The financial crisis has severely damaged the relationship between banks and their retail and corporate clients, according to a survey released in late May by research company Vantedge Group.
The survey, which involved over 1200 European and US consumers and 54 large corporate banking customers, found that just 9% of consumer respondents were confident in their financial institutions.
Only 37% of European consumers said they were likely to stay with their current bank, and a mere 27% said they would recommend their bank to someone else. Another 43% said they would actually dissuade someone from becoming a customer.
Vantedge Group has also established a benchmark by which to measure the strength of the relationship between banks and their clients. The Banking Relationship Score for Europe was 27.7 out of 100 and in the US it was 55.3. Under 60 points denotes a client that is ‘at risk’ of defection, while a strong relationship score is considered to be 75 or over.
In the corporate world the survey found that relationships were stronger, but even then, just 46% of companies indicated they were likely to continue a relationship with their bank and just 41% said they would recommend their bank to a colleague. The survey showed that corporate clients valued trust above all else when it came to bank relationships. Companies also preferred to keep their relationships confined to a very small group of banks, according to the research.
The survey forecast more gloom to come, with only 14 percent of European consumers believing that things are likely to improve in next 12 months. "The severity of the downturn for financial institutions has clearly eroded key components of the banking relationship, while increasing the importance of emotional drivers like trust," said Read Ziegler, chief executive of Vantedge Group.
