Over the next three years, switching among financial services providers is expected to become increasingly common in the United Kingdom and Ireland. A recent Accenture survey suggests that consumers tend to leave their financial services providers—and choose new ones—based on the organisation’s ability to provide value for money, relevant products, and fast and efficient service.
In this report, Accenture reveals how financial institutions can use this information to hold on to existing customers and reach out to new ones.
Download the full report [PDF, 1.29MB]
Over the next three years, switching among financial services providers is expected to rise in the United Kingdom and Ireland. Here’s why:
The switching process is getting quicker and easier. Guaranteed seven-day account switching, which was launched by the Independent Commission on Banking in September 2013, promises banking consumers a simple and efficient process that is easy to initiate.
Customer awareness of switching opportunities is growing. A 2012 Accenture survey found that 15% of customers had switched their financial services provider in the past three years. Of those, 24% had switched more than once. As more customers go through the process and share their experiences, more will be encouraged to try.
New market players are giving customers more options. As more competitors enter the market and aggregators make it easier to compare offerings, switching is expected to increase. Tesco and Virgin Money are among the challengers that plan to launch current account offerings by the end of 2013 and cross-sell to existing customers.
Accenture’s 2012 survey of current account holders in the United Kingdom and Ireland revealed that five main factors are driving people to switch providers:
Poor value for money (34%)
A change in personal circumstances (26%)
Speed and efficiency of service (24%)
Inability to manage account in a way that suits them (23%)
Impolite and/or unknowledgeable staff (20%)
What that means is that financial institutions can improve customer loyalty and boost acquisition at the same time by:
Creating competitive and compelling products that add value.
Delivering relevant products that suit customers today and evolve with their changing needs.
Developing efficient core processes that offer responsive and integrated service across channels.
As switching among financial services providers becomes increasingly common in the United Kingdom and Ireland, financial institutions will need to take steps to reduce their cost of acquiring new business and ensure a steady net inflow of customers each year.
Accenture recommends the following actions:
Simplify processes to improve customer interactions and keep costs low.
Clearly articulate product benefits, fees and charges.
Create customer propositions that are targeted, relevant and compelling.
Use analytics to identify and engage customers who are at risk of switching.
Initiate a customer-focused cultural transformation to redefine the customer experience.