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Nearly a quarter of consumers are likely to switch banks in the coming year
Calibre , a global data provider for stakeholder tracking , announced the release of its 2023 Financial Services Reputation Report . The report , which provides a global snapshot of how financial institutions are perceived , surveyed over 10,000 consumer respondents globally between January and May . This year ’ s report compares results to the company ’ s survey from 2021 .
Key highlights of the 2023 report include :
• Churn risk remains high , especially in the US : About a quarter of people worldwide ( 23 %) say they ’ re likely to switch banks in the next 12 months . In the UK , where over 1,600 respondents were surveyed , this decreases to just one in five people ( 22 %) – down by 11 % points from 2021 .
• Fees and social responsibility fuelling the desire to switch : Thirty-one percent of people worldwide say bank charges are too high . The risk of churn is driven mainly by these high fees and prices and the sense that banks do not always act in their customers ’ best interests .
• New entrants gaining reputational ground : Overall , people engage less with their financial services providers than two years ago , and they continue to view the FinTech sector as more trustworthy than the banking sector , but globally , the gap has narrowed since 2021 . In the UK , the gap narrowed from eight points to just two points between the most reputable bank and the most reputable FinTech company .
Feel the churn – the impact of declining customer support
Calibre ’ s report reveals that public support for the financial services sector has declined since 2021 :
• Only a third of people worldwide are likely to advocate for , recommend or choose to work for financial services companies – a slight decline from 2021 .
• Only 34 % of people are willing to buy products and services from the world ’ s largest banks , down from 37 % in 2021 .
• Fifty-five percent of people are familiar with the largest brands in the banking industry worldwide – down from 67 % in 2021 . In the UK , the top traditional banking institution is Lloyds Banking Group , based on Trust & Like score .
Trust & Like Score is at the core of a proprietary measurement system used by Calibre to show the strength of a company ’ s brand and reputation . The system combines several attributes related to brand , reputation , ESG and behaviour , as well as information on demographics , professional background and the touchpoints through which stakeholders interact with companies , summarised by a score on a 0 – 100 scale . Scores above 80 are considered ‘ Very High ’.
“ Taken together , these numbers ought to concern the financial services sector . People tend to stay with their bank for a long time – longer than many marriages , in fact . So , while traditional banks remain a safe harbour for customers in the current macroeconomic climate , they shouldn ’ t take that for granted ,” said Shahar Silbershatz , CEO and Cofounder , Calibre .
“ The data clearly shows that the FinTech sector is quickly growing in popularity , and customers are increasingly willing to explore alternatives to traditional financial services . Banks , insurance companies and other financial services providers around the world must heed this trend .” x
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