1. Exploring the relationships that customers want to have with their retail bank 2014 Harris Interactive

2. 2 1 Understanding retail banking relationships today 2 Switching & Brand 3 Digital Banking 4 "A customer is the most important visitor on our premises, he is not dependent on us. We are dependent on him. He is not an interruption in our work. He is the purpose of it. He is not an outsider in our business. He is part of it. We are not doing him a favour by serving him. He is doing us a favour by giving us an opportunity to do so. Jumping out of the banking Mahatma Gandhi box 2

3. Financial services has been living under a grey cloud for a long time Financial Services is one of the least trusted industries, is it any surprise? Pension mis-selling Endowment mortgages Collapse of Equitable life, BCCI & Bearings Irresponsible lending ATM Charges Late payment charges/Over-drafts PPI Bailouts LIBOR Payday loans Service failures Indiscrete indiscretions 3

4. It is one of the least trusted industries is it any surprise? 79% 77% 71% 70% 69% 69% 64% 64% 62% 59% 49% 44% 43% 32% 32% Technology Cons electronics Brewing and spirits Food and beverage CPG Entertainment Automotive Cons. Health Telecommunications Pharma Chemicals Financial services Media Banks Energy Source Edelman Trust Barometer UK Up 10%pts 4

5. So how do banks make customers feel? Secure In control Relaxed Confident Supported Valued Happy Grateful Optimistic Disappointed Frustrated Sceptical Powerless Angry Neglected Uninterested Worried Depressed Apathetic Resentful Net Positive: 72% Net Negative: 24% High 40% Low 0% 5

6. And many consumers have the relationship they want with with their bank 16% 48% 32% AGREE Completely Agree Agree I would like a closer relationship with ..... 15% At least Agree 6 The type of relationship I have with ....... is what I want

7. But some do want something different .... I want a return to old fashioned banking with a more personalised service 41% 15% 37% 26% 41% AGREE 7 Completely Agree Slightly Agree

8. 8 So how do individual banks rate? The relationship I have is what I want 70%+ 60%-69% 50% - 59% 40% - 49% 30%-39% Under 30% .......................................................................................................................................................................................... I want a return to old fashioned banking Although these customers arent getting what they want, there is also a clear link with age 48% 41%

9. The Harris Relationship Score Emotional Satisfaction Likelihood to recommend/NPS Values you as a customer Relationship based on trust Likelihood to continue using Preferred banking provider Gives something different Relationship Score 9

10. Its time for the bank bashing to stop! 54% 53% 51% 51% 47% 45% 38% Banks Credit cards Pay TV Mobile Motor Insurance Home Insurance Energy Relationship Score 73% 66% 55% 59% 61% 51% 41% 10 Best Performer Relationship Score ...........................................................................

11. Its time for the bank bashing to stop! 11 And only 11% Dont care who they bank with I trust my bank completely, and it has been built over a long time. They have always dealt with all my banking needs to a very high standard, and I feel very loyal towards them. They often inform me of new products that are relevant to me, but do not bombard me. The in-branch staff have become more like friends, and we even exchange cards (female, 34-45, fully connected)

12. 12 Harris Interactive

13. And why is this? DRIVERS OF A STRONG RELATIONSHIP DERIVED IMPORTANCE Service provided* Understanding needs* Range of products/services Clarity of comms* Listening to you Staff professionalism Ease of understanding products * At least10% gap between first place and 2nd = 13 1st 2nd 3rd

14. Why having fully connected customers is important Emotionally & Rationally Connected 11% Emotionally Connected 14% Rationally Connected 11% Indifferent 36% Disconnected 9% All Banks 14 FULLY CONNECTED 19% Emotional

15. And there are big differences in how customers feel when they are fully connected with a bank...... fully connected banking customers 15

16. disconnected banking customers 16 Vs those who are at the opposite end of the spectrum ......

17. And there is a tangible commercial benefit 17 Hold more products Consider more products Cost less to serve Less complaints Less likely to switch Higher advocacy/WOM fully connected banking customers

18. Date 2012 (Jan) 2012 (Jul) 2013 (Jan) 2013 (Aug) Relationship Score 43% 41% 45% 51% Santander - The road to a higher state 2014 Relationship Score 57 63 Rational 56 Emotional Intentional 59% Base: 251 UK adults, aged 18+, who have their primary bank account with Santander

19. 2014 - Top 3 Rewards you for loyalty Communicate the way you want Service provided Quality of online banking Relevance of products to me Ranges of products Performance 1st 2nd 2nd 3rd 3rd 3rd 3rd 3rd Quality of mobile banking app Staff knowledge 3rd Competitive charges / fees 19 Santander - The road to a higher state Highest importance

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21. 2014 - Top 3 Treating you as an individual Staff professionalism Communicates at a time you want Relevance of communications Listening to you Performance 1st 2nd 2nd 2nd 2nd 2nd 2nd 3rd Value for money Amount of communication 3rd 21 Highest importance The Co-operative A fall from grace, but has bouncebackability Clarity of Communication Easy to understand products 3rd Understanding needs

22. Summing up Banks compare well to other sectors Not all banks are equal Its important to be connected The sector is viewed negatively, but customers are more positive about their own banking relationship 22

23. #customerpower Phil Brooks pbrooks@harrisinteractive.com @mrresearcher 0161 242 1360 Debbie Senior dsenior@harrisinteractive.com debbie_senior 07989 388 825 Harris Interactive 23