Retail banks are making less profit on average from customers since the financial crisis as price-sensitive consumers shop around and become more demanding, according to a report released today.
The study by consultancy Accenture found that nearly half of top global retail banks had seen the average profit from customers fall between 5 and 15 per cent. A further 11 per cent said they had seen bigger declines.
Of the 46 executives interviewed for the study, more than half said customer loyalty had decreased. Most expected the lack of customer loyalty to continue in the long term.
"Consumers (are) more sceptical of their bank brands, more price conscious, and more willing to move away from institutions that provide poor service," said co-author Noel Gordon, global managing director of Accenture's banking industry practice.
"For the banks, traditional profit-recovery strategies - rate and fee increases, conventional cross-selling and organic growth - will not readily fix the problem," he said.
Reuters