Banks losing out on ‘customer churn’
Competition between high street banks is on the rise with more people swapping banks, according to research from Pitney Bowes.
This costs the industry over £730 million in profits annually. Customer defection rates within the retail banking sector have risen to 18.3% in 2007, an increase of 5% since the last report was published in 2005.
The study also revealed that Britain is the customer defection capital of the West with 22% churn a year, possibly because of its crowded geography, its national wealth per capita, and its high levels of deregulation across all sectors studied.
The industries experiencing the highest levels of growth in customer defection rates since 2005 are supermarket and general insurance providers, with both seeing a 7.6% point increase in churn rates.
Mobile Telecoms has the highest average customer churn at 38.6% (33.4% in 2005).
Andrew Greenyer, VP International Marketing, Pitney Bowes Group 1 Software commented: “The world is becoming generally more mobile and less loyal. Banking, it seems, can no longer rely on customer inertia. Traditionally, churn levels have been in the sub-10% range, but have now rocketed to virtually the same level as the mobile phone industry on average across Europe.”