Swiss consumers are less loyal to their bank than is widely believed, a new study shows. This is what banks can do to fend of new challengers.
The customers of Swiss banks in general are said to be very reluctant to change their bank. This may be about to change though, a study by Bain & Company suggests (link to the German version for Switzerland).
The management consultancy showed in the study how customers who are using the mobile-banking offering of their bank became more loyal – 26 percent more loyal than the clients who don’t do mobile-phone banking.
Mobile Banking a Loyalty Tool
Their loyalty has a direct effect on how intensive the relationship to the institute gets: loyal clients own more of their bank’s products, they buy more financial products and change less frequently.
The study also showed that Swiss banking clients expect ever more of their mobile-banking service. Banks therefore are well advised to invest in and expand the digital offering, said Dirk Vater, a partner at Bain and head of the financial services group in Europe, Middle East and Africa.
Investments in Digital Offering Pays Off
The competition from outside the traditional banking industry is vibrant enough – even if there are no comprehensive banking offerings available from fintechs and tech companies in Switzerland yet.
It is only a question of time before these challengers will provide such services and the latent willingness to change is a risk for the banking industry, said the Bain consultants. Their advice to banks: the simpler and more convincing their digital offering, the more relaxed they can be about new competition.
The Numbers Look Worrying
A survey that covered 134,000 bank clients – with 1,900 of the based in Switzerland – revealed that every fourth Swiss is ready to buy a financial product from a fintech. And 30 percent are happy to buy a financial product from an established tech company.
Even more worrying are the numbers for young clients: 45 percent of clients aged 18 to 24 years and 40 percent of clients aged 25 to 34 years are ready to do their banking with companies such as Amazon, Facebook and Google.
The Answer: Build an Eco-System
Another way to strengthen the bond to clients is to develop a so-called eco-system. This concept much favored by insurance firms entails a web of services built around one topic – such as mortgages, liability and property insurance, mover services etc for homeowners.
The Bain study showed that three out of four Swiss are interested in using such eco-systems.
