Once consumers select a financial institution, they’re likely to stay: Only 7% to 8% of consumers change their primary financial institution each year, according to research from MasterCard Worldwide.
But when consumers do switch providers, price, products, or proximity to their home or office aren’t the primary reasons. According to MasterCard’s “Relationship Banking Research,” service-related issues (45%) and life-changing events such as marriage or moving (39%) cause consumers to change financial services providers.
While financial institutions can’t control customers’ marital status, they can control service issues, says Christina Sommer, vice president in MasterCard Worldwide’s Global Insights group.
“Consumers understand that things go wrong from time to time,” Sommer says. “What they care about is how well a [financial institution] can recover from these mistakes. Consumers expect [financial institutions] to have knowledgeable employees who are empowered to address issues that arise.”
MasterCard’s research reveals that the branch and call center, as customer service centers, have the highest impact on retention, and that retention is becoming more a function of good problem resolution.