Net Promoter Score® is a trademark of Bain & Company, Inc., Fred Reichheld and Satmetrix Systems, Inc.
Copyright © 2015 Bain & Company, Inc. All rights reserved.
Acknowledgments
This report was prepared by Gerard du Toit and Maureen Burns, partners in Bain’s Financial Services practice,
and a team led by Christy de Gooyer, a practice area director. Team members are Rahul Agarwal, Lakshya Agrawal,
Tarun Gupta, Vidhi Lohia and Pranav Singh. The authors thank Bain partners in each of the countries covered
in the report for their valuable input and John Campbell for his editorial support.
Key contacts in Bain’s Global Financial Services practice
Global: Edmund Lin in Singapore ([email protected])
Americas: Mike Baxter in New York ([email protected]) Maureen Burns in Boston ([email protected]) Gerard du Toit in Boston ([email protected])
Asia-Pacifi c: Peter Stumbles in Sydney ([email protected])
Europe, Middle Henrik Naujoks in Düsseldorf ([email protected])East and Africa:
Customer behavior and loyalty in retail banking | Bain & Company, Inc.
Page i
Contents
Mobile fi rst . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . pg. 3
1. The rapid rise of mobile . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . pg. 9
2. Creating customer delight through mobile . . . . . . . . . . . . . . . . . . . . . . . . pg. 15
3. On the horizon, mobilizing sales . . . . . . . . . . . . . . . . . . . . . . . . . . . . . pg. 23
4. The branch will change or die . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . pg. 29
5. Movement on the loyalty leader boards . . . . . . . . . . . . . . . . . . . . . . . . pg. 35
Customers who use branches frequently are almost 3x more likely to switch banks
3X3X A branch visit in the US is 2.3x more likely to annoy than a mobile interaction
For every 100 mobile interactions, on average, there’s a decline of 16 interactions at the branch
Source: Bain & Company
The US still has almost 4x more routine branch interactions than the Netherlands
4X
More than half*of global consumers would miss their mobile phone more than their wallet
*And almost 80% in China and South Korea!
26% of customers already use mobile to research or purchase bank products—and even more so in Asia
2626%
Apps for routine transactions are one-third more likely to delight US customers than routine transactions in the branch
Frequent mobile users in the US are 40% less likely to switch banks
MOBILE RULESMOBILE RULES
TODAY’S BRANCH IS OBSOLETE
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Page 3
Mobile fi rst
A global race is on to “mobilize” banking. Banks around the world have been working furiously to improve their
mobile applications and optimize their websites for customers’ smartphones and tablets. Yet the race has just
begun. Leading banks are still learning how to take a mobile-fi rst approach to reimagine customer experiences
in everything from buying a home to resolving an incident of fraud.
By migrating customers to digital channels, banks have begun to reap signifi cant cost savings as they drive bad
and avoidable interactions (generated by errors or better routed to lower-cost and more convenient digital channels)
out of the branch and call center. And the benefi ts extend well beyond cost. Mobile channels are far more likely
to delight and less likely to annoy than the branch or call center experiences, leading to increased loyalty with
higher customer retention, repeat purchases and referrals.
This shift entails new roles for the branch and frontline employees. Complex sales and service activities, for instance,
now usually start with the customer turning fi rst to digital, often mobile, channels. Customers increasingly expect to fol-
low up with bank staff through digital chat, video or other real-time options rather than having to visit a branch or sepa-
rately call a contact center. As a result, most branches no longer need their own product specialists, because pooled spe-
cialists can deliver better service with higher productivity. So not only is the branch’s role in routine transactions rapidly
diminishing, the future confi guration of sales and service in the branch network is not so clear.
Consumers continue to lead the mobile charge in most markets, spurred by the ease and convenience of mobile
through leaders in other categories, from Alibaba to Uber. As a quick indicator, consider that when Bain & Company’s
2015 global survey asked 114,696 consumers which they’d miss more for a day, their mobile phone or physical
wallet, more than half chose their phone, with the share reaching 79% in China. Mobile clearly has advanced
past the tipping point.
But the pace of progress in encouraging customers to migrate from branches to digital channels varies dramati-
cally from country to country and from bank to bank within countries. The Netherlands and South Korea may
provide a view of the future as they have the highest mobile adoption of countries surveyed, both in total and
for sales and service; Dutch respondents’ mobile usage has risen fourfold in two years while the branch plays a
minor role. Similarly, the inroads made by digital insurgent companies vary around the globe, with China demon-
strating the most comprehensive examples so far. So banks can learn from the global leaders that have advanced fur-
thest down the experience curve, not just from their competitors next door.
As more banking activities go mobile, a major challenge for bankers has been to identify the right priorities and
sequence of moves—right both for earning greater customer loyalty and for funding investments in digital channels
through cost reductions in the branch network. Bain’s latest consumer research and statistical analysis, summa-
rized below, points the way to the right priorities by shedding light on the relationship between specifi c channel
experiences and customer loyalty.
The new hub of personal fi nance
Our analysis shows that for the average bank, a high priority is to migrate routine activities out of the branch,
where they are more likely to annoy customers, into self-service digital channels, including mobile. That means improv-
Customer behavior and loyalty in retail banking | Bain & Company, Inc.
Page 4
ing the mobile experience to the extent that it truly delights customers, making the experience fast, intuitive, con-
venient, and capable of handling the most common transactions and service requests. Moreover, given scarce resources,
it’s more valuable to focus on improving a mobile app than a website because, on average, customers use apps almost
twice as often as mobile web browsing for routine interactions, and apps are consistently more likely to delight.
Indeed, mobile has evolved from a separate channel to become the hub of personal fi nance. To succeed in banking,
therefore, demands new capabilities of bank organizations:
• Extraordinary design discipline, given the small screen, slow speed of accurate typing and impatience of users
(many will give up if a screen load takes more than a few seconds)
• Radical simplifi cation of products, processes and communications
• Personalization, powered by good data and analytics, so that only relevant information is displayed to the user
• Contact methods that allow for anytime, anywhere chat and video calls with fast authentication
• Much faster development cycles to keep up with the pace of new functionality and rising expectations
of consumers
• A new operating model that provides organizational agility, based on a commitment to breaking down barriers
that divide internal departments and a willingness to collaborate with third-party developers
Both the quality of the channel experience and the mix of channel volumes matter when creating a great experience
for customers. Among US banks, 70% of the difference in channel experience scores (defi ned as the channel’s
likelihood to delight minus its likelihood to annoy) between the average regional bank and top performer USAA
is due to quality of the experience as rated by consumers; the mix of channels accounts for the other 30%.
These factors also have a strong infl uence on a bank’s Net Promoter ScoreSM, Bain’s key metric for customer loyalty.
Our statistical analysis shows that the most signifi cant factors for a bank’s Net Promoter Score are annoyance
with the branch experience, the branch’s share of interactions, and delight in the mobile and online experiences.
Investing in mobile, in part to reduce branch transactions, clearly pays off in greater loyalty. Apps used for routine
transactions, for instance, are one-third more likely to delight US customers than similar transactions at the branch
and only half as likely to annoy (see Figure 1). Mobile beats phone and ATM channels as well; in fact, phone inter-
actions are most likely, on average, to cause annoyance.
The mobile payoff also shows up in consumers’ propensity to switch banks. In the US, customers who use a
bank’s mobile channel frequently are 40% less likely to switch to another bank as customers who use mobile
rarely. Conversely, customers who use branches frequently are almost three times more likely to switch banks
as customers who rarely use branches.
Reimagining the branch
Banks cannot rely exclusively on mobile, of course. Human interactions still offer a means to excel in customers’
eyes, and those customers who use both physical and digital channels still tend to be more loyal and more valuable
Customer behavior and loyalty in retail banking | Bain & Company, Inc.
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0
4
8
12%24 28 32%
Online routine Mobileapp routine
Sixinteractions
in last quarter
ATM
Onlinesales/service
Mobilesales/service
Branchsales/service
Phone
Chat/video
Increasing likelihood to delight
Reliable
Percentage of US respondents, 2015
Dec
reas
ing
likel
ihoo
d to
ann
oy
Annoying
Delightful
Variable
Notes: Responses on a scale from -5 to 5 for “to what extent did the interaction increase or decrease your likelihood to recommend your bank?”; likelihood to delight=percentage of respondents answering ≥4; likelihood to annoy=percentage of respondents answering ≤-1Source: Bain/Research Now US NPS survey, 2015
Branchroutine
Mobilebrowserroutine
Figure 1: Mobile is consistently more likely to delight than other channels
to their primary bank. Interactions with bank staff, a bank’s product value proposition (including rates and
fees), and the emotional connection (or lack thereof) to the brand all play important roles in loyalty. However, the
role of the branch and frontline staff is changing rapidly. Our consumer surveys and evidence from leading
bank initiatives all show that routine interactions work better and cost less when done digitally, without requir-
ing a customer to visit a branch or call a contact center. Many banks have started down this path. In Germany,
for example, banks have cut routine interactions at the branch by half over the past two years by migrating
those interactions online and to ATMs.
Employees still play essential roles in more complex sales, service and advice, but the way they interact with
customers is changing as well. They’re increasingly communicating not in a branch but via chat or video. Dutch
bank ABN Amro, for instance, has been advising on and processing mortgages via webcam so that customers don’t
have to physically hand over documents at a branch. As banks plug their frontline staff into the mobile hub, they
can raise sales and service productivity by reaching more customers and reducing paperwork.
The writing is on the wall: Customers increasingly view having to use branches and call centers as an incon-
venience for many transactions. We estimate that 50% to 70% of call volumes at a typical bank are bad or avoid-
able. So although omnichannel customers still give higher loyalty scores than digital-only or branch-only customers,
the branch as currently confi gured will not survive. At all cost, banks should avoid policies (such as ceilings on
remote deposits) that force customers to go to a branch and stand in line.
Customer behavior and loyalty in retail banking | Bain & Company, Inc.
Page 6
Some banks, including mBank in Poland, Hana Bank in South Korea and NatWest in the UK, have made excep-
tional progress in mobile and point the way for others. Since launching its app in 2011, mBank has kept innovating
the mobile experience. For example, users can access basic fi nancial information without needing to log in,
obtain one-click loans with 30-second approval and disbursement, and make peer-to-peer money transfers using
their smartphone’s contact list. These banks have discovered that mobile adoption in conjunction with advanced
ATM functionality that can eliminate cash handling from branches offer the best opportunity in decades for
cost take-outs.
Once banks have established solid apps for routine transactions, the next big mobile opportunity is to improve
product sales capabilities. Already, 26% of respondents globally use mobile channels to research or purchase
banking products, and that behavior is even more pronounced in Asia. In China and India, 52% and 43% of respon-
dents, respectively, do their product research through mobile. In China and the UK, 20% and 18%, respectively,
actually buy through mobile. Banks that lead in mobile purchases as a share of all purchases include Barclays in
the UK, China Minsheng Bank, and Commonwealth Bank of Australia (CBA).
Consumer pull, bank push
The pace of mobile innovation varies substantially around the world. In some countries, such as South Korea
and China, consumer enthusiasm for mobile has led to stunningly rapid adoption; roughly half of all bank inter-
actions in South Korea happen through mobile devices. Elsewhere, such as in Japan and Germany, consumer
adoption of mobile commerce has been much slower, and banks have been slow to push the pace of change. This
raises a classic chicken-and-egg question: Does consumer pull or bank push infl uence mobile adoption?
Evidence suggests that banks have a signifi cant ability to push consumers along, and the differences in mobile
adoption depend on how aggressively banks compete with each other on mobile innovation rather than on the
structure of their markets.
Consider the different trajectories of Australia and Canada, which have similar market structures, income distri-
butions, smartphone adoption and regulatory regimes. Australia has roughly 50% greater mobile banking usage
and two-thirds the branch usage as Canada. The explanation for this disparity lies in early moves by CBA to pursue
mobile innovations and thereby distinguish itself with customers. That prompted other big banks in Australia
to invest in mobile in order to maintain their share. By contrast, no big bank in Canada made an early bid to out-
invest in mobile, and innovation and customer adoption have lagged, leaving banks there to play global catch-up.
And catch up they must. In product after product, consumers have proven more willing than suppliers anticipated
to transact via mobile or online. Just as the share of customers who would pursue online fl ight check-in soared
past the airlines’ notional maximum, the adoption rate of mobile banking will signifi cantly exceed what many
banks are planning for today. And if one bank won’t make it easy enough to do so, another one will.
China leads the disruption
With customers’ expectations for the mobile experience rising, bankers will be forced to measure their offerings
against competitors around the world, not just within their home country. The biggest threat comes not from
banks but from insurgent companies devising better ways to deliver banking services through mobile. Much of
the industry’s attention has focused on companies based in Silicon Valley, including LendingTree, Betterment
Customer behavior and loyalty in retail banking | Bain & Company, Inc.
Page 7
and Apple Pay. Yet these Western insurgents have not yet managed to achieve large scale or the coveted network
effect in their banking and payments offerings. Chinese insurgents such as Alipay and WeChat, meanwhile, have
leapfrogged the West and offer a compelling example of what Silicon Valley has been threatening to do at scale.
In China, for instance, some 600 million users active on Tencent Holdings’ WeChat messaging app can pay
merchants and utilities, send money to friends, deposit investments into money market accounts, book travel
tickets, borrow money, and carry out other daily fi nancial transactions with just a touch or two. WeChat shows
how payments, commerce and social media can converge. More than half of users open the app at least 10
times a day, and purchase volume to date has been 11 billion yuan ($1.7 billion) through WeChat Wallet. On the
most recent Chinese Lunar New Year’s Eve, WeChat users sent 1 billion virtual red envelopes, inspired by the
Chinese holiday tradition of gifting cash-stuffed red envelopes— hongbao in Chinese — to friends and family
(see Figure 2).
The scariest part for bankers: While WeChat’s wallet functionality currently operates only in mainland China,
WeChat now has more than 100 million users abroad. Other messaging platforms such as WhatsApp, which
has 900 million active users and was acquired in 2014 by Facebook, also aspire to add similar broad wallet func-
tionality, further pressuring banks.
The chapters that follow explore the 2015 survey data on the rise of mobile usage and its propensity to delight
or annoy, the next horizon in mobile sales, customers’ channel behavior, and global loyalty trends. The data and
insights can help banks accelerate their transition to a leaner, more balanced model in which each channel is
designed for both effi ciency and delight—and to mount a strong response to the digital insurgents.
600 million monthly users, 55% of whom open the app at least 10 times a day
QuickPay: QR-based point-of-sale system accepted by most merchants and any WeChat user with a camera on their device
Wealth: Transfer funds to a money market currently yielding 3.5%
Specials from China’s second-largest online shopping platform, JD.com
Public transport: Buy tickets
Go Dutch: Split a bill with friends
Mobile top-up: Send money to any prepaid mobile device
Fashion shopping online
Pay credit card bills
Local merchant offers with Groupon-like discounts
Red Envelope: On Chinese New Year, users sent 1 billion virtual red envelopes with cash gifts to family and friends
Weilidai allows users to borrow up to 200,000 yuan ($31,000) in minutes
Source: Bain & Company analysis
Transfer: Send money to anyone on WeChat
Didi Dache: China’s Uber-like taxi and limo ordering app
Movie tickets, utility payments, order and pay for a taxi, online shopping
Figure 2: WeChat integrates banking with social media
• Customers of all stripes rely heavily on their smart-phones in daily life, with younger customers being the most dependent on mobility. Customers in most countries and age groups continue to use mobile devices more frequently for their banking trans-actions and online computer channels less. In fact, mobile interactions now exceed online interac-tions in 10 of 16 countries measured. The biggest mobile/online shifts since 2013 occurred in the Netherlands, South Korea and China.
• Customers have increased the volume of their mobile interactions as well, with the largest increase coming in the Netherlands.
• Most banks are responding to their customers’ demand for mobile access through apps as well as websites with responsive design. While app usage is more common than the browser every-where, usage frequency does vary. Consumers in the Netherlands and South Korea show the highest usage while Japan and Germany lag.
• Higher mobile usage generally correlates with less branch usage. But it’s not a one-to-one relation-ship. Although routine interactions through mobile channels have increased dramatically over the past two years, routine branch interactions declined much more slowly as it takes time and effort to change customer habits. For every 100 mobile inter-actions, on average, there’s a decline of only about 16 interactions at the branch. Australia, the Nether-lands and South Korea could point the way for banks elsewhere in teaching customers to use mobile and other self-service channels such as advanced ATMs.
• Within any country, there’s signifi cant dispersion among individual banks in their mobile/branch usage ratio. Moving bad and avoidable volumes out of the branch doesn’t simply happen once an app launches; banks need to teach custom-ers to take advantage of the app’s benefits at every opportunity.
1.The rapid rise of mobile
Customer behavior and loyalty in retail banking | Bain & Company, Inc.
Page 10
10
15
20
25
30
35
40
45
50
55%
10 15 20 25 30 35 40 45 50 55%
Mobile interactions as a percentage of total interactions, 2013 and 2015
South Korea NetherlandsMobile exceeds online
Online exceeds mobileUS
AustraliaChina
Singapore
HongKong
Mexico
India
UK
France
CanadaPoland
Germany
Spain
Online interactions as a percentage of total interactions
Japan
Sources: Bain/Research Now NPS surveys, 2013 and 2015; Bain/GMI NPS surveys, 2013
2013 2015
0
20
40
60
80
100%
Chi
na
Sout
h Ko
rea
Indi
a
Hon
g Ko
ng
Braz
il
Pola
nd
Fran
ce
Mex
ico
Spai
n
US
Sing
apor
e
Net
herla
nds
UK
Aus
tralia
Ger
man
y
Can
ada
Japa
n
Percentage of people who would miss their phone more than their wallet, 2015
AverageUnder age 25
Age 55 or more
Source: Bain/Research Now NPS surveys, 2015
Figure 4: Mobile is displacing online in banking
Figure 3: Most consumers in most countries would miss their phone more than their wallet
Customer behavior and loyalty in retail banking | Bain & Company, Inc.
Page 11
0
5
10
15
20 20
17
1514 14 14
12 12 1211
10 10 9 9 9
6
2
Average number of routine interactions per respondent in last quarter, 2015
Net
herla
nds
Sout
h Ko
rea
Fran
ce
Aus
tralia US
UK
Chi
na
Spai
n
Pola
nd
Indi
a
Sing
apor
e
Braz
il
Mex
ico
Hon
g Ko
ng
Can
ada
Ger
man
y
Japa
n
Smartphone app Tablet app Mobile browser
Source: Bain/Research Now NPS surveys, 2015
0
5
10
15
20
25
Netherlands
South Korea
Canada
Japan
2012 2013 2014 2015
Mobile interactions per respondent in last quarter, 2012–2015
Global weighted averageChinaUS
Note: Data not available for Netherlands and South Korea for 2014, thus chart interpolates between 2013 and 2015.Sources: Bain/Research Now NPS surveys, 2012–2015; Bain/GMI NPS surveys, 2012 and 2013; Euromonitor
Figure 6: Consumers use apps more than mobile browsers
Figure 5: Mobile usage continues its rapid rise in most countries
Customer behavior and loyalty in retail banking | Bain & Company, Inc.
Page 12
0
10
20
30
0 1 2 3 4 5
Canada
Australia
Average number of mobile interactions per respondent in last quarter, 2015
Average number of branch interactions per respondent in last quarter, 2015
Dutch Bank French Bank Australian Bank Canadian Bank
Polish Bank British Bank Spanish Bank US Bank
Source: Bain/Research Now NPS surveys, 2015
0
5
10
15
20
0 1 2 3 4 5
AustraliaUK
SpainUS
Average number of routine branch interactions per respondent in last quarter, 2013 and 2015
Average number of routine mobile interactions per respondent in last quarter, 2013 and 2015
India
Netherlands
Mexico
South Korea
China
CanadaSingapore
Hong Kong
Japan
2013 2015
Sources: Bain/Research Now NPS surveys, 2013 and 2015; Bain/GMI NPS surveys, 2013
Figure 8: Mobile and branch usage varies substantially, even among countries with similar market structures
Figure 7: Mobilizing routine interactions allows banks to reduce routine branch visits
Customer behavior and loyalty in retail banking | Bain & Company, Inc.
Page 13
0
10
20
30
0 1 2 3 4 5
Netherlands
FranceAustralia
Poland
UK
Canada
SpainUS
Average number of mobile interactions per respondent in last quarter, 2015
Average number of branch interactions per respondent in last quarter, 2015
Source: Bain/Research Now NPS surveys, 2015
US bank Country average
Figure 9: Branch and mobile usage also varies substantially among banks within countries
• Experiences that are easy, reliable and effi cient create stronger loyalty. Mobile apps, especially for routine transactions, are more likely to delight customers than branch or phone experiences. An app is one-third more likely to delight a US customer than a branch visit for a routine inter-action. Conversely, a routine branch visit is 2.4 times more likely to annoy than a routine mobile app interaction.
• The pattern is similar in the Netherlands and South Korea, where mobile usage is highest. In South Korea, the functionality of advanced ATMs also performs well.
• Mobile gets high experience scores (defi ned as the percentage of recent interactions that delighted minus the percentage that annoyed) in most coun-tries, and its lead over other channels is most pro-nounced in the US. ATMs also score favorably in India, Mexico and Brazil, where broad ATM roll-outs have reduced the need to visit a branch and wait in line.
• Within a country, some banks excel far more than others in using mobile to delight. Those leaders and top mobile performers in other industries raise the bar for all banks.
• In the US market, for instance, Chase has steadily progressed in loyalty rankings relative to regional banks, in part by developing a distinctive mobile experience. This creates a challenge for regional banks that struggle to match the investment required to lead in mobile. But the biggest winner in creating distinctive experiences is direct bank USAA.
• The quality of all channel experiences accounts for roughly 70% of the difference in experience scores between USAA and regional banks, with the mix of channels accounting for the other 30%.
2.Creating customer delight through mobile
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Page 16
0
5
10
15%9 12 15%
Phone
Chat/video
Six
interactionsin last quarter
Branchroutine Branch
sales/service
Onlinesales/service
Reliable
Annoying
Delightful
Variable
Mobileapp routineOnline routine
ATM
Mobilesales/service
Increasing likelihood to delight
Dec
reas
ing
likel
ihoo
d to
ann
oy
Percentage of Netherlands respondents, 2015
Notes: Responses on a scale from -5 to 5 for “to what extent did the interaction increase or decrease your likelihood to recommend your bank?”; likelihood to delight=percentage of respondents answering ≥4; likelihood to annoy=percentage of respondents answering ≤-1Source: Bain/Research Now Netherlands NPS survey, 2015
Mobilebrowserroutine
0
4
8
12%24 28 32%
Online routine Mobileapp routine
Sixinteractions
in last quarter
ATM
Onlinesales/service
Mobilesales/service
Branchsales/service
Phone
Chat/video
Increasing likelihood to delight
Reliable
Percentage of US respondents, 2015
Dec
reas
ing
likel
ihoo
d to
ann
oy
Annoying
Delightful
Variable
Notes: Responses on a scale from -5 to 5 for “to what extent did the interaction increase or decrease your likelihood to recommend your bank?”; likelihood to delight=percentage of respondents answering ≥4; likelihood to annoy=percentage of respondents answering ≤-1Source: Bain/Research Now US NPS survey, 2015
Mobilebrowserroutine
Branchroutine
Figure 11 : In the Netherlands, mobile apps are more likely to delight for routine interactions
Figure 10: In the US, mobile is consistently more likely to delight than other channels
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0
5
10
15
20%10 15 20 25%
ATM
Branchroutine
Mobilesales/service
Onlinesales/service
Branchsales/service
Phone
Chat/video
Sixinteractions
in last quarter
Mobileapp routineOnline
routine
Increasing likelihood to delight
Reliable
Percentage of South Korea respondents, 2015
Dec
reas
ing
likel
ihoo
d to
ann
oy
Annoying
Delightful
Variable
Notes: Responses on a scale from -5 to 5 for “to what extent did the interaction increase or decrease your likelihood to recommend your bank?”; likelihood to delight=percentage of respondents answering ≥4; likelihood to annoy=percentage of respondents answering ≤-1Source: Bain/Research Now South Korea NPS survey, 2015
Mobilebrowserroutine
Figure 12: In South Korea, mobile is consistently more likely to delight than other channels
Customer behavior and loyalty in retail banking | Bain & Company, Inc.
Page 18
Figure 13: Digital outperforms the branch and phone in every country surveyed
UK
Spain
Poland
Netherlands
Germany
France
South Korea
Singapore
Japan
India
Hong Kong
China
Australia
US
Mexico
Canada
Brazil
Channel experience score relative to leading channel, which is indexed to zero, 2015
0% –5 –10–10 –15 –20 –25 –30
Americas
Asia-Pacific
Europe
Mobile Online ATM Branch Phone
Note: Channel experience score is defined as the likelihood to delight minus the likelihood to annoySource: Bain/Research Now NPS surveys, 2015
Customer behavior and loyalty in retail banking | Bain & Company, Inc.
Page 19
Figure 14: The preference for mobile broadly applies across age groups
China
UK
US
55–64
18–24
65+
45–54
35–44
55–64
45–54
35–44
25–34
18–24
65+
55–64
45–54
35–44
18–24
25–34
0% –5 –10–10 –15 –20 –25 –30
Source: Bain/Research Now NPS surveys, 2015
25–34
Channel experience score relative to leading channel, which is indexed to zero, 2015
Mobile Online ATM Branch Phone
Customer behavior and loyalty in retail banking | Bain & Company, Inc.
Page 20
0
4
8
12%0 28 32 36 40 44%
MobileMobile
Online
Online
Online
Percentage of US respondents, 2015
Mobile
Branch
BranchBranch
15interactions
in last quarter
Dec
reas
ing
likel
ihoo
d to
ann
oy
Increasing likelihood to delight
Reliable
Annoying
Delightful
Variable
USAA Chase Average regional bank
Source: Bain/Research Now US NPS survey, 2015
Lowest bankAverage
Highest traditional bankHighest direct bank
Canada
US
Australia
China
South Korea
France
Germany
Netherlands
UK
–40 –30 –20 –10 0%
Euro
peA
sia-
Paci
ficA
mer
icas
Channel experience score for mobile, 2015, relative to highest bank, which is indexed to zero
Source: Bain/Research Now NPS surveys, 2015
Figure 16: In the US, Chase differentiates on mobile while USAA leads across all channels
Figure 15: The quality of the mobile experience varies greatly within countries
Customer behavior and loyalty in retail banking | Bain & Company, Inc.
Page 21
Factor Statistically significant Contribution to NPS
Branch
Likelihood to annoy
Share of interactions
Online
Likelihood to annoy
Likelihood to delight
Likelihood to delight
Likelihood to delight
Share of interactions
Mobile
Likelihood to annoy
Share of interactions
Results of regression between US bank Net Promoter Score and various factors, 2015
Source: Bain/Research Now US NPS survey, 2015
28% 31% 77%
0
20
40
60
80
100%
NPS
Percentage of total interactions in last quarter, US, 2015
Averageregional bank
Chase USAA
Mobile/tablet
Online
ATMBranchPhone
0
10
20
30
40%
20.31.8 1.1 23.2
3.0
9.8 36.0
Bank average channel experience score, US, 2015
Averageregional
bank
Channelmix
Channelmix
Channelquality
Channelquality
Chase USAA
Source: Bain/Research Now US NPS survey, 2015
Figure 18: Increasing delight in digital channels and reducing annoyance caused by the branch raise loyalty scores
Figure 17: Both the quality and the mix of channels infl uence a bank’s channel experience score
• Mobile took off by making routine interactions easy to carry out anywhere, anytime. Now it’s coming on strong in sales and service. Almost one-third of sales or service interactions occurred via mobile in the past quarter, with the greatest share in the Netherlands and South Korea.
• Some 59% of buyers used both digital and tradi-tional channels for their research and purchase. The share of digital-only research and purchase was signifi cant at 28%, with the highest shares in the UK and the Netherlands.
• For research alone, online is the most common method, but mobile has risen as well—especially for simpler products and notably in China, India, Hong Kong and Singapore.
• For actual purchases, while the branch still dom-inates, markets such as China, the UK and Hong Kong show mobile’s potential. Younger customers are even more likely to go digital for product re-search and purchases, highlighting the need for banks to develop digital sales capabilities.
• Within every country, there’s a wide variation among banks in the share of product purchases made via mobile channels. In the UK, for instance, Barclays has attained 25% compared with the UK average of 18%.
• Mobile is more likely than the branch to delight customers in sales and service interactions and less likely to annoy in most countries.
3.On the horizon, mobilizing sales
Customer behavior and loyalty in retail banking | Bain & Company, Inc.
Page 24
0
20
40
60
80
100%
Chi
na UK
Net
herla
nds
Indi
a
Sing
apor
e
Hon
g Ko
ng
Japa
n
Pola
nd
Ger
man
y
Aus
tralia US
Can
ada
Spai
n
Braz
il
Sout
h Ko
rea
Mex
ico
Fran
ce
Percentage of respondents who made a purchase at their primary bank in the last quarter, 2015, by channels used for research and purchase
Digital only Human and digital Human only
Source: Bain/Research Now NPS surveys, 2015
0
20
40
60
80
100%
Percentage of sales/service interactions per respondent in last quarter, 2015
Mobile
Net
herla
nds
Sout
h Ko
rea
Hon
g Ko
ng
Braz
il
Sing
apor
e
Chi
na UK US
Indi
a
Fran
ce
Pola
nd
Aus
tralia
Spai
n
Japa
n
Can
ada
Mex
ico
Ger
man
y
Online Branch
Source: Bain/Research Now NPS surveys, 2015
Figure 20: Many consumers use digital channels for research and purchase
Figure 19: Mobile has become a major channel for sales and service
Customer behavior and loyalty in retail banking | Bain & Company, Inc.
Page 25
Phone
Percentage of purchasers using channel for purchase, 2015
Mobile Online Branch
0 20 40 60 80%
37788889101313131417171820
MexicoGermanyFranceAustraliaCanadaPolandBrazilJapanSpainNetherlandsIndiaUSSingaporeSouth KoreaHong KongUKChina
20 40 60 80%
138111213
712
799911
781011
6
00 20 40 60 80%
1035
1324
2035
2037
2244
2920
2417
2237
22
0 20 40 60 80%
7345
615255
4656
4256
2845
5152
5747
2951
Source: Bain/Research Now NPS surveys, 2015
0 20 40 60 80%
1415
1118
1415
121717
1419
1212
202121
16 1.1
1.31.31.31.21.21.41.61.6
1.21.21.21.31.31.31.21.2
Average numberof channels used
Phone
0 20 40 60 80%
2343
3447
3040
5530
2732
4933
4746
3855
49
0 20 40 60 80%
1414161819212222
232324
2931
404143
52
FranceGermanyCanadaPolandMexicoAustraliaNetherlandsSpainSouth KoreaBrazilJapanUSUKSingaporeHong KongIndiaChina
Percentage of purchasers using channel for research, 2015
0 20 40 60 80%
544447
4255
4328
51
4845
3844
2835394242
Mobile Online Branch
Note: Purchasers may have used more than one channel to researchSource: Bain/Research Now NPS surveys, 2015
Figure 22 : Consumers are starting to buy bank products via mobile
Figure 21: Asian consumers lead in using mobile for product research
Customer behavior and loyalty in retail banking | Bain & Company, Inc.
Page 26
0
20
40
60
80
100%
Pola
nd
Indi
a
US
Ger
man
y
Spai
n
Braz
il
Can
ada
Fran
ce UK
Hon
g Ko
ng
Sout
h Ko
rea
Chi
na
Percentage of mobile purchases, by product type, 2015
Deposit Credit card Investment Loans Other
Source: Bain/Research Now NPS surveys, 2015
Figure 23: Deposit accounts and credit cards are the most frequently purchased products via mobile
• Most customers, including younger people, still use both physical and digital channels. In most countries, these omnichannel customers give their primary bank higher loyalty scores, as measured by Net Promoter Score, than branch-only or digital-only customers, and they are more likely to buy a product from their primary bank. Also, the more interactions that omnichannel customers have, the higher their Net Promoter Scores.
• When it comes to switching behavior, the more customers use a branch the more likely they are to switch banks: In the US, frequent branch use correlates with an almost three times higher like-lihood of switching than infrequent use. By con-trast, frequent use of mobile and online channels correlates with a 40% lower likelihood to switch banks than infrequent use.
• Banks have been trying to shift their branches away from routine transactions such as deposits, pay-ments and cash withdrawals and into digital self-service channels instead. Progress in making that shift varies widely, with the Netherlands leading and Mexico lagging; Mexico has more than six times the number of routine branch interactions per respondent than the Netherlands.
• The prevailing wisdom has assumed that as banks shed routine volumes from the branch, they should increase sales and service activities. Yet the data show divergent paths: In some markets, such as Hong Kong and Singapore, banks have indeed been transforming branches to take on more sales and service activities. In other markets, such as China and South Korea, banks have downshifted on all interactions, whether routine or sales-oriented.
4.The branch will change or die
Customer behavior and loyalty in retail banking | Bain & Company, Inc.
Page 30
0
20
40
60
80
100%
Percentage of traditional bank respondents, 2015
18–24 25–34 35–44 45–54 55–640
20
40
60
80
100%
Percentage of traditional bank respondents, 2015
18–24 25–34 35–44 45–54 55–64 65+
China UK
Note: Branch-only users, omnichannel users and digital-only users include respondents who interact via ATM and phoneSource: Bain/Research Now NPS surveys, 2015
Branch-only users Digital-only users Omnichannel users
0
20
40
60
80
100%
Percentage of traditional bank respondents, 2015
Chi
na
Indi
a
Mex
ico
Spai
n
Sout
h Ko
rea
Braz
il
Can
ada
US
Hon
g Ko
ng
Fran
ce
Pola
nd UK
Aus
tralia
Sing
apor
e
Ger
man
y
Net
herla
nds
Japa
n
Branch-only users Digital-only users Omnichannel users
Note: Branch-only users, omnichannel users and digital-only users include respondents who interact via ATM and phoneSource: Bain/Research Now NPS surveys, 2015
Figure 25: Even younger customers tend to use both digital and physical channels
Figure 24: Most customers still use both digital and physical channels
Customer behavior and loyalty in retail banking | Bain & Company, Inc.
Page 31
0
20
40
60
80
100%
Low High0
20
40
60
80
100%
Low High0
20
40
60
80
100%
Low High
Branch usage Online usage Mobile usage
Unlikely to switch Likely to switch
Percentage of US respondents, 2015
Notes: Responses for “likely to switch” and “unlikely to switch” are based on responses to the question: “Thinking of your primary bank, how likely are you to switch from it to another bank in the next three months?”; low-usage respondents are in bottom third of frequency for that channel; high-usage respondents are in top third of frequency for that channelSource: Bain bank switching survey US, 2015
Omnichannel users gave higher Net Promoter Scores and weremore likely to purchase a product at their primary bank
They are more engaged, especially through digital channels
Traditional bank Net Promoter Score in US, 2015
Branch-only
Digital-only
Low
Omnichannel
Medium
HighBranch-
onlyDigital-only Low
OmnichannelMedium High
8% 10% 22% 30% 31%
Number of total interactions Number of total interactions
0
10
20
30
40%
Percentage ofrespondents
who purchaseda product inlast quarter,
2015
0
20
40
60
80
100
Average number of interactions in last quarter, 2015, traditional bank respondents in US
Mobile Online ATM Phone Branch
Note: Branch-only users, omnichannel users and digital-only users include respondents who interact via ATM and phoneSource: Bain/Research Now US NPS survey, 2015
Figure 27: The likelihood to switch banks decreases with frequent digital usage but increases with branch usage
Figure 26: Omnichannel customers continue to be more loyal and more engaged
Customer behavior and loyalty in retail banking | Bain & Company, Inc.
Page 32
0.0
0.3
0.6
0.9
0 1 2 3 4 5
Routine interactions at branch in last quarter, 2013 and 2015, US
2013 2015Shrinking branch
2015Redefining branch
2013
Sources: Bain/Research Now US NPS surveys, 2013 and 2015
Sales/service interactions per respondent at branch in last quarter, 2013 and 2015, US
TD Bank
Bank ofAmerica Regions
SunTrust
Citibank
CapitalOneBank
Wells Fargo
PNCBank Fifth
ThirdBank
KeyBank
Citizens BankChase U.S.Bank
0
1
2
0 1 2 3 4 5
Mexico
Routine interactions at branch in last quarter, 2013 and 2015
Sales/service interactions per respondent at branch in last quarter, 2013 and 2015
US
India
Netherlands
France
GermanyAustralia
South Korea
China
Canada
Singapore
Hong Kong
Poland
Japan
UK
Spain
Sources: Bain/Research Now NPS surveys, 2013 and 2015; Bain/GMI NPS surveys, 2013
2013 2015Shrinking branch
2015Redefining branch
2013
Figure 29: US banks are pursuing different branch strategies, but still have room to shed routine volume
Figure 28: Routine interactions at the branch are declining everywhere, but the trend is mixed for sales/service
• Large traditional banks continued to make mean-ingful improvements in their Net Promoter Scores relative to direct or smaller competitors. That change was most pronounced in the US and UK.
• While it is hard to foster change in large organi-zations, some big banks have demonstrated sus-tained progress over the past few years. In the UK, Santander has signifi cantly improved its Net Promoter Score, rising to the No. 2 position among traditional banks. Santander has focused on a simplifi ed current account proposition, fully digital, streamlined account opening and a dedicated switching team to onboard customers. In the US, Chase has followed a similar upward trajectory relative to its competitors.
• What matters most to an individual bank is how it performs relative to its peer group within their market. Using that lens, Net Promoter Scores varied widely from bank to bank. In Germany, for instance, top performer ING-DiBa had a Net Promoter Score that was 97 percentage points higher than the worst performer and 52 points above the country average.
• In-country differentials between the loyalty leader and the laggard were highest in Spain, the US Northeast region, the UK and Germany.
• While there have been some changes in loyalty leadership positions, several banks have held the top spot year over year. These include USAA and Huntington in the US, Bendigo in Australia, Sparda-Bank in Germany and fi rst direct and Nationwide in the UK.
5.Movement on the loyalty leader boards
Customer behavior and loyalty in retail banking | Bain & Company, Inc.
Page 36
Figure 30: In most markets there is a large gap between leaders and laggards
Canada
Mexico
US-Midwest
US-Northeast
US-South
US-West
–100 –80 –60 –40 –20 0%
Am
eric
as
Primary banks’ Net Promoter Scores relative to loyalty leader, which is indexed to zero, 2015
Tangerine
USAA
USAA
TD Bank
TD Bank, PNC Bank, M&T Bank
Huntington
Bank of the West, Chase
USAA
USAA
National Bank, TD Canada Trust
Scotiabank, Banorte
Australia
China
Hong Kong
India
Japan
Singapore
South Korea
Asi
a-Pa
cific
–100 –80 –60 –40 –20 0%
China Merchants Bank, Bank of Communications
Citibank, Hang Seng Bank, HSBC
Industrial Bank of Korea, Shinhan Bank
Japan Post Bank, Shinsei Bank
POSB, OCBC Bank, DBS
ING Direct
Citibank
Bendigo bank
France
Germany
Poland
Spain
UK
Euro
pe
ING DirectLa Banque Postale
ING DiBaSparda-Bank
ING Bank
ING DirectBankinter
first directNationwide
–125 –100 –75 –50 –25 0%
Lowest bankAverage
Highest traditional bankHighest direct bank
Source: Bain/Research Now NPS surveys, 2015
Customer behavior and loyalty in retail banking | Bain & Company, Inc.
Page 37
–1
–5
–25
–38
–19
–19 Bank 4
Chase
Bank of the West
Bank 3
Bank 5
Bank 6
Bank 7
NPS relative to loyalty leader, US, 2012–2015
2015 ranking2012
–4
–14
–17
–19
–37
–8
2013
–0
–9
–9
–22
–4
–10
2014
–10
–2
–22
–6
–25
–13
2015
Sources: Bain/Research Now US NPS surveys, 2012–2015
Figure 32: Chase has improved its loyalty ranking in the western US
–33
–70
–94
–86
–93
–76
–103
–22
Bank 4
Nationwide
first direct
Santander
Bank 5
Bank 6
Bank 7
Bank 8
Bank 9
NPS relative to loyalty leader, UK, 2012–2015
2015 ranking2012
–31
–69
–79
–83
–83
–81
–81
–47
2013
–30
–55
–53
–68
–76
–53
–70
–59
2014
–22
–71
–45
–63
–71
–51
–64
–54
2015
Sources: Bain/Research Now UK NPS surveys, 2012–2015
Figure 31: Santander has signifi cantly improved its loyalty ranking in the UK
Customer behavior and loyalty in retail banking | Bain & Company, Inc.
Page 38
US UK Australia
–20
0
20
40
60
80%
Net Promoter Score
Big 4
Regional/smaller banks
Direct banks
–20
0
20
40
60
80%
Net Promoter Score
2009 2012 ‘13 ‘14 ‘15 2012 ‘13 ‘14 ‘15‘10 ‘11 ‘12 ‘13 ‘14 ‘15
Directbanks
RegionalbanksNationalbanks
–20
0
20
40
60
80%
Buildingsocieties
Direct banks
Net Promoter Score
Large branchbanks
Sources: Bain/Research Now NPS surveys, 2009–2015
Figure 33 : In some countries, large banks have been improving their loyalty scores relative to direct and regional competitors
Customer behavior and loyalty in retail banking | Bain & Company, Inc.
Page 40
Appendix: Methodology
Bain & Company partnered with Research Now, the online global market research organization, to survey consumer
panels in Australia, Brazil, Canada, China, France, Germany, Hong Kong, India, Japan, Mexico, the Netherlands, Poland,
Singapore, South Korea, Spain, the UK and the US. The survey’s purpose was to gauge customers’ loyalty to their
principal bank and the underlying reasons customers hold the views they do. Conducted between July and September
2015, the survey polled 114,696 respondent consumers of national branch network banks, regional banks, private
banks, direct banks, community banks and credit unions in these countries.
In the Americas and Europe, for the individual bank analysis, we included only those banks for which we received at
least 200 valid responses. In Asia, we included banks with at least 100 responses. In many instances, sample sizes
exceeded these thresholds.
Survey questionsRespondents were fi rst asked to identify their primary bank, after which they were asked the following questions to
assess their loyalty to that institution:
• On a scale of zero to 10, where zero represents “not at all likely” and 10 represents “extremely likely,” how
likely are you to recommend your primary bank to a friend or relative?
• Tell us why you gave your primary bank the score you did.
We asked which channels respondents use to do their banking. For each channel used, we asked whether the inter-
action increased or decreased their likelihood to recommend their bank. We also asked respondents whether they’d
purchased a product in the last three months. If so, we asked further questions about which products were purchased
and which channels they used to research and actually buy their banking product. The remaining questions elicited
demographic profi le information: household income, investable assets and region of residence.
On the question of statistical signifi cance, the results of our data analysis are robust both for the measurement of
bank Net Promoter Scores by country and for respondent Net Promoter Scores for each demographic category. For
the Americas and Europe, the Net Promoter Scores measured for each bank in the country and US regional rankings
are statistically signifi cant to an 80% confi dence level, with a two-tailed test of the confi dence interval ranging from
±2.4% (n=992) to ±7.5% (n=200). In Asia, where sample sizes were smaller, confi dence intervals are wider, with a
maximum of ±9.1%.
For more information, visit www.bain.com
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