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What corporate customers won’t tell their banks

Satisfied but might not recommend to business network – this sums up the relationship that corporate treasurers and chief financial officers (CFOs) have with their main relationship banks in key Asian markets. According to research just released by East and Partners, corporates in Asia say they're moderately satisfied with their transaction banks – but not enough to recommend those banks to their business network.

Sangiita Yoong, East and Partners analyst, believes that the link between customer satisfaction and advocacy seems to be disconnected. She commented: “Passive customers should be a concern for the financial institutions as indifference is often tied to loyalty (or lack thereof). And, at a time when propensity to change primary transaction bank is the highest in a decade, banks cannot afford to be complacent.”

The specialist transaction banking market research and consulting firm spoke to 941 CFOs and corporate treasurers from the 1,000 biggest companies in 10 of Asia's key markets, including China, India, Hong Kong and Indonesia. The research noted that treasury and financial executives in big corporates are more likely to recommend their secondary banks, rather than their main transaction bank. This is counter-intuitive but East and Partners, which specialises in researching the business, corporate and investment banking markets of Asia Pacific, suggests that the reason could be that “secondary providers are often seen to be 'working harder' to gain additional wallet share inside the customer”.

The research also ranked banks operating in Asia according to how likely their corporate customers are to recommend them to their peers, using a scale where 0 is not at all likely to recommend, and 10 is extremely likely to recommend. The graph below shows that, while the average level of advocacy for primary transaction banking providers in Asia stood at 6.48 (which East and Partners describes as mediocre), six banks scored higher than this. The research stated that “international banks are dominating the ranking for advocacy with Standard Chartered at the top (7.49), followed by Deutsche (7.11), Citigroup (7.02), JP Morgan (7.00) and HSBC (6.93). By contrast, regional banks including DBS, CIMB and ANZ have lower levels of advocacy notwithstanding achieving relatively high levels of customer satisfaction.”

“By moving customers into deeper and more meaningful relationships at the advocacy level, financial institutions can accelerate organic growth. We know corporates in Asia prefer to rely on word of mouth and referrals as their critical source of advice, as compared with press, journal or even their incumbent bankers” said Yoong.

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Bank Relationship Management & KYC
Evaluating Banks' Overall Performance

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