Loyalty in Financial Services – Consumer Analysis
Amidst the ongoing cost-of-living crisis, consumers want good value for their money. While competitive pricing is a priority for consumers, there is also an expectation that loyalty should be acknowledged and rewarded.
A significant challenge in financial services is addressing consumer scepticism about the benefits of loyalty. Many customers think financial service providers prioritise new customers over existing ones, strengthening the idea that providers are more focused on profit than fostering long-term relationships. This view risks undermining trust, making it critical for providers to adopt fair pricing strategies and implement schemes that visibly value loyal customers.
Improving customer service offers significant potential for boosting loyalty, as over half of adults think quality customer service is the most important factor in building loyalty. By providing prompt and accessible assistance and ensuring staff are trained to resolve issues empathetically and efficiently, providers can alleviate pain points, transforming customer interactions into meaningful connections.
Key Topics Analysed in the Report
- Loyalty perceptions across different sectors, including financial services
- Generational differences in loyalty perceptions
- The role of customer service, pricing and rewards in loyalty
- Consumer expectations, values and perspectives on loyalty
- Competitive strategies and innovation shaping loyalty
What is Loyalty in Financial Services?
Loyalty is a two-way relationship between customers and providers and can mean different things to different people and different providers. Broadly speaking, loyalty represents the strength of the relationship between consumers and providers, shaped by key factors such as trust, customer satisfaction and switching behaviour. It is a mutually reinforcing dynamic where consumers seek value, reliability and fairness, while providers aim to nurture long-term connections and regular engagement.
Meet the Expert Behind the Analysis
This report was written by Stefania Apostol, Senior Financial Services Analyst at Mintel. Stefania joined the Financial Services Reports team in March 2021, having previously worked for Mintel’s MFD, Disruptor and GNPD products. In her current role, she researches and writes Mintel Reports on consumer financial services in the UK.
While consumers seeking value for money expect to be rewarded for being loyal, there is widespread scepticism about the benefits of loyalty.
Stefania Apostol
Senior Financial Services Analyst
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EXECUTIVE SUMMARY
- Opportunities
- Deliver value and reward loyalty to meet consumer expectations
- Build customer loyalty with effective customer service
- Different generational views on loyalty create opportunities
- Market dynamics
- The cost-of-living crisis has implications for consumer loyalty in financial services
- What consumers want and why
- Building societies and banks top financial loyalty perceptions
- Most account holders maintain enduring relationships with their providers
- Graph 1: current account tenure, 2024
- Long-term relationships are the strongest indicator of loyalty
- Younger generations are more likely to see proactive actions as loyalty indicators
- Graph 2: selected consumer measures of loyalty to a financial services provider, by generation, 2024
- Quality of customer service is the most important factor in building loyalty
- Consumers expect loyalty to be rewarded with better deals
- Innovation and marketing
- Current account providers use cashback for loyalty and incentives for switching
- Financial services providers employ diverse strategies to build loyalty
- Financial services providers launch tailored offerings to foster customer loyalty
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MARKET DYNAMICS
- Market drivers
- Inflation eases
- Graph 3: CPI inflation rate, 2021-25
- Most people are still feeling the effects of higher prices
- Graph 4: issues faced in the last two months, 2025
- Financial wellbeing is fragile
- Graph 5: the financial wellbeing index, 2016-25
- Nearly all adults possess a financial product
- Graph 6: financial product ownership, 2024
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WHAT CONSUMERS WANT AND WHY
- Loyalty perceptions across different sectors
- Supermarkets are seen as the most likely to reward loyalty…
- Graph 7: perceptions of how different sectors reward customer loyalty, 2024
- …as reward schemes help consumers save money
- Building societies and banks top financial loyalty perceptions
- Nationwide’s advertising campaign showcases its mutual model
- Younger generations are more inclined to believe digital banks reward loyalty
- Graph 8: perceptions of how digital banks reward customer loyalty, by generation, 2024
- Address customer concerns to strengthen loyalty in insurance
- Adults with precarious finances are less likely to think financial services providers reward loyalty
- Graph 9: financial services sectors seen as not rewarding customer loyalty, 2024
- Current account tenure
- Most account holders maintain enduring relationships with their providers…
- Graph 10: current account tenure, 2024
- …despite the Current Account Switch Service’s campaign encouraging the public to consider switching
- Older adults favour long-term account providers
- Build long-term loyalty with younger generations
- Consumer measures of financial loyalty
- Long-term relationships are the strongest indicator of loyalty
- Graph 11: consumer measures of loyalty to a financial services provider, 2024
- Older generations are the most likely to view long-term relationships as a sign of loyalty
- Graph 12: agreement with ‘being a customer for a long time’ as a measure of loyalty to a financial services provider, by generation, 2024
- Younger generations see proactive actions as loyalty indicators
- Graph 13: selected consumer measures of loyalty to a financial services provider, by generation, 2024
- Holding high-value products signals loyalty for well-off households
- Factors driving loyalty in financial services
- Quality of customer service is the most important factor in building loyalty
- Graph 14: most important factors in building loyalty between financial service providers and customers, 2024
- Build customer loyalty with effective customer service
- Graph 15: quality of customer service as a factor in building loyalty between financial service providers and customers, by generation, 2024
- Competitive pricing builds customer loyalty in insurance
- Rewards programmes drive loyalty
- Graph 16: rewards programme as a factor in building loyalty between financial service providers and customers, by generation, 2024
- Consumer expectations and attitudes towards loyalty
- Consumers want good value for their money…
- Graph 17: selected attitudes towards loyalty in financial services, 2024
- …but expect loyal customers to be rewarded with better deals
- Make customers feel valued
- Younger generations prefer financial providers that share their values
- Graph 18: agreement with the statement ‘It is important to use financial service providers that have values aligned with your own’, by generation, 2024
- Perspectives on loyalty in financial services
- The benefits of loyalty are met with widespread scepticism
- Graph 19: selected attitudes towards loyalty in financial services, 2024
- Reinforce customer loyalty with transparent and fair pricing
- Financial services providers are seen as valuing profit over loyalty
- Younger consumers value loyalty
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INNOVATION AND MARKETING TRENDS
- Competitive strategies
- Current account providers use cashback and discounts to encourage loyalty
- Incentives for switching aim to challenge long-standing customer-bank relationships
- Credit card providers offer rewards to encourage loyalty
- Rewards are also offered in the BNPL space
- Insurers and comparison websites use rewards to attract customers
- Financial service providers use refer-a-friend programmes to boost acquisition and loyalty
- Building societies reinforce loyalty through tailored products and initiatives
- Barclays acquires Tesco Bank
- Launch activity and innovation
- HSBC updates its Premier account
- Revolut launches RevPoints loyalty programme
- TSB introduces new rewards portal
- Vitality launches Pick and Play
- The AA partners with NatWest Boxed to offer new financial products
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APPENDIX
- Report scope and definitions
- Market definition
- Abbreviations and terms
- Consumer research methodology
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