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Loyalty in Financial Services - US - December 2017

Loyalty is more than just a rewards program. It is not built on incentives, but on trust, something that is in relatively short supply in the financial services industry. Thinking about what consumers want and then building the tools to give it to them will go a long way toward developing and retaining a loyal customer base. Quality customer service, too, will help customers feel good about doing business with their provider and make it more difficult for them to switch to another option.

This report examines the following issues:

  • Satisfaction is high, recommendations are low
  • Most want a branch close to home
  • Trust is important to building loyalty

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Table of contents

  1. Overview

    • What you need to know
      • Definition
      • Executive Summary

        • The issues
          • Satisfaction is high, recommendations are low
            • Figure 1: Would recommend provider to others, by type of provider, September 2017
          • Most want a branch close to home
            • Figure 2: Important features in a bank or credit union, by gender and age, September 2017
          • Trust is important to building loyalty
            • Figure 3: Attitudes toward loyalty, by generation, September 2017
          • The opportunities
            • Hispanics are less likely to have any financial accounts
              • Figure 4: Account ownership, by Hispanic origin, September 2017
            • Half of parents need life insurance
              • Figure 5: Account ownership, by parental status, September 2017
            • Expand online and mobile capabilities
              • Figure 6: Important features in a financial service provider, by generation, September 2017
            • What it means
            • The Market – What You Need to Know

              • Number of institutions continues to decline
                • Growth of alternative institutions
                • Market Factors

                  • Number of institutions continues to decline
                    • Figure 7: Number of banks and credit unions, 1997-June 30, 2017
                  • Growth of alternative institutions
                    • Figure 8: Attitudes toward online/mobile services, by gender and age, June 2017
                • Key Players – What You Need to Know

                  • Most are satisfied with their FSIs
                    • Trust is still a concern
                      • Many wouldn’t recommend their provider
                        • Growth of AI
                          • Branch evolution
                          • What’s Working?

                            • Most are satisfied with their FSIs
                              • Figure 9: Satisfaction with financial services institutions, September 2017
                          • What’s Struggling?

                            • Many wouldn’t recommend their provider
                              • Figure 10: Would recommend provider, by type of provider, September 2017
                            • Trust is still a concern
                              • Figure 11: Attitudes toward loyalty, by generation, September 2017
                            • How do consumers define trust?
                            • What’s Next?

                              • Growth of AI
                                • Branch evolution
                                • What Are Consumers Saying About Brands?

                                  • Negative comments outweigh positive comments
                                      • Figure 12: Trusted brands, September 2017
                                    • Positive comments:
                                      • Negative comments:
                                      • The Consumer – What You Need to Know

                                        • Low fees and convenience are most important
                                          • Money market customers want more
                                            • Young men are especially vulnerable
                                              • Rates are the most common reason for switching
                                                • Older customers rely on trust; younger customers want incentives
                                                  • Banks need to work to keep young Hispanic customers
                                                  • Account Ownership

                                                    • Money market owners have more different accounts
                                                      • Figure 13: Account ownership, by accounts owned, September 2017
                                                      • Figure 14: US Bank cross-selling mobile ad, 2015
                                                  • Important Features in a Bank or Credit Union

                                                    • Low fees and convenience are most important
                                                      • Figure 15: Important features, September 2017
                                                    • Easy access is more important to parents
                                                      • Figure 16: Important features, by parental status, September 2017
                                                    • Money market customers want more
                                                      • Figure 17: Important features, by type of account owned, September 2017
                                                      • Figure 18: Valley National Bank email ad, 2017
                                                    • What do consumers want?
                                                        • Figure 19: SELCO mobile ad, 2017
                                                      • Making customers feel valued is crucial
                                                      • TURF Analysis

                                                        • Methodology
                                                          • Figure 20: TURF analysis – Important features in financial services provider, September 2017
                                                      • Switching Behavior

                                                        • Young men are especially vulnerable
                                                          • Figure 21: Switched banks/credit unions, credit cards, or investment company, by gender and age, September 2017
                                                        • Nearly one quarter of young Hispanics have switched banks or credit unions
                                                          • Figure 22: Switched banks or credit unions, by Hispanic origin, September 2017
                                                        • Millennials are most likely to switch investment companies
                                                          • Figure 23: Switched investment companies, by generation, September 2017
                                                        • Millennials most at risk to switch insurance provider
                                                          • Figure 24: Switched auto, homeowner’s/renter’s, life insurance, by generation, September 2017
                                                        • Parents are twice as likely to switch auto insurers
                                                          • Figure 25: Switched auto insurance providers, by parental status, September 2017
                                                        • Rates are the most common reason for switching
                                                          • Figure 26: Reason for switching financial services provider, by type of provider, September 2017
                                                          • Figure 27: State Farm mobile ad, 2017
                                                        • Men want better technology
                                                          • Figure 28: Reason for switching financial services provider, by gender, September 2017
                                                        • Trust is an issue for parents
                                                          • Figure 29: Reason for switching financial services provider, by parental status, September 2017
                                                      • Attitudes toward Loyalty

                                                        • Older customers rely on trust; younger customers want incentives
                                                          • Figure 30: Attitudes toward loyalty, by generation, September 2017
                                                          • Figure 31: Barclaycard online ad, 2017
                                                        • Banks need to work to keep young Hispanic customers
                                                          • Figure 32: Attitudes toward loyalty, by Hispanic origin and generation, September 2017
                                                        • Older consumers most likely to recommend insurance providers
                                                          • Figure 33: Attitudes toward loyalty, by generation, September 2017
                                                      • Appendix – Data Sources and Abbreviations

                                                        • Data sources
                                                          • Consumer survey data
                                                            • Consumer qualitative research
                                                              • Direct marketing creative
                                                                • Abbreviations

                                                                Loyalty in Financial Services - US - December 2017

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