LONDON, Feb. 28, 2011 /PRNewswire/ -- Despite efforts by manybanks to rebuild consumer confidence in the wake of the financialcrisis, trust in banks fell in the past 12 months in countries hithard by the downturn, according to a new survey report from Ernst &Young. By contrast, banks in some regions relatively unaffected bythe crisis are seeing trust levels rise.
For its new report, A New Era of Customer Expectation, Ernst &Young conducted a global survey of more than 20,500 global retailbanking customers in order to gauge what drives their relationshipswith their banks. The survey finds that 44% of customers worldwidesay their confidence in the banking industry has decreased in thepast 12 months.
Levels of confidence are even lower in regions deeply affected bythe financial crisis. In the US, 55% of customers now have lessconfidence in banks than they did a year ago. Within Europe, the UKhas seen the largest drop in consumer trust (63%). Alternatively, insome markets which entered the downturn in better condition,confidence in the banking sector has grown in the past year. Three-quarters of customers in India report their trust in banks roseduring 2010. In both Brazil and China, a majority of respondents saytheir confidence has grown or remained the same.
"In developed markets, customer confidence and trust in financialinstitutions has been severely damaged by the economic crisis, andour findings show that it remains under threat. Emerging
market economies have suffered less from the credit crisis andrecession and so their banks have seen trust endure," PierrePilorge, Ernst & Young's Financial Services Customer Leader
says. "In order to get back on track the survey clearlyillustrates that banks in developed nations must rebuild customerconfidence, enhance the customer experience and stem customerattrition."
Rebuilding customer confidence
Survey respondents cited several issues that continue to drivedown trust levels. Macro-economic factors (53%) have had the mostnegative impact on customer confidence. Brand strength, which hasbeen impacted by the confidence levels, is also cited as a keyfactor driving customer satisfaction worldwide. The image andreputation of an institution scored an average of 4.5 out of 6 whenrespondents were asked what is important for a successful bankingrelationship. A strong brand is particularly important in marketslike India, Latin America and South Africa. In all three markets,more than half of respondents say a strong brand is a keycharacteristic when they choose their main bank.
Preventing customer attrition
Attrition levels are highest in Europe with 39% having changedtheir main bank in the past. Service quality and price are theleading factors driving customers to switch their main bank, with48% of those planning to change banks because of service quality and43% citing price as the main reason. Other motivating factorsinclude product offerings, branch proximity and lack of trust. Ascustomers continue to demand higher quality service while levels ofprice sensitivity and distrust increase, banks must innovate toaddress customers concerns and remain competitive.
Enhancing the customer experience
Finding a way to effectively deliver a personal service tocustomers will be a key success factor in the years ahead. Whileinternet banking (83%), ATMs (79%) and branches (79%) are the touch-points customers are most satisfied with today, satisfaction withcall centers is consistently weaker (44%).
Banks need to reconnect with their customer base by improving thecustomer experience across their operations. A number of banks areexperimenting with new tools such as mobile banking but there isdemand across all channels - including call centers and branches -for greater personalization and attentiveness.
The new era
The banking industry in developed markets has witnessed asignificant shift in confidence, and never before have loyalty andpersonal customer attention been such critical issues. In contrast,the emerging markets now offer significant opportunities for bankslooking to expand internationally, as most have felt less of animpact from the credit crisis and instead have a growing middleclass of customers looking to diversify their bank relationships.
Pierre concludes: "Customers are demanding a more personalizedservice if they are to remain loyal. The successful institutions ofthe future will be those who offer customer-focused innovativeservices. Those that do will be able to differentiate theirorganization and drive for growth. The keys to success will be brandmanagement, personalized services and efficient pricing. Retailbanks that can deliver all three will prosper in a highly regulatedand constantly changing global financial services market."
About the survey
At the end of 2010, Ernst & Young conducted a global survey ofcustomer behavior in retail banking. We surveyed more than 20,500individuals in Belgium, France, Germany, Hungary, Italy,Netherlands, Poland, Scandinavia, Spain, UK, United States, Canada,China, India, Brazil, Mexico, Chile, Colombia, Argentina, Peru,Panama, Venezuela Japan and South Africa asking them about theirrelationships with their banks, and specifically about their levelsof satisfaction, what they are looking for from institutions, andtheir intentions and demands going forward.
About Ernst & Young
Ernst & Young is a global leader in assurance, tax, transactionand advisory services. Worldwide, our 141,000 people are united byour shared values and an unwavering commitment to quality. We make adifference by helping our people, our clients and our widercommunities achieve their potential.
Ernst & Young refers to the global organization of member firmsof Ernst & Young Global Limited, each of which is a separate legalentity. Ernst & Young Global Limited, a UK company limited byguarantee, does not provide services to clients. For moreinformation about our organization, please visit www.ey.com.
This news release has been issued by EYGM Limited, a member ofthe global Ernst & Young organization that also does not provide anyservices to clients.
SOURCE Ernst & Young
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