New research has revealed consumer loyalty to the UK’s banking and finance sector is declining amongst consumers, dropping almost 10% in a year. The data from Ello revealed 63% of UK consumers are loyal to their bank/finance provider, dropping from 72% in 2021.
The nationwide 1,000 consumer survey also revealed only one in 10 (10%) believe their current bank/finance provider understands them as a customer, with just 8% feeling a connection and loyalty to their existing provider. While less than one in five (19%) have been loyal to their provider for more than 3 years and only 16% trust their current preferred bank/finance provider.
The cost of living crisis across the UK is leading to a rise in brand switching amongst consumers, with those in financial services being urged to support their customers in helping to alleviate this pressure. The data uncovered almost one in five (17%) have switched supermarkets to save on rising food prices, with a further 15% considering switching supermarkets in response to price increases. Close to a third (29%) also say their energy is now unaffordable.
On the key factors influencing a consumer’s decision to stick with a bank/finance provider long-term, the data revealed these are the top areas of importance:
- Trust (28%)
- Good customer service (27%)
- Reliability (23%)
- Price (15%)
- Quality of product/service (15%)
On the factors likely to improve trust in banking/finance brands, consumers are looking for:
- Brands to showcase they listen/know their customers – 19%
- Brands to absorb some of the increasing costs throughout supply chains, to help with the rising cost of living – 13%
- Brands to offer discounts at relevant places to help offset some of the rising cost of living – 12%
Michael Kalli, managing director of Ello, commented: “The UK’s banking and finance sector has evolved considerably in recent years with the rise in challenger banks resulting in the marketplace being more competitive than ever before. Add a global pandemic, economic crisis and several other factors to the mix, and the sector has an impossible situation on its hands.
“However, during times of economic crisis, consumers typically turn to their bank/finance provider for support in alleviating such pressure and there’s opportunity for those who are fighting for market share to stand out from the crowd when it comes to easing this burden.”
The research also uncovered:
- Almost one in ten (8%) would remain loyal if their existing bank/finance provider could help them make cost savings in other areas (e.g. eating out, food/drink, travel/leisure)
- 41% are spending less on out of home experiences, such as eating out, due to the rising cost of living
- A third (33%) can’t afford to spend on experiences with friends/family, due to the rising cost of living
- Almost half (43%) think brands should be absorbing rising prices to support their customers
- 40% have had to scale back their spending recently, due to their disposable income being reduced
- Two in five (42%) are more likely to stay loyal to brands who can offer them discounts on other products/services they buy
“While price rises are inevitable, and in many cases out of the control of those across the sector, the data offers some food for thought on other opportunities to ease the impact of the escalating economic crisis on consumers,” concludes Michael.
