Corporates stick with their banks
(2 March 2009 – Australia) Corporates are sticking with their transaction bank and looking for a secure relationship, according to the most recent edition of East & Partners’ Corporate Transaction Banking Markets Report.
The latest report shows that more businesses, with a turnover between A$20 and A$340 million, have decided to stay with their current transaction bank compared with recent years.
In February 2009, 45.9 percent of corporates changed their primary bank in at least one key transaction banking product. This is a significant 20 percent lower rate of churn compared to six months previous.
East & Partners’ financial markets analyst, Peter Drennan, said "the dynamics of transaction banking churn has changed significantly over the last six months clearly reflecting the current uncertain financial environment.
"Not only is there much less product switching, but the reasons for churn have also changed dramatically", Drennan added.
Previously, customer support and performance have been the cornerstone of banking relationships. The impact of the global financial crisis means that security and flexibility have taken over as the key to sealing a banking relationship.
Despite the reduction in churn, newly acquired St George has seen its churn levels in transaction banking move up from its usual zero mark, to 1.3 percent.
"While St George is still far and away the best performer in terms of churn, the changing banking industry is clearly having an effect on them", Drennan said.
In February 2009, 45.9 percent of corporates changed their primary bank in at least one key transaction banking product. This is a significant 20 percent lower rate of churn compared to six months previous.
East & Partners’ financial markets analyst, Peter Drennan, said "the dynamics of transaction banking churn has changed significantly over the last six months clearly reflecting the current uncertain financial environment.
"Not only is there much less product switching, but the reasons for churn have also changed dramatically", Drennan added.
Previously, customer support and performance have been the cornerstone of banking relationships. The impact of the global financial crisis means that security and flexibility have taken over as the key to sealing a banking relationship.
Despite the reduction in churn, newly acquired St George has seen its churn levels in transaction banking move up from its usual zero mark, to 1.3 percent.
"While St George is still far and away the best performer in terms of churn, the changing banking industry is clearly having an effect on them", Drennan said.
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