Banks’ marketers are failing to capitalise on financial product cross-selling opportunities with existing customers, new research from the Direct Marketing Association (DMA).
The report which polled 2,494 UK adults found that:
Consumers hold an average of just two financial services products with their main bank, with 65% holding a current account and 50%
On a satisfaction scale of one to ten, the top 14 retail banks score an average score of 7.8, with Virgin Money (8.67), Co-op (8.55) and First Direct (8.41) leading the pack
The two most popular products held by consumers with financial services providers other than their main bank, are home contents and building insurance
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According to the findings of the joint DMA / fast.MAP 2013 Financial services tracking study,, consumers hold an average of just two financial services products with their main bank, with 65% holding a current account and 50% holding a savings account. Recent research conducted by Deloitte found that three in five consumers use at least six financial services products.
The two most popular products held by consumers with financial services providers other than their main bank, are home contents and building insurance. One in four (39%) look to providers other than their bank for home contents insurance, and one in three (33%) shop elsewhere for their building insurance. Just one in 10 (9%) say they hold their mortgage with their main bank.
In spite of consumers giving the majority of their financial products custom to providers other than their main bank, they still rate the service they receive from their main bank highly. On a satisfaction scale of one to ten, the top 14 retail banks score an average score of 7.8, with Virgin Money (8.67), Co-op (8.55) and First Direct (8.41) leading the pack.
Ian Holmes-Lewis, a member of the DMA Financial Services Council and head of market for ReMark Group, one of the report’s contributors, commented:
“Consumers have complex relationships with their banks. They’re largely loyal in terms of their current and savings accounts, with only 12% considering switching to another provider. However, their loyalty to their main bank doesn’t always extend to purchasing other services.
“The fact that people hold just two products with their main bank shows that banks are missing out on crucial cross-selling opportunities. There is intense competition between the main high street banks, which provides a strong incentive to fight for greater market share. Banks need to focus on persuading their customers from shopping elsewhere.”
Speaking on for Affinion International – the leading global provider of customer loyalty and engagement products and sponsor of the DMA’s report – Giles Desforges, Senior Vice President for Northern Europe, said: “Consumers and their needs are changing and it’s crucial that banks evolve too. Banks need to put customers at the heart of product development and make sure they’re offering the right choice of products.
“The institutions that go beyond current or savings accounts and offer desirable products are the ones that will prosper. The DMA research clearly shows that consumers holding added-value products are most likely to recommend their bank to their friends and family, so it’s vital for banks that they’re offering products that customers want and need.”
The seventh DMA / fast.MAP Financial services tracking study, sponsored by Affinion International, can be downloaded from the DMA’s website.
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