What Banks Could Learn From Tesco

The fact that Tesco is seeing a doubling of customer deposits in recent months as distrusting consumers move away from the troubled banking sector highlights how banks need to go back to basics to retain their customers. A closer examination of why consumers are putting their financial trust in Tesco would probably reveal that, animosity  toward the banks aside,  Tesco is a brand they feel they have a more personal relationship with. In addition to rebuilding trust, fostering a one-to-one  relationship with each customer is something banks should now be focusing on.

Of course, building one-to-one relationships can’t come at the expense of profitability, especially in the current climate. Ideally, every decision a bank makes with regard to a customer should cater to that individual’s specific needs but do so in a manner that ensures the profitability of the account. Gaining full understanding of each customer as an individual, including their likely behaviour, and applying that to every interaction  is not only critical for differentiation and loyalty in these challenging times, but it may be the key to survival amid increasing competition.