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Mobile Banking and Customer Loyalty

January 26, 2022

Defining customer loyalty is an ongoing challenge in the ever-changing market for financial services. A wide variety of factors—including products, services, and channels—can impact customer loyalty. Aspects such as trust, customer service, frequency of interactions, and relationship longevity can also affect loyalty. Recent research from Phoenix Synergistics (a unit of Phoenix Marketing International) reveals that mobile banking is playing an increasingly important role as a factor in financial-institution customer loyalty. This is just one of the findings from Building Customer Loyalty, a Phoenix Synergistics study based on a nationwide survey of 2,000 consumers ages 18 and older.

Almost all (94%) consumers in the study identified a primary financial institution. When asked about their degree of loyalty to their primary financial institution, slightly more than one-third said they are “extremely loyal,” and another two-fifths consider themselves to be “loyal.” When those who are extremely loyal and those who are loyal were asked about the reasons for their loyalty, they indicated a variety of factors. Trust in the institution, excellent customer service, and never having had a problem with the institution top the list of reasons. These top-three factors are identical to findings in a 2017 Phoenix Synergistics study. The percentage indicating that mobile banking services are a reason for their loyalty increased from approximately one-fifth (22%) in 2017 to close to one-third (31%) in 2021.

Consumers are increasingly placing importance on mobile banking when first opening an account with a financial-services provider. In the study, consumers were asked which factors were most important in their decision to obtain their first account with their main financial institution. Among those who opened their first account six or more years ago, convenient branch locations were the factor mentioned most often. For those who opened their first account more recently (i.e., five or fewer years ago), mobile banking services top the list of important factors.

Bill McCracken, President of Phoenix MI’s Synergistics, stated, “Consumers are increasingly emphasizing mobile-banking services as a reason for loyalty and as an important consideration when making decisions about financial relationships. In some instances, mobile banking has overtaken more-traditional features, like branch locations, as an important factor. For providers of financial services, the impact of mobile banking on loyalty and account acquisition is more measurable when compared to intangibles like trust and excellent customer service. As the financial environment becomes increasingly digital-centric, financial-services providers need to place mobile banking at center stage.”

These are among the findings from a recent Phoenix Synergistics report, Building Customer Loyalty, which features responses from 2,000 online interviews with consumers ages 18 and older.

Phoenix Synergistics, a unit of Phoenix Marketing International, is the leading provider of multi-sponsor marketing research for the financial services industry. For more information, contact Bill McCracken, president, Phoenix Synergistics, email bill.mccracken@phoenixmi.com

For more information on this report, click here

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