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