FICO Survey: U.S. Banks Under-Leveraging Customer Loyalty

SAN JOSE, Calif., June 25, 2014 /PRNewswire/ -- A comprehensive survey of U.S. bank customers conducted for FICO (NYSE:FICO), a leading predictive analytics and decision management software company, 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.

"The shifting interest rate landscape leaves U.S. banks scrambling for new sources of revenue and profit," said David Vonk, who leads the North American banking practice at FICO. "To remain competitive in a largely saturated market, banks should invest in more refined strategies to acquire younger customers, and deepen relationships with their happy existing customer base."

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.

About FICO

FICO (NYSE: FICO) is a leading analytics software company, helping businesses in 90+ countries make better decisions that drive higher levels of growth, profitability and customer satisfaction. The company's groundbreaking use of Big Data and mathematical algorithms to predict consumer behavior has transformed entire industries. FICO provides analytics software and tools used across multiple industries to manage risk, fight fraud, build more profitable customer relationships, optimize operations and meet strict government regulations. Many of our products reach industry-wide adoption. These include the FICO^® Score, the standard measure of consumer credit risk in the United States. FICO solutions leverage open-source standards and cloud computing to maximize flexibility, speed deployment and reduce costs. The company also helps millions of people manage their personal credit health. FICO: Make every decision count^™. Learn more at www.fico.com.

FICO and "Make every decision count" are trademarks or registered trademarks of Fair Isaac Corporation in the United States and in other countries.

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SOURCE FICO