Customers take advantage of competitive environment to shop around for credit and investment products; Millennials represent best growth opportunity
A comprehensive survey of U.S. bank customers conducted for FICO found that banks are under-leveraging their loyal customer bases, missing out on opportunities to increase top-line growth by cross-selling additional services. Consumers today use 6.05 banking services on average, but use only 3.37 of these services from their primary bank (where they keep their checking account). Only 30 percent of consumers surveyed have relationships with their primary bank that extend beyond checking, debit and savings.
Some 78 percent of consumers surveyed say they are satisfied with their primary bank, and half have done business with their primary bank for more than a decade. Still, consumers are going outside their primary bank for nearly half of their banking services. While just 5 percent of consumers use a secondary bank for checking and savings, 42 percent use a secondary bank for a credit card, 24 percent for a mortgage, 24 percent for an auto loan, and 27 percent for an IRA.
Overall, Millennials (ages 25 to 34) use the fewest banking services (5.78), although 60 percent of those services are with their primary bank. Two out of three Millennials use a large national bank for their primary banking services. Members of Generation X (ages 35 to 49) have the most banking services (6.27), with 55 percent of those services coming from their primary bank.
The survey found many opportunities for banks to grow top-line revenue either through new customer acquisition with a focus on Millennials, or by extending the number of services used by their existing customers. In the next year, 13 percent of respondents plan to open a new account with their primary bank, and 12 percent with a secondary bank. Millennials are also 95 percent more likely to open a new account with their primary bank than the average consumer, are twice as likely to open a new account with a secondary bank in the next 12 months, and are evaluating the largest variety of products and services.
The online survey of 991 U.S. banking customers was conducted in March 2014.