(27 May 2024 – Global) A new report by East & Partners reveals a best of breed experience can lead to large corporates moving up to two thirds of their business to a new banking provider.
The 2024 Global Insight Report, titled “Selling Banks to the Corporate Treasurer” reveals, Corporate Treasurers, emerging as the new overall owner of the banking relationships, are willing to transition a staggering 69% on average of their transaction banking wallet to new providers for a top-tier experience.
East & Partners’ Global Head of Market Analysis, Martin Smith, emphasized, “When a Top 100 corporate looks to make a move from their incumbent, the percent of their wallet moving lies within a tight band when looked at either by market or incumbent primary bank.”
The readiness to switch banking provider varies significantly by region. The research found large corporates based in Hong Kong (81 percent) and Australia (78 percent) much more willing to move their business to a new transaction bank relative to Singapore corporates (62 percent). Similarly, US corporates are more willing to jump ship than their Canadian counterparts at 78 percent and 55 percent, respectively. While British treasurers are clearly standing on a “burning platform”, ready to transfer almost the entirety (90 percent) of their transaction banking wallet to a new provider compared to relatively content German corporates that display a significantly lower interest in banking away from their current provider (45 percent).
A key early gauge of customer churn is the percentage of transaction banking wallet that treasurers are willing to shift to a new provider for a best of breed experience. JPMorgan, Citi and HSBC clients are prepared to switch three quarters of their business to a new provider that makes a compelling proposition to them and can then actually deliver on that proposition. Conversely, Deutsche (44 percent), Standard Chartered (51 percent) and BofA (52 percent) clients are the most hesitant to relinquish transaction banking business to a new provider, reflecting a stronger customer retention imperative by these banks. Winning transaction banking business away from DB, SCB and BofA is infinitely more difficult than JPMorgan, Citi and HSBC who are clearly “stretched thin”.
