Research reveals falling levels of customer loyalty in financial services companies

06 Jun 2018 With much written about the lack of loyalty younger adults show towards brands, new research  has revealed quite the opposite when it comes to sentiment towards financial services companies.

The findings from the Nottingham Building Society, which is celebrating a year of rewarding loyal members, reveal those aged 55 and over seeing the biggest fall in the level of loyalty felt towards financial services companies including banks, building societies and home and car insurers.

When it comes to Millennials (aged 25 – 34) a significant 35% actually feel more loyal than they did five years ago with just 12% feeling less loyal than in 2013.  The percentage of customers who now feel less loyal jumps to 24% for 45 – 54 year olds (13% feel more loyal) and 26% for those aged 55 and over (11% feel more loyal).

But a key reason for the drop in loyalty among people in older age groups is concern about the decline in access to face-to-face contact with their financial services companies through, for example, the closure of bank branches underlining the need for banks and building societies to reinvent how branches operate.  Nottingham’s research shows 82% of Millennials are loyal to banks compared with 65% of 45 -54 year olds and 62% of those aged 55-plus

Research among people who feel less loyal towards financial services companies show 60% say it’s because there is more information on the best available deals making it easier to spot when the products and services being offered to them are less competitive.

This is followed by 42% who say they feel less loyal because rewards programmes offered by financial services companies have declined. One in five (20%) blame it on less face-time with representatives from their financial services companies, and 10% say it’s because the quality of the call centre service they receive has deteriorated.

Nottingham Building Society believes branches have a positive role to play in the financial services sector but they need to be made more relevant to what customers want by providing a wider range of services.

David Marlow, CEO of The Nottingham Building Society said: “Customers now have much greater access to information on products and services which means financial services companies have to work harder to keep them happy.  Our research suggests that many people worry that service levels have actually fallen, and that is making them less loyal towards banks, building societies and insurers.

“Key to addressing the drop in loyalty is offering consistently competitive products and maintaining services, rewarding customer loyalty and providing high-levels of customer service – which for many people includes face-to-face advice.

“Our strategy is very much focused on reinventing branches so they offer more services that customers value while providing high levels of service which is reflected in The Nottingham receiving the lowest number of complaints.”

Over the past five years, The Nottingham has doubled its network of branches to 67 across 11 counties, and seen footfall increase by around 10%. It is also celebrating the first anniversary of its Member Rewards scheme launched in May 2017 to help support its loyal savings members in achieving their financial goals and planning for their future.

Qualifying members have access to a range of exclusive benefits including discounted estate agency fees, access to free impartial mortgage advice, financial planning and money back on home insurance and funeral plans. The programme has already shared £345,000 of rewards with 5,600 members in its first year and seen the number of eligible members grow by 11%, meaning the total up for grabs in 2018 is set to eclipse that.

The long-term commitment of the scheme is reflected in the Family Comes First element, where referred family members of rewards customers are immediately eligible for the benefits if they open a qualifying savings account, rather than having to wait a year for membership under the standard criteria.

To find out more about The Nottingham’s range of products and services, where its branches are based and its Member Reward scheme, visit https://www.thenottingham.com

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