Affluent middle class consumers demand greater recognition and personalised experiences from retail banks

01 September 2015

In an increasingly competitive retail banking market, nearly two-thirds (64%) of global affluent middle class consumers expect greater recognition and reward for their loyalty according to research by the Collinson. This expectation is particularly high in Asia; at 82% in China, 75% in India and 66% in Singapore.  These consumers also expect more personalised communications and services, with 83% of UK consumers feeling their bank does not know or understand them and less than a third (27%) feeling they receive a high level of personal service.

The study of 4,400 affluent middle class consumers (within the top 10-15% income bracket), in Brazil, China, India, Italy, Singapore, the United Arab Emirates, the UK and USA, reveals the changing attitudes and expectations of this group towards banks.  It has found that over half of respondents are not satisfied with their banks and are considering or have already switched provider within the last two years and only half trust their bank to act in their best interest. 

Christopher Evans, Joint CEO, Collinson says,
"Whilst today the percentage of customers switching their current accounts is low, it is rising year on year. Increased competition, a growing range of comparison websites and switching services that are easier to use, are providing more choice and higher expectation amongst middle class mass affluent consumers. Knowing your customer and ensuring they feel valued are the key tenets of customer loyalty and banks need to act now if they are to retain their most affluent consumers."

Banks are losing their position as a 'one-stop shop' for financial services, with savvy consumers choosing a range of financial service providers.  Customers are increasingly looking elsewhere for additional services.  For example in the UK, the preference is to regularly compare the options for services such as insurance, find the best deal and then purchase direct. In contrast in the USA and Singapore  these services are sought via a credit card However when a customer does buy additional products through their bank, they are more loyal, with over half (54%) of customers globally less willing to switch provider. This highlights a dual benefit in offering more premium services such as insurance and assistance by increasing revenue as well as customer loyalty.

"Our research found that not being rewarded for loyalty is the biggest frustration for consumers, as cited by two thirds of respondents, ahead of poor interest rates and charging unnecessary fees. Many banks offer standardised, transactional loyalty programmes which rely on traditional points-based rewards. Less than half of affluent middle class consumers are currently members of bank loyalty initiatives and this group is more likely to be members of supermarket, airline, credit card and hotel loyalty programmes ahead of banks, where these programmes offer greater value and appeal.

Evans continues,  "With increased competition in the sector, encouraging the most valuable customers to become active members of loyalty programmes can be a powerful tool in improving satisfaction, retention and achieving repeat business."  

Personalised and consistent communications, rewards and service regardless of how customers choose to interact with a bank is also important for the affluent middle class.  The study has found that customer engagement improves by a third amongst individuals who 'feel known' by their bank and a further third for those who say they receive a consistent multichannel service - whether in person, by phone or by digital channels. 

Collinson research has highlighted how today's affluent consumers place a higher priority on family, altruism and enriching experiences ahead of short-term satisfaction and this is reflected in their expectations of banks.  Over two-thirds globally (68%) expect their banks to be ethical and this figure increases to 82% in the USA, 81% in China and 79% in India. 

"Banks need to act now to stop their customers switching and to protect their current revenue.  Middle class mass affluent consumers are increasingly mobile and demand more from their banks" says Evans. "Transparent, ethical behaviour is increasingly important and financial services organisations also need to demonstrate the value of their loyalty programmes to encourage active participation.  Personalised, aspirational and more lifestyle orientated benefits and rewards, which are more accessible to earn and redeem will enable banking brands to differentiate themselves and attract and retain the most affluent consumers."  

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