Australia’s retail banks now have the opportunity to convert customer satisfaction into long-term loyalty, and then convert this loyalty into a profitable long term relationship with customers, new Unisys research shows.
The Unisys study, Customer Centricity in the Australian Retail Banking Market: Rewards and Sacrifices, focused on the views of Australian bank customers to discover the effect of banks' customer service initiatives and banking customers' preferences and habits.
"There's no doubt that Australia's banks are increasingly responding to the needs of their customers. What this new research does is quantify those needs," said Rob Dewar, managing partner financial services Unisys Australia-New Zealand.
"And it shows that customer satisfaction does not necessarily equal customer loyalty. "
The research also shows an increased appetite for more choice in electronic banking, and enhanced security around banking. Not surprisingly, every customer wants a unique banking experience. And critically, customers are seeking to be rewarded for their loyalty.
"This information on Australian consumers is all good news for the banks - they now need to plan how to deliver to these needs across multiple channels, in an increasingly competitive sector," said Mr Dewar.
The Unisys research found:
· 76 per cent of respondents would move their business to a bank that rewards loyalty;
· 87 per cent of respondents want unique banking experiences;
· 67 per cent of respondents want excellent customer service from every part of the bank they deal with; and,
· 91 per cent of respondents said they'd welcome more biometric technologies, to protect their identity and their transactions.
The research found that while 61 per cent of customers are satisfied with their bank, only 14 per cent consider themselves to be loyal.
"Trust and confidence are the foundations that banks must provide to establish and maintain a relationship with customers, upon which banks can build loyalty," said Mr Dewar.
"Security underpins confidence and trust with their customers. The more customers feel their banks meeting these foueting theting these foundational needs, the more customers feel satisfied and the more loyal they are likely to be. In practice, this includes accuracy in transactions and professional service, treating customers fairly, looking out for their best interests, and protecting their money and identity.
"New ways of protecting identity, such as fingerprint biometrics, retina scans and voice recognition, are important to customers. We believe that those banks that offer these types of features first will pull ahead of their competitors in reducing customer churn, and then building customer loyalty. "
Customers are also looking for a unique experience from their bank. Of course, one size does not fit all. Not all customers want the same relationship with a bank, nor do they want to bank in the same way. The better any bank understands the individual customers' needs, the more the bank can offer the right advice and product from a given portfolio - and then offer more.
"The majority of customers like bank staff to ask about their banking needs, and are happy for the banks to use their personal information to tailor solutions to meet their needs. The research shows the majority of customers feel this is a high area of priority," said Mr Dewar.
Customers also want to be rewarded for the size and longevity of their business. The research shows that three-quarters of respondents would consider moving all or most of their financial relationships to a new provider that rewards them for the size and quality of their business. And 71 per cent of respondents were interested in dealing with financial services companies who offer loyalty programmes similar to those offered by airlines.
"Again, rewards mean different things to different customers. Understanding an individual customer's preference will enable the bank to choose the right reward - perhaps from a finite range of options - that will help bind that customer to that bank," said Mr Dewar.
"The research shows that many people - 41 per cent - are enthusiastic about having a relationship with their bank. This is a good baseline for the banks to build on. And the way to do this is to match the portfolio of products to the customers, and match the technology required to this relationship."
The research confirms that if banks can extend relationships with customers, meet customers' preferences for unique experiences, provide loyalty rewards, and offer excellent service and new, secure technology, then customers' loyalty and advocacy will improve.