the rise of social media, Ernst & Young has argued.

The advisory group polled 28,560 adults in 35 markets, some 68% of which were "satisfied" with their main account provider, alongside 19% describing their position at "very satisfied", meaning 87% had a favourable impression overall.

However, precisely 40% of contributors had "lost trust" in the banking industry during the last year, compared with 18% who reported "gaining trust" in the same period.

Negative ratings hit 72% in the European Union, growing from 48% just 12 months ago. Italy logged 72%, with Spain on 76%.

But over 70% of the Indian panel, by contrast, had more faith in their banks than they did in 2011.

Globally, 12% of the sample planned to switch banks this year, up from 7% on an annual basis. China's totals rose from 13% to 23%, with Brazil posting a lift from 7% to 20%. India's scores jumped from 11% to 19%.

The analysis also revealed that "multi-banking" is on the rise, as the number of respondents using one provider contracted from 41% to 31%, and those with three or more climbed from 21% to 32%.

When seeking advice on banking products, 71% of shoppers turn to their family, friends and colleagues, ahead of comparison websites with 65%, financial advisors with 60%, media reports with 57%, ads with 57% and web communities with 43%.

More specifically, word of mouth was particularly influential in China on 84%, India on 82% and Brazil on 77%. Figures fell to 63% for the US and 59% for Japan, the lowest returns on this metric.

Similar trends were observable for social media, which 44% of consumers used to undertake at least some banking-related activities, reaching 81% in China and 61% in India, versus 31% in the European Union and 13% in the US.

"The use of social media as a source of banking information is amplifying customers' voices, giving them greater power as advocates or critics," said Pierre Pilorge, Ernst & Young's financial services advisory markets leader for Europe, Middle East, India and Africa.

Elsewhere, only 44% of interviewees agreed their bank adapted the products and services they offered to meet changing financial needs, while 70% would provide more personal information to help achieve this.

The web is also playing an increasingly important role in consumer activity more broadly, with 47% now preferring to complete simple transactions via this route. Branches retain such a role for complex transactions, on 71%.

Data sourced from Ernst & Young; additional content by Warc staff