A recent Accenture (NYSE:ACN) survey of investment bank clients in the US and UK found that 96 percent of clients are generally satisfied and would recommend their bank to others. Despite the turmoil in the industry, only one-third (33 percent) have changed their primary bank since the financial crisis.
“Investment bank clients have remained loyal to their primary banks since the financial crisis,” said Dean Jayson, research author and managing director of Accenture’s Capital Markets Industry Practice for Europe, Africa and Latin America. “But our research shows they are shifting their focus back to basics – looking for simple products and trading services, and increasingly demanding higher quality service and lower fees.”
The survey of 100 corporate and asset/fund managers found that clients would be willing to switch banks if another provider had substantially better offerings in risk management (60 percent) and trading services (43 percent), even if they had to pay a premium. Eighty-one percent of clients said they would pay a premium for risk management services; 65 percent of asset or fund managers and 84 percent of corporate clients would also pay a premium for better trading tools/services.
According to the research, clients claim the top two factors they consider when choosing an investment bank are price (65 percent) and research provided (52 percent), and the most common reasons cited for switching banks are because of more competitive pricing and better quality of products. Nearly one in five clients (19 percent) report noticing a change in their bank’s strategy since 2008 that negatively impacted them, such as increased fees and less research produced.
“Profitability pressures will continue to drive fee increases and impact the research services provided by investment banks until the banks are able to significantly reduce their high fixed costs,” continued Jayson. “Digital technologies can be used to simplify their operations, providing banks with a platform to achieve sustainable competitive advantage. Digital capabilities such as analytics, collaboration tools and cloud technology can help banks meet client demands while remaining price competitive, and provide a differentiated experience.”