How ‘Lazy Loyalists’ Hide Eroding Customer Retention

Every Monday morning, as an exercise, consultant Michael Abbott queries his bank’s chatbot to see how it answers the same question: "What’s the interest rate on my account?"

"It’s a pretty basic question, right?" says Abbott, and yet he has yet to get a simple, direct answer.

"Instead, the chatbot pushes me off to a bunch of PDFs and in the end, you can’t find the rate," Abbott complains. He won’t say which bank’s chatbot, but allows that he thinks all chatbots are "fast and stupid" and "glorified FAQs."

And yet he stays.

"I’m leaving way too much money in this account right now," says Abbott, senior managing director and global banking lead at Accenture. Part of the rationale is that as tax time approaches, Abbott needs the liquidity. But there’s another reason, one that actually goes against his professional grain.

Abbott confesses that he is a "lazy loyalist" — a consumer who remains with their bank or credit union for no good reason.

And Abbott’s got company. Accenture’s 2025 Banking Consumer Study, conducted over 39 countries, finds that three out of five bank customers have stuck with their primary bank for over seven years. But that’s not good news, not really. That’s in spite of many of them showing little desire to advocate for their institution with other consumers who may be shopping around.

Are "lazy loyalists" letting your bank think it’s doing better than it really is with primacy? Very likely — but all isn’t even the bliss you think there is, going by Accenture’s research.

Consumers in its international sample hold accounts with an average of two banks and two digital wallets, including the services of challenger providers. The industry’s broad emphasis on digitization has created the perception of a "sea of sameness," favoring lazy loyalty.

Bankers may aspire to primacy, but their customers don’t see much benefit in it, and it’s easier than ever for people to obtain financial services from anyone and anywhere. And the more they spread their business, the less likely they are to be advocates to others for institutions that want to be the center of their financial universe.

"The message is clear: Banks can no longer take their customers for granted. Loyalty, once steadfast, is now as fragile as a fading romance," the firm says in its study.

The implications: Institutions that want real primacy have to earn it. How? They have to rethink their approach to consumer banking, including dropping not only the term "cross-selling," but the traditional nature of the concept.

In an interview with The Financial Brand, Abbott discussed changes he sees as essential to banking’s way of serving consumers, to trim the population of "lazy loyalists" and create customers happy enough to promote their provider to others.

"Lazy loyalists are loyal enough, but they’re not really loyalists at all," says Abbott, "because they’re willing to cheat on their bank with other providers."

Shift to Awarding Incentives and Away from Promoting Rates and Fees

Accenture believes bankers put too much emphasis on traditional pricing these days, competing on rates and fees.

"Make no mistake, interest rates matter — 80% of customers say they are an important factor when selecting a bank," the report says. "However, after they make their initial choice, many customers do not actively track the rates they pay or earn."[Emphasis added.]

Two key findings in the pricing area from the study:

First, over half — 53% — of consumers surveyed don’t know what their financial provider is paying on savings. For most, a competitor would have to pay nearly three percentage points more before they’d move accounts. Further, rates play only a small part in how readily a consumer will advocate for their bank.

Second, in spite of the rhetoric that has come out of Washington in recent years, the study found that while fees may be a deciding factor up front, once the consumer is aboard only one in ten customers of traditional banks express unhappiness with their provider’s fees.

Bottom line: "Rates and fees are not long-term differentiators. Competing on price alone is unsustainable."

"We found that once people have chosen a bank, they stay with the bank because of service, rewards, recognition, and, overall, how you treat them," says Abbott.

"Most banks are just product engines pushing them out to customers without regard to the value they’re bringing."

— Michael Abbott, Accenture

Abbott says banks can hold onto customers, make them happier, and gain advocacy by thinking more like airlines with their frequent flier rewards programs.

Some examples:

• Fit rewards to consumers’ daily experiences, such as discounts on purchases they commonly make, like coffee on the morning commute.

• Reward positive behavior, such as hitting savings goals — more deposits for your bank.

• Devise rewards that recognize broader relationships with the bank.

"Airlines have known this for years, but for some reason less than 15% of banks offer any form of relationship-based rewards," Accenture says in the report, citing earlier research.

The rest of the banks, Abbott says, "are just product engines pushing them out to customers without regard to the value they’re bringing."

"The approach should reward behavior automatically through acknowledgement of business you’ve brought to the bank, making it easy to choose the next thing you want to do, and move that money around accordingly," says Abbott.

One kicker about rate that banks should consider even when prospecting for new customers: Find a middle way.

"If you move the pendulum too far to the cheap side, you don’t get organic growth," says Abbott. "But if you go too far on the other side, you end up at the top of Bankrate.com. That’s the most dangerous place in the world to be, because that means you’re giving it all away."

Read more: For This Bank, Branches Are Key to Defending Primacy (and Its Regional Market)