Ease of switching in fintech era jeopardizes loyalty to banks

Consumers remain satisfied with their primary financial institution, a new survey finds. However, this bond is increasingly fragile, with more consumers likely to switch providers in the next year, either by openly closing accounts or by "invisibly" shifting some of their business elsewhere.

The trend to more fragmentation of consumers’ banking relationships continues, creating a much more complex environment than used to be the case. A Phoenix Synergistics survey exploring loyalty trends in banking revealed that even satisfied customers who are happy to recommend their primary banking provider also have relationships with an average of 3.3 financial institutions. Others won’t hesitate to move their assets should they find better service or a better offer.

What makes this trend even more complex is that in many cases, people aren’t closing out their primary accounts, but are moving funds to Robinhood, Affirm, Chime or elsewhere — an “invisible migration.”

Despite this, the news regarding customer loyalty in many respects continues to be good. Whether this could create a false sense of security is an open question. Here are some of the key findings from the Phoenix Synergistics research, beginning with the positive.

 

continue reading »

More News