Top Asian Companies Intend to Change Primary Banking Relationship

Asia’s top 1000 institutions are increasingly on the move, with more than six percent – or more than 60 leading companies - indicating they intend to change their primary banking relationship in the next six months, according to East & Partners.


In addition to those institutions definitely planning a banking change, the number of those indicating they would “probably” or “possibly” change was also on the rise, with the number of restless customers at 42.7 percent in research conducted in November 2012, up from 37.9 percent in the previous research round in May 2012.


The East research shows that debt offerings are the most common reason for bank churn, nominated by 83 percent of Institutions, while 67.3 percent indicated that a lack of value in the relationship was the second most important churn driver. Value for money was ranked as the third reason.


Lachlan Colquhoun, Head of Markets Analysis at East & Partners, said the firm’s research on product importance and customer satisfaction showed wide gaps between expectation and delivery, gaps which were driving churn.


“We see that to drive growth, debt is the most important tool for the institutions, and yet this is the main factor driving them to change banks,” says Colquhoun.“This restlessness is also the reason we see Institutions spread their wallet among several providers, as a way of managing their own risk in their exposure to debt providers.”


The research shows that the wallet share for primary transaction banking relationships is in a steady decline, while that for secondary relationships is rising across the board.


“This, of course, presents opportunities for banks as secondary providers as these secondary relationships can often develop into primary relationships if the banks can prove themselves to the client,” says Colquhoun.


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