BAIN REPORT Loyalty in Retail Banking 2013

CUSTOMER LOYALTY IN RETAIL BANKING:
GLOBAL EDITION 2013

What it takes to make loyalty pay off
Copyright 2013 Bain & Company, Inc. All rights reserved.
Customer loyalty in retail banking: Global edition 2013 | Bain &Company, Inc.
Contents
Executive summary: What it takes to make loyalty pay off. . . . . . . . . . . . . . . . . 2
1. Loyalty trends around the world . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
2. Leaders and laggards in the shift to omnichannel . . . . . . . . . . . . . . . . . . . . . . 15
3. Mobile banking expands its mainstream appeal. . . . . . . . . . . . . . . . . . . . . . . 21
4. The battle for scarce new customers. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
5. Cross-selling: The golden opportunity. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
6. Five ways to realize the fruits of loyalty. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
Page i
What it takes to make loyalty pay off
How exactly does customer loyalty translate into better financial results for a retail bank? And how much value
is at stake? For many bankers, the link between loyalty and financial results is somewhat unclear.
This years report, based on Bains proprietary research with 190,200 consumers in 27 countries, sheds light
on how banks are using (or failing to use) loyalty to improve the economics of the business. The research was
conducted online in July and August 2013 through market research firms Research Now and GMI.
In some countries, banks made progress in earning customers loyalty during 2013, as indicated by a rising Net
Promoter ScoreSM (NPS). But Bain analysis shows that they are far from exploiting the full potential of that loyalty.
With new customers more scarce, loyalty is half the battle
In all 27 countries surveyed, banks formed new relationshipscustomers switching their primary bank plus
customers altogether new to bankingat an average rate of about 3% in developed markets and 6% in developing
ones over the past year.
Earning high levels of customer loyalty definitely helps the cause: On average, a banks relative NPS explains roughly
half of the variation in its relative win ratea metric that shows whether a bank is winning more or less than
its fair share of customers. Relatively strong NPS among existing customers thus allows banks such as DKB in
Germany and Bankinter in Spain to win more than their fair share of new customers.
Other factors that influence win rate vary by market, but the factors that customers cite most often include the
level of fees, the convenience of the branch network and the ease of opening an account.
Winning new relationships provides a lifetime of opportunity to sell people more banking products and earn
their advocacy. Given the low rate of new relationship formation, however, this route alone will not be sufficient
as a growth strategy.
The missing payoff from existing customers
Most banks currently miss a significant opportunity for cross-selling to their existing customer base. The steady
expansion of the middle class in emerging markets, combined with digital channels making it easier to purchase
products, has created a huge opportunity to cross-sell, but it has also become easier to buy from a bank other
than your primary provider.
About half of customers in developed countries and 84% in emerging countries opened a new banking product
over the past year. And customers purchased fully one-third of those products, on average, from a bank other
than the customers primary bank. Loyalty matters in cross-selling: For almost every product and in every country,
customers who gave their primary bank a high NPS both own and purchase more products from that bank than
customers who gave a low NPS.
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The unbundling of financial products has spread through some countries faster than others. In the competitive
Hong Kong market, for instance, 77% of customers took a new product, but only 52% chose their primary
bank. Its a different story in Denmark, which has a highly-concentrated banking sector. There, 38% of customers
took a new product, and fully 81% stayed with their primary bank. Competitive forces likely will increase over
time, giving customers even more bank options.
Yet unbundling does not necessarily limit a bank to only a certain share of its customers financial purchases.
Product win ratesthe share of products bought by respondents at their primary bankvary even more by bank than
by country. In the US, the rates range from 38% to 63%, with Huntington National Bank leading overall. Several
years ago, Huntington (which had high NPS to begin with) began to consolidate customer data and build a unified
view across all locations and business units. It replaced its manual sales process with an automated one that made
it easier for employees to manage cross-selling and upselling opportunities. Huntington has gradually grown the
number of products held by customers.
Loyalty plays a key role. The difference in product take-up between customers who are promoters of their primary
bank (those who give an NPS of 9 or 10) and customers who are detractors (those giving an NPS of zero to 6) is
a healthy 14 percentage points on average for developed countries and 10 points in developing countries.
The winning model: Loyalty plus five capabilities
Our research and client work show that loyalty needs to join up with five specific capabilities in order to spur existing
customers to buy more from their primary bank, attract new customers and reduce costs without damaging
customer relationships.
1. Decide where you must win and where youre willing to lose
Banks in many countries have a long history of egalitarian treatment of customers, regardless of how much
their marketers segment the customer base. But catering to the average means catering to no one in particular.
Each customer segment has different priorities, expectations and lifetime value for a bank. Our US survey
finds, for instance, that older customers care more about branch location and quality of branch staff, while
younger customers place greater value on mobile device interactions and rely heavily on recommendations
from family, friends and colleagues.
Leading banks not only know such preferences and behaviors well, they act on that knowledge by taking distinctly
differentiated tacks for each segment. Some loyalty leaders, for instance, have improved offerings for affluent,
high-value customers and wrapped them in premium services. Thats how Citibank has become Asias largest
wealth manager under the Citigold brand.
Others have created entirely separate models for young adults. In Singapore, OCBCs FRANK by OCBC branches
could pass for a hip clothing store. They offer edgy images on debit cards and a simple savings account. What
you dont find at FRANK are tellers or cash.
And some banks profitably serve segments such as pensioners or lower-income customers with good-enough
products and service through light-branch formats. In Malaysia, Maybank serves a mass market with self-service
kiosks open for extended hours. The kiosks allow customers to open an account with just their identification in
10 minutes, for seven product categories.
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2. Design products that pop
Retail banks find it difficult to keep their products distinctive, as product features get copied quickly. At a minimum,
banks must at least keep up with the latest features that customers value. Banks also can differentiate products
at the margin through innovative pricing or by bundling several products together in appealing ways.
Customers obviously care about product features like interest rates and fees, rewards, ease of transaction and, for
more complex products like wealth management, the quality of advice. Banks show a wide variation in how customers
perceive their product performance. Among US banks, the share of customers who say their primary bank performs
well or extremely well on home mortgages ranges from 62% for the lowest bank to 97% for USAA.
In Australia, Westpac has differentiated its BT Super for Life superannuation account by allowing customers to
apply online and to see the account online alongside their current account. St.George links its home equity line
of credit to various interest offset accounts, making it easier for customers to manage taxes and investments.
Whether with a current account, credit card or mortgage, the key is to strike the right price-value balance for the
target customer. And theres a minimum menu of offerings necessary just to have credibility in a category.
3. Accelerate the digital transformation
As digital banking spreads, banks increasingly have opportunities to excel at moments of truth in the customer
experience, such as resolving fraudulent account activity or giving expert advice. They can also use technologies
to delight customers through transactions such as remote deposit capture. Conversely, slow or confusing digital
interfaces will quickly annoy customers.
Banks have made significant progress in the shift from a mostly analog world to an omnichannel world, where
customers expect to be able to use the channel of their choice when and where it suits them. Yet were still in
early days with a long way to go.
More than half of customers interactions on average took place through online or mobile channels, ranging from
75% in Norway to 38% in Mexico. But many banks could make more of the technology or steer customers to
adopt it. Globally, fewer than half of respondents in developing countries and just over one-third of those in
developed countries used smartphones or tablets for their banking. The cross-country variation ranges from
60% in China to 17% in Belgium.
In South Korea, fully 56% of customers engage in mobile banking. Hana Bank has consistently focused on digital
innovations, such as the ability to withdraw cash from ATMs via smartphone, with only the phone number re-
quired, not an account number. Parents can also send money to their children via their smartphones, and the
digital currency works at many Korean retail outlets.
Mobile usage also varies within most national markets. Lagging banks and countries should be concerned, because
mobility continues to spur customers to recommend their bank. Mobile users give an NPS 25 points higher on
average than people who dont use mobile devices, and that premium rises in countries such as China and Thailand.
As banking moves to an omnichannel world, the future of the physical branch remains an open question. But
two things have become clear.
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First, too many routine interactions, like making a deposit, take place in the branch in many countries. Banks
can no longer afford the cost structure that supports such interactions, which could go through lower-cost, self-
service digital channels. Globally, some two-thirds of branch interactions consist of the routine, with only one-
third being sales or service.
Second, branches in every market remain the dominant channel for starting relationships. Roughly three-quarters
of new account openings happen in branches.
During this omnichannel transition, success hinges on making digital channels convenient and defect-free,
and on converting branches to more sales-oriented purposes. Nordea, one of the largest Scandinavian banks,
has shrunk and modified its branch network so that only 45% of branches now manually handle cash, down
from 85% in 2009, and they focus instead on advice and sales.
4. Loyalty gives you the right to win more businessbut you do have to ask for the sale
Banks with strong customer loyalty have an open door to win more of their customers business. For every financial
product and in every country market we have analyzed, we find that promoters buy more products with their
primary bank than detractors do.
That doesnt mean the business comes effortlesslybanks have to ask for it. For example, about one-third of
banking products in the US are sold, not bought. That is, customers did not plan to buy a particular product,
but they received an offer and then decided to get it.
Returning to Maybank in Malaysia, the bank has chosen to bundle products in a way that make it easy to sell them.
Customers apply once for all products and provide all necessary information at that time; they then can activate
and access products as needed, through the channel of their choice.
In Australia, Hong Kong and India, Citibank excels in onboarding and then cross-selling to customers, particularly
in wealth management. Citibank mandates that every relationship manager raises his or her customers share
of wallet each quarter.
Some banks that are loyalty leaders score low on the sales metric, but the good news is that their customers accept
the right kind of sales overtures. Other banks have high selling scores but lag on NPS. These players will want
to concentrate on adjusting the tone of their selling and delivering a better experience after the sale.
5. Build branding that delivers more trust, less buzz
The brand interacts with the other elements discussed here and either enhances or degrades each one. In fact,
a banks NPS tends to be highly correlated with its brand strength.
Banks standing among regulators, legislators and the broad public took a hit in the years following the financial
crisis. In response, many banks have increased their advertising and other forms of explicit marketing over the
past few years, with the hope of restoring their image.
Although building awareness can be useful, a new brand campaign by itself merely applies a fresh coat of paint
on a rusty ship, rather than repairing the engine and hull. Rebuilding trust involves a slow, steady process.
Credibility comes by telling the story of what a bank has to offer, not what it wishes to be. And that story also
gets shaped by the daily interactions with customers.
Page 5
Hang Seng in Hong Kong, for example, promotes the attributes of a friendly, service-oriented local bank. Hang
Seng reinforces these brand attributes not only through activities with local neighborhoods and universities,
but also through convenient branch locations in the local transit system and through staff training.
A customer-led, not marketing-led, perspective on the brand leads bank managers to spend their time differently.
Instead of asking brand questions (Should we rebrand? What logo and tagline should we use?), managers
will find it more effective to start with customer questions (What do our best customers say about us? How
can we amplify that?).
A few large incumbent banks have made meaningful progress on several of the five elements. Consider JPMorgan
Chase in the US. Of all the national banks, Chase posted the biggest NPS gains in 2013, moving from the third
quartile to the second quartile and opening a lead over other national banks. Thats due to such factors as select
investments in mobile technology, a concerted effort to improve the customer experience and effective marketing
to tell people how the bank can simplify their financial lives. Those factors also combined to help Chase perform
well above average in winning new relationships and cross-selling to existing customers.
Every bank can benchmark against competitors in its home market and the best performers globally. This report
introduces the relevant framework and metrics to do so, with an eye toward making focused investments that
will generate superior growth, and make loyalty pay.
Page 6
Page 7
1.
In some countries, customer loyalty as measured
by NPS improved in 2013 from the year earlier,
as the financial crisis recedes and some banks
have devoted more effort to addressing customers
priorities. The continued surge in mobile banking
no doubt contributed to higher scores, because
Loyalty trends around mobile tools have a strong, positive effect on
customer advocacy.
the world
NPS varies by country and is generally higher in
developing countries. But what matters most to an
individual bank is how it performs relative to its
peer group. Within national markets, NPS varies
widely from bank to bank. In Australia, for instance,
top-performer Bendigo has an NPS 45 points
higher than the worst performer and 32 points
above the country average.
For the first time in a US region, a national bank

leads the traditional banks in NPS, with Chase
out front in the South. In 2011, Chase started a
deliberate effort to become more customer-centered
rather than product-centered, and that shift has
paid off with gains in loyalty, new relationships
and share of wallet.
Wealthier customers have a high economic value

when banks earn their advocacy. Banks in devel-
oping markets, like China and India, generally do
better in targeting and serving affluent customers,
which is reflected in their NPS scores from the
affluent. Banks in Canada, the US, the UK, Aus-
tralia and France still struggle in this regard.
Direct banks such as ING and First Direct have

been the NPS leaders in many countries for several
years. They often target self-directed, digital-savvy
customers with a simple proposition around low
cost, high rates and fast processes.
Within each country, theres a wide range of Net Promoter Scores
Primary bank Net Promoter Scores

-80 -60 -40 -20 0 20 40 60 80 100%
TD Canada Trust
Canada Presidents Choice Financial
Mexico Banorte
M&T, TD
US-Northeast USAA
Americas
Huntington
US-Midwest USAA
BB&T, JPMorgan Chase

US-South USAA
Bank of the West

US-West USAA
Australia Bendigo Bank
China China Merchants
Hong Kong Standard Chartered

Asia-Pacific
Japan Japan Post Bank
Singapore Standard Chartered
South Korea Kookmin
Thailand SCB
Belgium Argenta Spaarbank
France Credit Mutuel
Sparda-Bank
Germany DKB
Banca Nazionale del Lavoro

Europe
Italy Fineco
Poland Alior Bank
Bankinter
Spain ING
Nationwide
UK First Direct
Highest traditional bank

Lowest bank
Average Highest direct bank
Notes: Excludes markets with insufficient number of banks (n200); country averages include all banks; highest and lowest banks include only banks where n200
Sources: Bain/Research Now NPS surveys, 2013
Page 10
Banks average Net Promoter Scores improved in a number of countries in 2013
Percentage point difference between 2013 and 2012 Net Promoter Scores
10
8
6
5
5 4 4
3
0
0 0
-1
-2
-3
-4
-5
-6
-10
Singapore China UK France South Mexico US Australia Thailand India Spain Hong Canada Germany
Korea Kong
Developed countries Developing countries

Note: 2012 survey was conducted in 14 countries
Sources: Bain/Research Now and Bain/GMI NPS surveys, 2012 and 2013
Banks in developing countries fare better with affluent customers
Percentage point difference between affluent respondents Net Promoter Score and overall country average
40
36
30
30
26
20 19 18
16 15 15
13
10 9
10 7 7 7
4 4 3
1 1
0
-1 -2
-10 -8 -9
-11 -12
-14
-20
China
Hong Kong
India
Indonesia
South Korea
Russia
Mexico
Denmark
Sweden
Japan
Singapore
Spain
Chile
Belgium
Finland
Poland
Thailand
Netherlands
Canada
US
UK
Australia
France
Norway
Italy
Germany
Developed countries 2013 (4%) Developing countries 2013 (18%)
Notes: Excludes markets with insufficient sample size for affluent respondents
Sources: Bain/Research Now and Bain/GMI NPS surveys, 2013
Page 11
US direct banks still lead in loyalty, yet only national banks improved their positions in 2013
Net Promoter Score by bank type, US
80%
66
62
60
46
40
19
20
0
Direct banks Credit unions Community banks Regional banks National banks
2012 NPS
Sources: Bain/Research Now US NPS surveys, 2012 and 2013
Direct banks have a commanding lead over traditional models in many countries
Percentage point difference between Net Promoter Scores for direct banks and traditional retail banks
100
81
79
80 77
69
66
64
60 58
55
40 35
23
20 18
0
Spain Belgium UK Italy Germany Australia France US Canada Japan Poland
Note: Excludes markets with insufficient sample size for direct banks
Page 12
Page 13
2.
Banks everywhere are expanding digital channels,
but the pace of engagement varies dramatically.
The Nordic countries lead in the share of digital
banking interactions, while a number of Asian
countries lag.
Generational differences in digital usage persist.

Leaders and laggards For example, some 18% of US customers under
age 35 opened an account online, twice as many
in the shift to as customers over age 55.
omnichannel
Countries vary in the pace of their evolution to de-
ploy each type of channel to advantage. Some
countries, particularly the Nordic countries, have
made significant progress in steering routine trans-
actions out of the branch and into lower-cost, self-
service digital channels, including smart ATMs.
Within most countries, individual banks vary widely

in their progress to move the routine to digital chan-
nels and refocus the branch on sales and high-value
service. In Spain, for instance, Bankinter leads
the least digital bank by 25 percentage points.
When it comes to account opening, direct banks

excel in handling the task online. Yet among other
banks, account opening still occurs mostly in the
branch, though thats shifting to the phone in the
UK, Germany and the Netherlands.
Experiments with branch features and layout

abound. Raiffeisens flagship branch in Zurich offers
advanced technologies such as a robotic retrieval
system for round-the-clock access to safety deposit
boxes. Other banks have launched branches that
resemble lounges or cafes, either to complement
a strong direct bank presence or to encourage
high-value relationships.
ATMs play an outsize role in Japan, Indonesia,

Russia and Singapore. In a few places like Singa-
pore, more versatile ATMs make customers lives
easier by allowing them to buy airline tickets or
pay parking fines.
On the path to an omnichannel world, some countries are lagging in digital banking
Percentage of interactions by channel in the last quarter

100%
80
60
40
20
Japan
Norway
Denmark
Sweden
Australia
Netherlands
US
Germany
South Korea
Belgium
Poland
France
Canada
UK
Chile
China
Spain
Argentina
Singapore
Italy
Russia
Hong Kong
Indonesia
India
Thailand
Mexico
Online Smartphone/tablet ATM Branch Phone Other
Developing countries still rely more on branches, on average, while the Nordic countries are eliminating
routine transactions from their branches
Number of branch interactions per respondent in the last quarter
Sales/service
8
7 7 7
7
6 6
6 6
5 5 5
5 4
4 4
4 4 3 3 3 3
Routine
3
2
2
2 2 1
1 1 1
0
Thailand
Mexico
China
India
Chile
Argentina
South Korea
Spain
Hong Kong
Indonesia
US
Canada
Russia
UK
France
Australia
Singapore
Belgium
Poland
Japan
Denmark
Sweden
Finland
Netherlands
Italy
Germany
Norway
Percentage of 86 81 88 82 73 71 66 65 73 80 69 71 64 66 64 48 60 62 59 47 40 39 39 27 22 29 20
respondents using
branch for routine
interaction at
least once
Page 16
Customers everywhere still open new accounts mainly in branches
Percentage of channels used to open primary bank account
100%
80
60
40
20
0
Indonesia
Thailand
Finland
Canada
Mexico
China
Belgium
France
South Korea
Spain
US
Russia
Argentina
Hong Kong
India
Singapore
Sweden
Japan
Poland
Australia
Chile
UK
Denmark
Netherlands
Italy
Norway
Germany
Branch Started online or by phone, but completed in branch Online Phone Other
Page 17
Within countries, theres a wide variation among banks in the extent to which customers use branches
Percentage of respondents who visited a branch for routine transactions in the last quarter
0 20 40 60 80 100%
Canada CIBC
Americas
Mexico Banorte
US Bank of America
Australia Bankwest
India Citibank
Sumitomo Mitsui
Asia-Pacific
Japan
Singapore Post Office Savings Bank
South Korea Standard Chartered First Bank
Thailand Bangkok Bank
Belgium KBC Banque
France La Banque Postale
Germany TargoBank
Europe
Italy Banca Nazionale del Lavoro
Poland Bank Pekao
Spain Bankinter
UK Co-operative Bank
Lowest bank Highest bank

Average
Notes: Excludes markets with insufficient number of banks (n200); country averages include all banks except direct banks; highest and lowest banks include only banks where n200
Page 18
Page 19
3.
Across the globe, mobile banking continues to
spread. Customers have embraced banking on their
smartphones and tablets when banks offer appli-
cations that are both useful and easy to navigate.
Commonwealth Bank of Australia, for example,

offers a versatile mobile platform that allows cus-
Mobile banking tomers to trade stocks, pay third parties using their
expands its mobile number or email, and explore visual and
written details of homes for sale.
mainstream appeal
China, Chile, South Korea and India have leap-
frogged other countries that lag in mobility, like
Belgium, Japan and Canada. In general, the devel-
oping countries have forged further ahead, and
several have more than half of their respondents
using mobile channels. They show an especially
big lead in mobile payments, with almost twice
the level of activity as developed countries.
Within a given country, however, theres a wide

dispersion in mobile uptake. And not all of the
mobile leaders are direct banks. Citibank in India
has a higher mobile penetration than Comdirect
in Germany and Fineco in Italy. In the US, Chase
leads among traditional banks. It invested heavily
in mobile technology such as smartphone pay-
ments, and its recent advertising highlights how
the technology simplifies peoples lives.
Regardless of bank model, frequent mobile users

consistently report higher NPS than non-users. The
greatest gap in NPS between the two groups
occurs in China, Japan and Thailand, while the
narrowest gap is found in Belgium, France and
the Netherlands.
Mobile banking has risen among all age groups

and income levels. But younger customers rank
as the most avid users, especially in Australia,
the US, India and Sweden.
Mobile banking adoption varies widely across countries
Percentage of respondents who used smartphone/tablet apps or bank websites on smartphones/tablets in the last quarter
60
60% 57 56
55 54
53 52
49
48
45
43
40
40 38 38 38 37 37
36 35
33 32
31
27 27 26
22
20 17
0
China
Chile
South Korea
India
Singapore
Hong Kong
Indonesia
Spain
Thailand
US
Australia
Poland
Sweden
Mexico
Russia
France
Norway
Italy
Germany
UK
Finland
Argentina
Denmark
Netherlands
Canada
Japan
Belgium
Average interactions 5 8 10 5 4 5 5 9 4 8 8 7 5 7 4 3 8 4 5 6 5 4 5 5 4 2 3
per respondent in
last quarter Developed countries (38%) Developing countries (46%)
Mobile payment has caught on fastest in developing countries
Percentage of respondents who used smartphone/tablet to make payments in the last quarter
49
50%
40 40
40
35 34
32
30 28
26
23
21 21 21 20 19 19 19
20 18 17 17
15
14 13 13 12
10
10
7 6
0
China
India
Chile
South Korea
Indonesia
Singapore
Hong Kong
Russia
Australia
Spain
Argentina
Thailand
Mexico
Sweden
US
Denmark
Netherlands
Finland
Poland
UK
Canada
France
Belgium
Japan
Norway
Italy
Germany
Developed countries (19%) Developing countries (30%)

Page 22
Within many countries, mobile banking uptake varies widely by bank
Percentage of respondents who used smartphone/tablet apps or bank websites on smartphones/tablets in the last quarter
0 20 40 60 80 100%
Canada TD Canada Trust

Americas
BBVA Bancomer
Mexico
JPMorgan
n Chase
US USAA
Australia National Australia Bank (NAB)
India Citibank
Asia-Pacific
Japan Sumitomo Mitsui Banking Corp.
Singapore Citibank
South Korea Industrial Bank of Korea
Thailand KBANK
Belgium ING Belgique
France Socit Gnrale
Deutsche Bank
Germany Comdirect
Europe
Unicredit
Italy Fineco
Poland AliorBank
Bankinter
Spain
NatWest
UK First Direct
Highest traditional bank

Lowest bank
Average Highest direct bank
Notes: Excludes markets with insufficient number of banks (n200); country averages include all banks; highest and lowest only include banks where n200
Page 23
Younger customers have embraced mobility
Percentage point difference in usage of banking smartphone/tablet app or bank website

on smartphone/tablet between respondents under 35 and those over 55
50
46
40
40
36 36
34
31
30
26
24 23 23 23
20 19
18
10 9
0
Australia US India Sweden UK Canada France Spain Mexico Italy Netherlands Germany Belgium Japan
Note: Excluded markets where n<100 for either age category
Frequent mobile banking users give much higher loyalty scores than other customers
Percentage point difference in Net Promoter Scores between frequent mobile banking users and nonusers
50
42
40
36 36 34 33 33
30 28 28 27 27 26
24 23 22
21 20
20 17
14
10 10
10 8
6 5
0
China
Japan
Thailand
Hong Kong
Singapore
Russia
Poland
Indonesia
Spain
Sweden
Chile
India
Mexico
South Korea
UK
US
Australia
Canada
Netherlands
France
Belgium
Italy
Germany
Notes: Mobile banking includes use of smartphone/tablet apps and bank websites via smartphone/tablet; frequent users are defined as those in the top quartile for the number
of bank interactions using smartphone/tablet apps and bank websites via mobile devices; markets where n100 for any category were excluded
Page 24
Page 25
4.
New banking relationshipspeople either new to
banking or switching their primary relationships
from another bankare hard to come by. Only
0.7% of respondents were new to banking in the
developed world, with another 2.5% switching
from their primary bank.
The battle for scarce Still, winning an outsize proportion of primary
new customers relationships, anchored on the basic checking or
current account, remains an important goal be-
cause of the annuity value of cross-selling other
products. Our survey finds that respondents hold
roughly three other products with their primary
bank besides the basic account.
A banks current NPS strongly predicts its success

in winning these new relationships. NPS explains
about half of the variance among banks in relative
win rate (a banks win of switchers plus first-time
joiners, relative to its share of primary customers).
New customers can be won in many ways. ING

in Spain does it largely by developing strong
product packages, targeted to particular segments
such as university students.
Besides loyalty, what it takes to win new relation-

ships differs by country. Respondents who chose
a new bank most commonly cited fees, ease of
account opening and branch locations as the
reasons. Interest rates also were a major factor
in several markets, including the UK, Sweden and
Singapore. And ATM locations ranked high in
Argentina, Hong Kong, Indonesia and Japan.
Preventing attrition arguably outweighs winning new

relationships, given the slow rate of new account
formation. In the US, banks could have headed
off most of the switching, because three-fifths of
customers cited factors such as high fees and poor
service. Less than one-fifth of switching resulted from
customers taking better offers from other banks.
New banking relationships are hard to find, especially in the developed world
Percentage of respondents forming new primary relationships with banks in the last year
8%
7.3
6.8 6.7
6.5 6.5 6.4 6.4
Switchers
6
5.4
4.6 4.5
4.3
4 3.6 3.6
3.4
2.7 2.7 2.7 2.6 2.6 2.5 2.5

First-time joiners
2.4 2.3 2.2

2 1.8 1.7
1.0
0
Mexico
Indonesia
India
Poland
Argentina
Russia
Thailand
Spain
Chile
Singapore
US
Denmark
Finland
South Korea
Belgium
Hong Kong
France
Australia
UK
China
Sweden
Japan
Canada
Netherlands
Italy
Norway
Germany
In the US, Net Promoter Score helps explain about half the variation among banks in winning new relationships
Relationship win index (banks win of switchers plus first-time joiners relative to its share of primary customers)
3.0
R= 0.48
Huntington (Midwest)
2.5
2.0 TD (Northeast)
BB&T (South)
1.5
M&T (Northeast)
JPMC (South)
1.0
0.5
0.0
-80 -60 -40 -20 0 20 40%
Bank relative NPS
Notes: Banks with relationship win index greater than 1 are winning more than their fair share of new relationships; excludes direct banks, community banks and credit unions;
only includes banks where n200
Source: Bain/Research Now US NPS survey, 2013
Page 28
In Europe and Asia, Net Promoter Score helps explain about half the variation among banks in winning
new relationships
Relationship win index Germany Relationship win index Japan

3.0 4.0
comdirect bank DKB R= 0.44 R= 0.76
2.5 3.5 Online banks
ING-DiBa 3.0
2.0 2.5
1.5 2.0
Sparda-Bank 1.5 Japan Post Bank
1.0
1.0
0.5 0.5
0.0 0.0
-120 -80 -40 0 40 80% -120 -80 -40 0 40 80%
Banks relative NPS Banks relative NPS
Relationship win index Spain Relationship win index UK

3.0 3.0
R= 0.43 R= 0.58
2.5 2.5
Nationwide
2.0 2.0
1.5 Bankinter 1.5 First Direct
ING
1.0 1.0
0.5 0.5
0.0 0.0
-120 -80 -40 0 40 80% -120 -80 -40 0 40 80%
Banks relative NPS Banks relative NPS
Notes: Banks with relationship win index greater than 1 are winning more than their fair share of new relationships; excludes direct banks, community banks and credit unions;
only includes banks where n200
High fees and poor service push customers away, while incentives, interest rates and the right product lure them
Why did you switch from your previous primary bank?
Percentage of responses, US
100%
Other Other
Pull factors
Rates Family/personal Convenience
Bank process
80 Brand reputation Service
Products
Neutral factors Size/scale
Emotional
60 Branches Proximity
Service Products
40 Relocation
Push factors
20 Incentives/
Fees interest rates/
fees
0
All factors Push factors: Neutral factors: Pull factors:
Dissatisfied with Personal Better proposition
previous bank circumstances at new bank
Page 29
Reasons for choosing a new bank differ across countries, though fees and ease of account opening often
lead the list
Respondents ranking of importance of factors for choosing a new bank
recommendations
recommendations
Mobile payments
Financial advisor
Prior relationship
Branch locations
Company brand
Ease of opening
Product features
Online service
ATM locations
Mobile/tablet
Countries
Phone service
Social media
Branch hours
Ability to get
Interest rates
Branch staff
with bank
account
Family
credit
Fees
app
Americas
Argentina 12 3 5 7 7 1 2 11 3 5 18 7 10 16 14 15 13 17
Canada 2 5 4 8 1 9 3 6 6 10 10 13 12 15 14 16 17 18
Chile 2 1 3 5 9 5 9 7 4 7 18 14 9 12 15 17 16 13
Mexico 3 2 1 12 8 5 6 11 4 14 7 9 10 15 13 17 16 18
US 1 5 2 6 3 4 7 11 8 9 10 15 17 12 14 13 16 18
Asia-Pacific
Australia 2 4 5 7 3 9 8 1 6 11 12 10 12 15 15 14 17 18
China 2 6 1 4 9 2 6 11 4 14 8 14 14 9 11 11 17 18
Hong Kong 2 9 3 3 9 1 5 5 8 9 5 9 14 17 14 16 13 18
India 12 1 6 1 4 5 6 8 3 11 13 15 14 16 10 8 17 18
Indonesia 9 2 3 7 12 1 8 11 5 15 3 14 16 4 13 10 18 17
Japan 2 6 3 4 12 1 9 5 6 9 6 13 16 9 16 15 14 18
Singapore 3 6 4 8 7 2 9 1 4 9 9 12 14 16 18 15 12 16
South Korea 1 8 2 11 3 3 7 5 6 8 8 14 14 11 16 16 11 18
Thailand 6 4 3 8 7 1 5 12 15 16 2 13 9 13 9 9 17 18
Europe
Belgium 2 1 6 8 7 9 4 3 5 11 12 10 15 17 14 16 12 18
Denmark 1 6 11 5 4 11 3 2 9 8 15 11 7 11 10 15 15 18
Finland 1 4 6 3 5 17 9 2 11 15 7 8 10 13 11 15 13 17
France 1 6 10 3 4 18 5 2 9 11 12 7 8 16 13 14 15 17
Germany 1 2 5 4 8 3 9 7 13 11 15 16 12 6 14 17 10 18
Italy 1 2 6 4 8 2 5 9 10 7 12 13 11 16 14 15 18 17
Netherlands 8 1 3 3 2 5 5 13 5 15 9 16 11 11 9 14 18 17
Norway 1 3 17 3 5 14 6 1 7 10 17 10 8 10 17 14 8 16
Poland 1 5 9 2 3 3 6 11 10 12 14 15 13 7 16 8 18 17
Russia 2 3 4 7 11 1 9 5 6 10 13 7 14 15 16 17 12 18
Spain 1 5 9 4 3 6 7 8 2 9 11 15 13 16 14 12 17 18
Sweden 3 2 7 3 3 9 6 1 8 10 10 13 12 15 17 14 15 18
UK 5 3 8 4 2 12 7 1 6 9 11 16 17 15 10 14 13 18
Page 30
Page 31
5.
A surprisingly large opportunity exists to sell new
products such as credit cards to existing customers.
In the developing countries, 83% of respondents
purchased a new product over the past year; in
the developed countries, 50% did.
While the primary bank captures most of these new

Cross-selling: The products, on average, 35% of new product sales
go to a competitor. The competitors share ranges
golden opportunity from 19% in Denmark, which has a very concen-
trated banking sector, to a remarkable 60% in the
UK and 54% in Germany, where the global trend
to unbundle product holding has gone further. The
UK and German markets have many specialized
challenger banks, as well as customers who have
a low regard for large banks after the crisis and,
in Germany, who are highly price sensitive.
Cross-selling performance varies even more by bank

within countries. In Canada, for instance, RBC has
a win rate of more than two times the least effective
bank, and Santander has a similar lead in the UK.
While many factors account for this difference in

performance, customer loyalty has a big influence
on a banks current cross-selling performance and
its future potential. Customers who are promoters
of their primary bank buy more from that bank than
detractors do. In developing countries, the NPS gap
between the two groups of customers amounts to
9 percentage points; in developed countries, the
difference is 14 points.
Consider banking products in China. Some 61% of

promoters have bought an auto loan from their pri-
mary bank, vs. just 31% of detractors. The spread
is similar for life insurance and wealth and in-
vestment products.
The higher cross-sell rates that result from stronger

loyalty lead to broader product holdings with the
primary bank as well. Promoters hold on average
68% of products with their primary bank vs. 60%
for detractors.
A huge share of customers in most countries are buying new banking products
Percentage of respondents who purchased at least one new product in the last year
100% 96
92
85 85
80
80 77 77 76 75
71 71
63
61 59
60 55
51
49
46
43 43 41 40 39 38
40 36 36
33
20
0
China
Thailand
Russia
India
Indonesia
Hong Kong
Mexico
South Korea
Chile
Argentina
Singapore
Poland
Spain
UK
France
Sweden
Finland
US
Australia
Belgium
Denmark
Canada
Japan
Netherlands
Italy
Germany
Norway
Roughly 65% of new product sales, on average, are won by customers primary banks, but the share is lower
in some of the more competitive countries
Percentage of new products purchased at primary banks
100%
81
78 76 75 75
75 71 71 70 70 70 69 68 68 66 65
62 61 60 58 58 57 57
53 52 50
50 46
40
25
0
Chile
China
Japan
Australia
India
Indonesia
Belgium
Thailand
Canada
Netherlands
South Korea
Singapore
Hong Kong
US
UK
Denmark
Finland
Russia
France
Spain
Argentina
Sweden
Mexico
Poland
Norway
Germany
Italy
Page 34
Within countries, banks vary widely in their cross-selling performance
Percentage of products purchased by respondents at their primary banks
0 20 40 60 80 100%
Canada RBC Royal Bank

Americas
Mexico Banamex
US Huntington National Bank
Australia Commonwealth Bank
Japan Japan Mizuho Bank

Asia-Pacific
Singapore United Overseas Bank
South Korea Kookmin Bank
Thailand Bank of Ayudhya
Belgium ING Belgique
France CrditMutuel
Germany Sparkassen
Europe
Italy BancoPopolare
Poland AliorBank
Spain La Caixa
UK Santander
Lowest bank Highest traditional bank

Average
Notes: Excludes markets with insufficient number of banks (n200); country averages include all banks; highest and lowest only include banks where n200
Page 35
Throughout the world, customers who are promoters of their primary banks buy more from their banks than
detractors do
Percentage point difference in the share of products purchased at primary bank between promoters and detractors
25
22
22 21
20
18 17
17 17
15 15
15 14 14 14
12 12 11 11
10
10 9 9 9 9
8
7
6
5 4
0
Hong Kong
Australia
Belgium
Netherlands
Canada
Spain
Sweden
Poland
Denmark
France
UK
Mexico
US
Russia
China
Argentina
Chile
South Korea
India
Thailand
Indonesia
Singapore
Japan
Germany
Italy
Note: Markets where n >100 for any category are excluded; promoters give NPS of 9 or 10; detractors give NPS of 0 to 6.
And across all products, promoters buy more from their primary banks than detractors do
Percentage of products purchased at respondents primary banks (China, 2013)
Savings account Debit card Credit card Home mortgage Wealth/investments
77 73 74 72 75
68 67 68
64 61
57 55
49 45
30
Mutual funds Private banking Auto loan Life insurance Small business
87 83
71 75
61 63 66
59
48 49 48 48
44
36
31
Primary bank NPS category Promoter Passive Detractor

Source: Bain/GMI China NPS survey, 2013
Page 36
Promoters also own more products than detractors do, throughout the world
Percentage point difference in the share of products held at primary bank between promoters and detractors
15%
11 11 11 11 11 10 10 10
10 10 9 9 9 9 9 9 8 8
8 8 8 7 7 7
6
6
5
0
Canada
Sweden
Russia
Hong Kong
Mexico
China
Netherlands
Belgium
Germany
India
France
Argentina
Australia
Denmark
Poland
South Korea
US
Chile
UK
Indonesia
Thailand
Singapore
Spain
Finland
Japan
Italy
Note: Markets where n=greater than 100 for any category are excluded
And across all products, promoters own more at their primary banks than detractors do
Percentage of products held at respondents primary banks (China, 2013)
Savings account Debit card Credit card Home mortgage Wealth/investments
71 68 70 68 71
66 65 66
62
56 57 58
44 43
30
Mutual funds Private banking Auto loan Life insurance Small business
83
78
68 71
63 65
56 59
48 51
46 45
40
34 35
Primary bank NPS category Promoter Passive Detractor

Source: Bain/GMI China NPS survey, 2013
Page 37
6.
Winning new customers, limiting attrition and
seizing the cross-sell opportunity all start with a
banks ability to earn loyalty. But the experiences
of leading banks show that five other elements are
required in order to generate outsize growth.
These start with insightful and practical customer

Five ways to realize segmentation schemes. In the US, younger custom-
ers place far more importance on recommenda-
the fruits of loyalty tions from others and on mobile tools than older
customers, who care relatively more about branch
location and helpful staff.
Banks must also ensure that they have a competitive

suite of products. In the US, no traditional bank
ranked highest on more than one product, so they
clearly have room to improve.
Selling capabilities are critical. In the US, roughly

one-third of products get sold, not bought. The
leading bank performs two to five times better than
the laggard, depending on the product category.
Service stands as the dominant cause of loyalty in

most markets. To delight customers these days, the
banking experience must be consistent and seamless
in person, online, on mobile and on the phone,
because customers increasingly hop among chan-
nels to complete a task.
Finally, these four capabilities should reinforce and

be supported by the banks brand and reputation.
USAA has one of the strongest brands in banking
despite its modest investment in advertising, in
part because it serves such a specific, homoge-
neous group of customersthe military, veterans
and their familiesand consistently delivers on
the brand promise.
In general, loyalty leaders outperform on both win

rates for new relationships and cross-selling to
existing customers. Banks that have advanced on
several of the five elements thus have started to
translate loyalty to better economics.
Making loyalty pay to its full potential requires mastering five elements
Reinforce the brand
Segment and target customers
Transform Enhance
customer Making loyalty pay product
experience proposition
Improve sales capabilities
Source: Bain & Company
In the US, older customers put relatively more value on branch location, while younger customers care more
about mobile applications and recommendations
Percentage of respondents age 55 and over who said specific factors were a major influence on their decision to switch banks (US, 2013)
60%
More important to those 55 and over
Branch locations
40 Branch staff
Positive recommendations from

family, friends or coworkers
20
Ability to make mobile payments
Smartphone/tablet app
More important to those 35 and under

0
0 20 40 60%
Percentage of respondents age 35 and under indicating specific factors were a major influence to switch banks
Note: The data was indexed for frequency of major influence for both 35 and under and 55 and over segments
Page 40
Individual banks perform quite differently on the various factors that influence a new account
Percentage of US respondents who said specific factors were a Bank performance (respondents
major influence on their decision to open a savings account average rating, on a scale of 15)
80% 5.0
62
60 4.5
48 46 46 45
43
40 40
40 4.0
33
24
22
20 3.5
11
0 3.0
Fees Branch Company Application Product Online Interest Branch Branch Smartphone/ Phone Social
locations brand process features service rates staff hours tablet app service media
recommendations
Direct bank A National bank B

Source: Bain US Banking Product survey, 2013
A banks ability to attract certain segments can be gauged by the attributes of its new customers
Percentage of US respondents with a new primary relationship in the last year

0 20 40 60%
Age <35 Fifth Third Ally
Age >55 Ally Fifth Third
Assets >$100K Huntington Capital One
Assets >$500K TD SunTrust
Mobile payment has

Community USAA
major influence
Branch location/hours
have major influence USAA TD
Self-reported as
"self-directed" M&T Bank Capital One 360

Average
Note: Excluded banks that had fewer than 30 new relationship formations or new product wins
Sources: Bain/Research Now US NPS survey, 2013; Bain US Banking Product survey, 2013
Page 41
In the US, banks vary widely in their performance on product features
Thinking about the product you purchased, how well do you think your bank performed on the dimension of product features?
Percentage of respondents who rated their banks a 4 or 5

1 is not well at all and 5 is extremely well
50 60 70 80 90 100%
TD
Savings account Capital One 360
Credit card Citibank

(primary) USAA
U.S. Bank
Home mortgage USAA
Home equity line of credit PNC Bank
JPMorgan Chase
Wealth management/
investment products USAA
Highest direct bank

Lowest bank
Average Highest traditional bank
Note: Excluded banks with fewer than 30 new product wins, except for home equity line of credit, which excluded banks with fewer than 15 new product wins
Roughly one-third of products are sold, not bought
Which of the following statements best describes why you got a specific product?
Percentage of US respondents who said, I was not initially planning to get it, but received an offer and decided to get it
0 10 20 30 40 50 60 70 80%
Savings account Capital One
Credit card
Citibank
(primary)
Home mortgage JPMorgan Chase
Home equity line of credit Wells Fargo
Wealth management/
Bank of America
investment products

Average
Page 42
Across countries, services and fees/rates usually have the biggest effect on loyalty
Mentions per 100 responses
125 120
22
100
100 93
6 19
82 85
19 9
6
75 19 13 6
6 7
7 8
7 10
9 7 31
50 7
12 7 20
14 10
29
25 21 7 20
18 18
33 38 33 36 34
6 7
5 5
7 6 9 7 6
0
Positive Negative Positive Negative Positive Negative Positive Negative Positive Negative
US Canada UK Germany Australia
Service Fees/rates Products Branch Emotional Online Other
Note: Excludes responses where no rationale was given

Brand strength varies significantly, but a few banks are showing strong performance across product categories
How well do you think your bank performed on the dimension of brand?
Percentage of US respondents who rated their banks a 4 or 5
50 60 70 80 90 100%
Citibank
Savings account USAA
Credit card JPMorgan Chase

(primary) USAA
JPMorgan Chase
Home mortgage USAA
Home equity line of credit JPMorgan Chase
Wealth management/ JPMorgan Chase

investment products USAA
Highest direct bank

Lowest bank
Average Highest traditional bank
Page 43
Loyalty leaders are more likely to win new customers and cross-sell to current customers
Percentage of products purchased by US respondents at their primary banks in past year
65%
Huntington
JPMorgan Chase Ally
Citibank
Capital One
Bank of America BB&T
Wells
Fargo U.S. Bank
TD
TD
50
USAA
Direct bank
Direct bank
35
0.0 0.5 1.0 1.5 2.0
Relationship win index
NPS quartile Top Second Third Bottom
10,000
respondents
Notes: Banks where n<200 are not shown; for national and regional banks, NPS quartiles were determined using regional respondent-weighted-average relative Net Promoter
Scores; all listed direct banks included in top quartile
Page 44
USAAs progress on the five dimensions has helped it excel in many product areas
Average number of deposit products (excluding checking) owned at primary bank per US respondent
1.3
1.0
0.8
0.5
0.3
0.0
USAA
Citibank
CapitalOne
360
Sovereign
Wells Fargo
Citizens
M&T Bank
Fifth Third
PNC
U.S. Bank
BB&T
CapitalOne
JPMorgan
Chase
TD Bank
Regions
SunTrust
Bank of
America
Average number of credit cards owned at primary bank per US respondent
1.0
0.8
0.6
0.4
0.2
0.0
USAA
Citibank
JPMorgan
Chase
CapitalOne
Bank of
America
U.S. Bank
Fifth Third
Wells Fargo
Citizens
BB&T
M&T Bank
PNC
Sovereign
Regions
CapitalOne
360
TD Bank
SunTrust
Average number of lending products owned at primary bank per US respondent
0.5
0.4
0.3
0.2
0.1
0.0
Fifth Third
USAA
Wells Fargo
U.S. Bank
BB&T
Sovereign
M&T Bank
Citizens
Citibank
JPMorgan
Chase
Bank of
America
PNC
Regions
CapitalOne
TD Bank
CapitalOne
360
SunTrust
Average number of wealth management products at primary bank per US respondent
0.3
0.2
0.1
0.0
USAA
CapitalOne
360
Wells Fargo
M&T Bank
Citibank
Fifth Third
JPMorgan
Chase
BB&T
Sovereign
Bank of
America
PNC
Citizens
CapitalOne
U.S. Bank
Regions
TD Bank
SunTrust
National Regional Direct

Note: Results based on a standard set of 11 products
Page 45
Appendix: Methodology
Bain & Company partnered with Research Now, the online global market research organization, to survey consumer
panels in Argentina, Australia, Belgium, Chile, Canada, Denmark, Finland, France, Germany, Italy, Japan, Mexico,
the Netherlands, Norway, Poland, Russia, Spain, Sweden, the UK and the US. The surveys purpose was to gauge
customers loyalty to their principal bank and the underlying reasons they hold the views they do. Conducted in
the summer of 2013, the survey polled 177,937 customers of national branch network banks, regional banks, private
banks, direct banks, community banks and credit unions in these countries. We included in the individual bank
analysis only those banks for which we received at least 200 valid responses, though in many countries, sample
sizes exceeded 200 for each bank included.
Bain worked with GMI to survey a further 12,251 account holders in China, Hong Kong, India, Indonesia,
Singapore, South Korea and Thailand. Similarly, individual bank Net Promoter Scores are based on the responses
of at least 200 participants.
Survey questions
Respondents were first asked to identify their primary bank, after which they were asked the following three
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.
How long have you used this bank as your primary bank?
If respondents had been with their current primary institution for less than a year, they were asked to identify
whether they were new to banking or if they had switched from another institution. We subsequently asked about
their prior primary banking relationship, why they switched banks, what influenced them in their choice of a new
bank and which channel they used to open their new account.
For all survey respondents, we asked what major products they hold with their primary bank and other banks, and
which of these products were purchased in the last year. We also asked which channels they use to do their
banking. The remaining questions elicited demographic profile information on household income, investable
assets and region of residence.
We followed up with 5,200 US respondents to ask more detailed questions about their purchase of specific products,
including their product NPS, the methods they used to research their purchases, the channel they used to purchase the
product, the major factors that influenced them in the purchase of the product and how the bank performed on those
factors. For those people who did not purchase from their primary bank, we asked reasons for purchasing elsewhere.
On the question of statistical significance, the results of our data analysis are robust both for the measurement of
bank NPS by country and for respondent NPS for each demographic category. The NPS measured for each bank
Page 46
included in the US regional rankings is statistically significant to an 80% confidence level, with a two-tailed test
of the confidence interval ranging from plus or minus 1.5% (n=4,500) to plus or minus 6.8% (n=201). In countries
where sample sizes were smaller, confidence intervals are wider, with a maximum of plus or minus 7.5%.
Countries classified as developed are based on the World Banks high-income category; the developing countries
are based on its middle- and low-income categories.
Net Promoter and NPS are registered trademarks of Bain & Company, Inc., Fred Reichheld and Satmetrix Systems, Inc.
Net Promoter SystemSM and Net Promoter ScoreSM are trademarks of Bain & Company, Inc., Fred Reichheld and Satmetrix Systems, Inc.
Page 47
Key contacts in Bains Global Financial Services practice
Global: Philippe De Backer in Dubai (philippe.debacker@bain.com)

Edmund Lin in Singapore (edmund.lin@bain.com)
Americas: Mike Baxter in New York (mike.baxter@bain.com)
Europe, Middle East and Africa: Henrik Naujoks in Dsseldorf (henrik.naujoks@bain.com)
Asia-Pacific: Gary Turner in Sydney (gary.turner@bain.com)
Acknowledgments
This report was prepared by Gerard du Toit and Maureen Burns, partners in Bains Financial Services practice,
and a team led by Christy de Gooyer, a practice area manager. 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.
Page 48
Shared Ambition, True Results
Bain & Company is the management consulting firm that the worlds business leaders come to when
they want results.
Bain advises clients on strategy, operations, technology, organization, private equity and mergers and acquisitions. We develop
practical, customized insights that clients act on and transfer skills that make change stick. Founded in 1973, Bain has 50 offices
in 32 countries, and our deep expertise and client roster cross every industry and economic sector. Our clients have outperformed
the stock market 4 to 1.
What sets us apart
We believe a consulting firm should be more than an adviser. So we put ourselves in our clients shoes, selling outcomes, not
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of their business. Our Results Delivery process builds our clients capabilities, and our True North values mean we do the right
thing for our clients, people and communitiesalways.
For more information, visit www.bain.com

BAIN REPORT Loyalty in Retail Banking 2013

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CUSTOMER LOYALTY IN RETAIL BANKING:

GLOBAL EDITION 2013

Executive summary: What it takes to make loyalty pay off. . . . . . . . . . . . . . . . . 2

1. Loyalty trends around the world . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9

2. Leaders and laggards in the shift to omnichannel . . . . . . . . . . . . . . . . . . . . . . 15

3. Mobile banking expands its mainstream appeal. . . . . . . . . . . . . . . . . . . . . . . 21

4. The battle for scarce new customers. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27

5. Cross-selling: The golden opportunity. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33

6. Five ways to realize the fruits of loyalty. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39

What it takes to make loyalty pay off

With new customers more scarce, loyalty is half the battle

The missing payoff from existing customers

The winning model: Loyalty plus five capabilities

2. Design products that pop

3. Accelerate the digital transformation

5. Build branding that delivers more trust, less buzz

For the first time in a US region, a national bank

Wealthier customers have a high economic value

Direct banks such as ING and First Direct have

Within each country, theres a wide range of Net Promoter Scores

Primary bank Net Promoter Scores

BB&T, JPMorgan Chase

Bank of the West

Australia Bendigo Bank

China China Merchants

Hong Kong Standard Chartered

Japan Japan Post Bank

Singapore Standard Chartered

South Korea Kookmin

Belgium Argenta Spaarbank

France Credit Mutuel

Banca Nazionale del Lavoro

Poland Alior Bank

Highest traditional bank

Banks average Net Promoter Scores improved in a number of countries in 2013

Developed countries Developing countries

Banks in developing countries fare better with affluent customers

Developed countries 2013 (4%) Developing countries 2013 (18%)

Net Promoter Score by bank type, US

Sources: Bain/Research Now US NPS surveys, 2012 and 2013

Generational differences in digital usage persist.

Within most countries, individual banks vary widely

When it comes to account opening, direct banks

Experiments with branch features and layout

ATMs play an outsize role in Japan, Indonesia,

Percentage of interactions by channel in the last quarter

Sources: Bain/Research Now and Bain/GMI NPS surveys, 2013

Number of branch interactions per respondent in the last quarter

Customers everywhere still open new accounts mainly in branches

Percentage of channels used to open primary bank account

Singapore Post Office Savings Bank

South Korea Standard Chartered First Bank

Thailand Bangkok Bank

Belgium KBC Banque

France La Banque Postale

Italy Banca Nazionale del Lavoro

Poland Bank Pekao

Lowest bank Highest bank

Commonwealth Bank of Australia, for example,

Within a given country, however, theres a wide

Regardless of bank model, frequent mobile users

Mobile banking has risen among all age groups

Mobile banking adoption varies widely across countries

Sources: Bain/Research Now and Bain/GMI NPS surveys, 2013