how banks can stop hidden defections · customers who are promoters of their bank: traditional...

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54 62 31 34 Customers who are promoters of their bank: Traditional banks are losing customers to digital insurgents and may not even know it. Here’s how banks can fight back. BIG BANKS ARE LEAKING CUSTOMERS KILL THE ANNOYING EPISODES Despite a low overall share initially, digitally native companies are grabbing an outsized share of new business from traditional banks. It pays for banks to use digital to solve customer needs the first time, without forcing them to resort to a phone call or branch visit. Banks can also boost loyalty by reducing episodes likely to annoy, such as fee disputes and having a card declined at the point of sale. Average number of episodes annually per US respondent, checking and savings Dispute a bank fee Address a declined point-of-sale transaction 0.12 For example… 3% Own more products Spend more on primary credit card Are more likely to buy next product from primary bank Overall adoption Adoption by younger customers opening account (past 12 months) Mobile-only bank based in UK Online-only mortgage company in the US Monzo Episodes of opening a new checking account at 20 major traditional US banks Digital, got it right the first time Human, got it right the first time Digital, didn’t get it right the first time Human, didn’t get it right the first time Highest NPS®, lowest cost to serve Lowest cost Loyalty leader Loyalty laggard Loyalty leader Loyalty laggard Cost per occurrence Much higher cost ® ® ® ® LOYALTY PAYS OFF 0.20 0.28 0.14 How Banks Can Stop Hidden Defections Episode Net Promoter Score® Ultimately, they are less likely to defect to competitors. 2% Rocket Mortgage Overall adoption Share of total outflow from customers’ primary bank HOW TO PLUG THE LEAKS As Retail Banks Leak Value, Here's How to Stop It www.bain.com/bank-loyalty-2019 Read more: 17% 13%

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Page 1: How Banks Can Stop Hidden Defections · Customers who are promoters of their bank: Traditional banks are losing customers to digital insurgents and may not even know it. Here’s

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Customers who are promoters of their bank:

Traditional banks are losing customers to digital insurgents and may not even know it. Here’s how banks can fight back.

BIG BANKS ARE LEAKING CUSTOMERS

KILL THE ANNOYING EPISODES

Despite a low overall share initially, digitally native companies are grabbing an outsized share of new business from traditional banks.

It pays for banks to use digital to solve customer needs the first time, without forcing them to resort to a phone call or branch visit.

Banks can also boost loyalty by reducing episodes likely to annoy, such as fee disputes and having a card declined at the point of sale.

Average number of episodes annually per US respondent, checking and savings

Dispute a bank fee

Address a declined point-of-sale transaction

0.12

For example…

3%

Own more products

Spend more on primary credit card

Are more likely to buy next product from primary bank

Overall adoption

Adoption by younger customers opening

account (past 12 months)

Mobile-only bank based in UK Online-only mortgage company in the USMonzo

Episodes of opening a new checking account at 20 major traditional US banks

Digital, got it right

the first time

Human, got it right

the first time

Digital, didn’t get it

right the first time

Human, didn’t get it

right the first time

Highest NPS®, lowest cost to serve

Lowest cost

Loyalty leader

Loyalty laggard

Loyalty leader

Loyalty laggard

Cost per occurrence

Much higher cost

®® ®®

LOYALTY PAYS OFF

0.20

0.28

0.14

How Banks Can Stop Hidden Defections

Episode Net Promoter Score®

Ultimately, they are less likely to defect to

competitors.

2%

Rocket Mortgage

Overall adoption

Share of total outflow from customers’

primary bank

HOW TO PLUG THE LEAKS

As Retail Banks Leak Value, Here's How to Stop Itwww.bain.com/bank-loyalty-2019

Read more:

17%13%