Customers change banks on the quiet, spurred by digital trend

BANKS, your customers are quietly leaving you.

When Bain & Company surveyed 83,000 customers in 22 countries recently, it found that more than one-third of them bought a banking product from their primary bank's competitors during the past year. The rate of defection reached an average of 28 per cent in developed countries. In Singapore, 48 per cent of customers went to a different bank to obtain a credit card, buy insurance, or apply for a car loan or another financial product.

If that many bank customers were closing their current accounts each year - completely defecting - bankers would be up in arms. Yet the hidden defection, often involving more lucrative products, goes largely unnoticed by banks because they seldom know their customers were shopping in the first place or that they lost the business.