Customers maintain loyalty to banks despite low trust in sector

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The Synovate survey covered 29 international and 211 local banks in 13 countries.  The findings also revealed that in most markets, people's first preference is to seek financial advice from family members rather than turning to banks or financial institutions.  Only in Poland did customers choose banks as their preferred source of financial advice, while Saudi bank customers turn to close friends and colleagues first.

Consumers across many of these markets have low opinions of both international and local banks.  International banks bottomed out in Hungary and Greece, with positive ratings from only 16% and 17% of consumers respectively. The worst opinions of local banks were voiced in Romania and Ukraine (18% and 24% positive respectively), while Greeks did not think well of their local institutions either (just 25% positive). However, a whopping 81% of Saudis expressed a positive view of their local banks, as did 58% in the UAE, 55% in Poland and 54% in Russia, while international banks fared best in the UAE and Saudi Arabia (47% and 46% positive respectively). Overall, a majority of consumers in 8 of the 13 markets trust banks and financial institutions less than they did before the crisis, led by70% of Ukrainians and 69% of Greeks. 

But despite the relatively low opinions across the region, overall customer loyalty in the banking sector is quite high, according to Synovate's findings.  In all markets surveyed, fewer than 1 in 5 banking customers have a weak relationship with their banks.  Customers who could be described as "passionate" about their banks accounted for 59% in Saudi Arabia, 58% in the UAE and 54% in Russia, while the Slovak Republic had the least loyal consumers (only 18% "passionate").

"But while financial institutions have to work hard to regain their customers' trust," Thompson adds, "it appears that in most markets consumers are not ready to switch banks: either because the hassle of doing so outweighs any perceived benefit, there is a lack of better alternatives or because individual banks are not necessarily singled out for blame over the financial crisis."

People's outlook for the immediate future varies considerably across the markets surveyed.  While 62% of bank consumers in Saudi Arabia believe their personal financial situation will improve in the next 6-12 months - along with 46% of those in the UAE and 39% in Russia - the outlook was far worse in Hungary and the Czech Republic, where 28% and 25% respectively expect financial difficulties to worsen, as do 20% in Bulgaria and 19% in Greece.  Interestingly, the outlook was split in Turkey, with the fourth highest number of consumers feeling optimistic about their immediate future (35%) but also as many as in neighbouring Greece (19%) expecting financial worries to grow.

Asked how they would invest a 1 million Euro windfall, consumers across the region are most likely to spend it on housing: Notably 50.2% in Hungary, 44.1% in the Czech Republic and 43.6% in Russia would opt to buy a housing property or bigger dwelling to live in.  The exception was the UAE, where the top choice - expressed by 23% - is to open their own business, followed by 20.5% in Saudi Arabia and 15.3% in Serbia.  Lifestyle-related spending also figured amongst preferences, with 13.3% of Greeks and 6.7% of Czechs choosing to go or take their family on a "dream holiday."  Savings are a consideration for some (led by 8.6% of Slovaks and 6.6% of Polish consumers) but financial investments, such as government bonds, mutual funds and shares, are only marginally considered across the region, ranking first amongst only 5.3% in Hungary, 4.7% in the UAE, 3.8% in Poland, and 3.6% in Saudi Arabia. Overall, the findings point to a desire among consumers to improve their standard of living.

The Synovate survey also measured the brand equity and image, quality of services and products, level of emotional attachment from customers, and key drivers of loyalty for individual banks across the region. As Thompson notes, "This is a trying time for banks and their customers alike. Our research helps financial institutions understand what drives customer loyalty and how to improve their customer experience, ultimately allowing them to strengthen relationships with the banking public."

© Press Release 2010