Banks learn secrets of protecting market share

Retail banking marketers should personalise customer interactions, communicate ESG efforts and showcase their digital sales process if they are to maintain market share, research shows.

A poll conducted among 29,805 consumers by Bain & Company found that the UK now ranks fourth highest, globally, for consumers with three or more banking relationships, behind only Brazil, Hong Kong, and India. This fragmented landscape means it is becoming increasingly difficult to keep hold of market share.

“Few banks have managed to refine their digital channels to the extent that virtually all consumers are able to complete a task digitally on their first attempt,” the researchers found.

“For banks that excel in the digital sales process, the payoff is substantial. In the UK, Revolut, Starling and Monzo Bank all boast digital account opening failure rates of less than 1% or 2% and they rank among the highest in the country in overall relationship net promoter scores (NPS).”

The research said that strong NPS mean customers stay longer, buy more, cost less to serve, and are more likely to recommend the organisation to friends and family.

The research also cautioned marketers who have focussed their entire #ESG marketing on corporate objectives.

“It’s still early days on the consumer side. Examples of promising initiatives include a cashback programme for customers who choose paperless banking, a few carbon offset initiatives for customers who purchase an electric vehicle and card-linked offers with rewards for behaviours that reduce carbon.

“Investing in ESG initiatives and raising awareness can benefit both banks and consumers. By promoting sustainable practices and financial incentives, banks can increase customer engagement and advocacy while also contributing to a more sustainable future.”

Researchers concluded by noting that banks have “most room for improvement” in the loyalty programmes they offer and in personalising interactions.