KARACHI, Dec 10: Customers changing bank every year are setting new trend and this was exceptionally higher in England, providing opportunity for Pakistani banks to tap floating funds being carried by mobile customers.
The research conducted by Group 1 Software in August 2005 indicates that the proportion of customers changing bank every year now stands at 17.5pc per annum, around twice as much as in 2003. Essentially, this indicates that the customers are becoming more mobile and less loyal. The value of these customer movements to banks stands at around $1 billion in profits.
In 2003, 4.3m customers changed banks. This figure now (in 2005) stands at 8.9m. Customer defection in UK banks has doubled. These floating customers are worth around 700m pounds ($1 billion). This alone illustrates a significant trend, which the business community in Pakistan needs to be aware of.
Poor customer service standards are held to be one of the main reasons for customers switching banks. Increasingly prominent financial services institutions in the UK are outsourcing contact centres and document (billing) management services to Pakistan and India. It is believed that poor delivery of customer services in Pakistan and India is creating an uneasy feeling amongst UK bank customers.
India is the real beneficiary of outsourcing of these services and Pakistan has just entered into the field and is making effort to show potential. However, poor services could hurt their effort as the fast trend of changing banks and services depend on the better and attractive services.
The large pool of floating customers could be a target for local Pakistani banks to explore the UK market as a potential region for expanding their business strategies and setting up local branches there. Pakistani banks usually target the Pakistani community living in England, but the rising trend of mobility of customers provides an opportunity for these banks to expand their operation and services.
