fear of finance

If you have always suspected that your bank - or your building society, credit card provider or insurance company - does not value your custom, your suspicions may soon be confirmed. Financial service providers, faced with an increasingly disloyal customer base, are struggling to identify their best customers as a first step to positive action to try and retain them.

Research shows that it costs at least four times as much to win a new customer as it does to retain on old one, so financial services providers are aware as never before that customers they used to take for granted must be assessed. If they fit the profile of a valuable customer, they must be cossetted and cajoled with improved services and, where appropriate, with financial incentives to stop them looking elsewhere.

Banks already get indirect evidence of customers preparing to defect. Warning signs include people who stop paying in their monthly salaries and reduce the number of cheques they write and the standing orders they authorise.

In some cases, of course, the banks may not care about these early warnings. Current accounts are not necessarily all that profitable unless customers continually overdraw by small amounts and trigger the full range of penalty charges the banks can levy against them.

But if you send the coded warnings through your account, and you are considered wealthy or active enough to represent real selling opportunities, these days the bank is likely to write to you or phone, to inquire whether you are unhappy and if so why, and whether you might like a premier banking service. Barclays recently introduced one, called Additions, and Natwest is expected to launch one shortly.

Good customers are also potential buyers of financial products, if they can be correctly identified and targeted. The banks have always had access to a great deal of information about their customers simply by interpreting bank statements, but they did not seem to be able to co-ordinate information on current account usage with the number of financial products, from mortgages and insurance policies to PEPS and pension plans, which individual customers owned.

New systems now offered to banks by specialist firms like the London- based Customer Value Company will enable banks to co-ordinate information and draw up profiles of customers most likely to buy more products.

Credit card companies are also suffering a sharp increase in customer disloyalty, as cardholders are attracted to new cards offering cheaper rates, higher borrowing limits, lower annual fees and rewards for using cards more frequently. Established card companies increasingly write to customers whose cards show signs of going dormant reminding them of the card's advantages and offering them higher spending limits.

Insurance companies are increasingly affected by the loss of renewal business which they used to take for granted. Renewal premiums in most cases have been reduced substantially during the past two or three years in a conscious effort to retain loyal customers with good claims records.

Premiums are now showing distinct signs of turning up again, but insurers may well have to offer discounts for early renewals in the hope of retaining good business. No-claims bonuses, traditional in the motor insurance business, are becoming increasingly common on household buildings and contents insurance in an attempt to retain good customers.

If you feel you have been a loyal customer of many years standing however, and have not claimed back more than you have paid in premiums, you must consider the possibility that you are being taken for granted, and the time has now come for you to shop around.

Clifford German

News
peopleFrankie Boyle responds to referendum result in characteristically offensive style
Arts and Entertainment
'New Tricks' star Dennis Waterman is departing from the show after he completes filming on two more episodes
tvHe is only remaining member of original cast
Arts and Entertainment
tvHighs and lows of the cast's careers since 2004
News
news
PROMOTED VIDEO
Have you tried new the Independent Digital Edition apps?
New Articles
i100
Life and Style
Couples have been having sex less in 2014, according to a new survey
life
Arts and Entertainment
musicBiographer Hunter Davies has collected nearly a hundred original manuscripts
Finacial products from our partners
Property search

Scottish independence: How will kilt-edged stocks fare?

Scottish companies were caned when the separatists surged in the polls. Is this the future, asks Simon Read, and would they be any better together?

Two million first-time buyers are locked out

The drought in lending to people with low deposits has created legions of frustrated buyers, writes Emma Lunn

Leaving money to charity in your will could help reduce the tax bill for your loved ones

Next week has been designated "remember a charity in your will week", to put the focus squarely on the subject
Money is slipping through our fingers: the UK is falling behind other countries in the amount we put away

How to save money: UK is crashing down the European league table for putting money away

The UK has slipped to 11th in the latest European league table of savers. Rob Griffin checks out the best options

Energy firms found guilty of bad practice could have licences revoked under Labour government

Caroline Flint, the shadow energy secretary, says a Labour government would create a new energy regulator

A student's guide to financial survival: You don't have to drown in debt at university

Fresh from A-level delight, the moment does not have to be soured by students resigning themselves to thousands of pounds worth of debt in three years' time. Rob Griffin sees how to pass the university challenge

'Dismal' eurozone data sparks concerns

European Central Bank chief Mario Draghi is under pressure to launch promised stimulus before the EU slides further
Love but not marriage: property is one area where cohabiting couples are in danger of losing out

How couples can protect their financial interests when cohabiting

People who simply live together cannot assume they have the same rights to each other's assets as spouses or civil partners. Michelle McGagh sees how they can protect their financial interests
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

ES Rentals

    iJobs Job Widget
    iJobs Money & Business

    Senior BA - Motor and Home Insurance

    £400 - £450 Per Day: Clearwater People Solutions Ltd: **URGENT CONTRACT ROLE**...

    Market Risk & Control Manager

    Up to £100k or £450p/d: Saxton Leigh: My client is a leading commodities tradi...

    SQL Developer - Watford/NW London - £320 - £330 p/d - 6 months

    £320 - £330 per day: Ashdown Group: The Ashdown Group have been engaged by a l...

    Head of Audit

    To £75,000 + Pension + Benefits + Bonus: Saxton Leigh: My client is looking f...

    Day In a Page

    Scottish referendum: The Yes vote was the love that dared speak its name, but it was not to be

    Despite the result, this is the end of the status quo

    Boyd Tonkin on the fall-out from the Scottish referendum
    Manolo Blahnik: The high priest of heels talks flats, Englishness, and why he loves Mary Beard

    Manolo Blahnik: Flats, Englishness, and Mary Beard

    The shoe designer who has been dubbed 'the patron saint of the stiletto'
    The Beatles biographer reveals exclusive original manuscripts of some of the best pop songs ever written

    Scrambled eggs and LSD

    Behind The Beatles' lyrics - thanks to Hunter Davis's original manuscript copies
    'Normcore' fashion: Blending in is the new standing out in latest catwalk non-trend

    'Normcore': Blending in is the new standing out

    Just when fashion was in grave danger of running out of trends, it only went and invented the non-trend. Rebecca Gonsalves investigates
    Dance’s new leading ladies fight back: How female vocalists are now writing their own hits

    New leading ladies of dance fight back

    How female vocalists are now writing their own hits
    Mystery of the Ground Zero wedding photo

    A shot in the dark

    Mystery of the wedding photo from Ground Zero
    His life, the universe and everything

    His life, the universe and everything

    New biography sheds light on comic genius of Douglas Adams
    Save us from small screen superheroes

    Save us from small screen superheroes

    Shows like Agents of S.H.I.E.L.D are little more than marketing tools
    Reach for the skies

    Reach for the skies

    From pools to football pitches, rooftop living is looking up
    These are the 12 best hotel spas in the UK

    12 best hotel spas in the UK

    Some hotels go all out on facilities; others stand out for the sheer quality of treatments
    These Iranian-controlled Shia militias used to specialise in killing American soldiers. Now they are fighting Isis, backed up by US airstrikes

    Widespread fear of Isis is producing strange bedfellows

    Iranian-controlled Shia militias that used to kill American soldiers are now fighting Isis, helped by US airstrikes
    Topshop goes part Athena poster, part last spring Prada

    Topshop goes part Athena poster, part last spring Prada

    Shoppers don't come to Topshop for the unique
    How to make a Lego masterpiece

    How to make a Lego masterpiece

    Toy breaks out of the nursery and heads for the gallery
    Meet the ‘Endies’ – city dwellers who are too poor to have fun

    Meet the ‘Endies’ – city dwellers who are too poor to have fun

    Urbanites are cursed with an acronym pointing to Employed but No Disposable Income or Savings
    Paisley’s decision to make peace with IRA enemies might remind the Arabs of Sadat

    Ian Paisley’s decision to make peace with his IRA enemies

    His Save Ulster from Sodomy campaign would surely have been supported by many a Sunni imam