09:17, 4 November 2020 302 views
NAFI: Russians’ loyalty to banks withers over five consecutive years
NAFI, a research and analysis centre, carried out a large-scale measurement of the level of bank clients’ loyalty in all Russian regions to find out that the indicator had reached its minimum over the past 5 years. It decreased from 43 to 1.3 points (a drop by 3.7 points over the last 10 months alone).
The level of loyalty is based on the Net Promoter Score (NPS), which is calculated through conditional dividing customers into three following groups: “promoters”, “passives” and “detractors”, depending on whether they are ready to recommend the bank to their friends and acquaintances. The NPS metric is calculated for the main bank determined by the respondents themselves if they are clients of several banks at once.
As of September 2020, the index of loyalty to the main bank shows the lowest figures in the last 5 years – 1.3 points. Slightly more than a third of bank customers (36.7%) are highly likely to recommend their bank to relatives and friends (57% in 2016, 39% in early 2020).
The list of customer loyalty leaders is available in the NAFI brochure “NPS-2020: Loyalty of Retail Banking Customers”.
The drop in the level of loyalty until recently was driven by the transition of clients from “passives” to “detractors”, while in 2020 the drop in the share of “promoters” is especially noticeable. That is, not only the share of customers neutral to their bank is decreasing, but also the share of those who were previously ready to recommend their bank to others.
The greatest contribution to customer loyalty today is made by product features (primarily price) and quality of service – fast service and a sense of the bank's care for the customer are appreciated. In recent years, the bank's brand has made a much smaller contribution to loyalty.
Bank depositors and debit card holders show the highest level of loyalty, while the level is especially low among users of targeted consumer loans and mortgage clients.
The level of loyalty to the main bank differs by social and demographic groups. The most loyal bank clients in Russia are women, young Russians (up to 24 y.o.), as well as top and middle-rank managers. On the contrary, the least loyal to banks are men, middle-aged Russians (35-44 y.o.), and the unemployed.
In terms of place of residence, the highest loyalty indicators are registered in the Central Federal District, and the lowest in the North-West. The Ural, Southern and Volga Federal Districts are also located in the positive loyalty zone. At the same time, the largest number of disloyal customers is registered in large cities of 0.5-1 million people.
Timur Aimaletdinov, NAFI Deputy General Director:
“Both banks and consumers of banking services are changing today. In the minds of customers, banks are increasingly becoming depersonalized services, most often IT services and applications. And any service must be fast and understandable today – these are the requirements of Russians to financial institutions. Besides, the modern world is a world striving for diversity and short-term relationships between consumers and service providers. Maintaining loyalty in such conditions is much more difficult than five to ten years ago.
Consumers of banking services are also changing. They are getting more literate and experienced, more often they compare the terms and quality of service in different organizations. In the context of growing confidence in the banking system as a whole, this switch is getting simpler day by day. Therefore, retaining loyalty today is a matter of very accurate understanding of the changing needs and expectations of customers.”