Originally posted on forwardbanker.com.
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The level of consumers who use multiple financial institutions is quite high, and the level of customers considering switching institutions also rose last year. This could prompt some financial institutions to review their policies through important financial decisions in order to be sure that customers not only have what they need, but also that they will lead with their strong points.
Switching: Customers who considered switching financial institutions in 2012 rose to more than 10 percent, which is slightly higher than the seven percent recorded the previous year, according to a report from Ernst & Young. One reason for the switches is the continued fee changes by some financial institutions, which upset approximately half of the customers.
Multi-banking: There also was an increase in those who started to use more than one financial institution. The amount of consumers who used just one financial institution in 2012 was slightly more than 30 percent. This was markedly lower than in 2011, when more than two-fifths of those polled used one financial institution, the firm’s Global Consumer Banking Survey noted. People who had connections to three or more financial institutions rose to nearly one-third last year, while the figure was two-fifths of all respondents in 2011.
Confidence: More customers noted their confidence in the industry waned in recent months. A total of 40 percent explained the past year hurt their sentiment of the industry, the report said. Approximately 20 percent, meanwhile, said they actually were gaining confidence in the banking market.
Financial institutions should examine consumer relationship practices based on these messages.
While consumers may be looking at other banks or credit unions to fill different needs, some financial institutions may want to look for what they are strongest at. If this is done, executives may be able to put a focus on that aspect of banking, which could help improve and build relationships with customers.
Another option is exploring new aspects of banking or enhancing current offerings. For example, some financial institutions may want to further examine mobile banking options, or work to improve their online presence. These features may convince customers to not only stay, but it could appeal to more consumers.
What is your financial institution doing to not only retain customers, but to give them the best options available?
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