This Report explores the subject of loyalty in financial services, focusing on the areas of retail banking and general insurance.

Loyalty is a two-way relationship between customers and providers, and can mean different things to different people and different providers. From a consumer perspective, it relates closely to issues such as brand usage and engagement, satisfaction and switching behaviour. There are also intangible factors at play, such as a person’s emotional connection to, and perceived trust in, a brand. From a provider perspective, it manifests in the length and depth of the customer relationship. Consequently, loyalty is difficult to pin down and quantify and, as such, can be hard to achieve – especially for new brands with limited scale and marketing capability.

In this Report, we consider the different approaches employed by financial providers to garner customer trust and brand loyalty and identify the challenges they face in trying to achieve this. We reveal what makes consumers more inclined to show loyalty to a particular bank, building society or insurance company. In addition, we draw on the findings of our consumer survey to show how different types of provider and individual brands fare in relation to five measures associated with loyalty. These are: multiple products (proportion of customers who own more than one of the brand’s products), trust (proportion of customers who trust the brand to resolve any problems), reward (proportion of customers who feel rewarded for their loyalty or custom), tenure (proportion of customers who have been with the brand for at least five years) and recommendation (proportion of customers who would recommend the brand to others).