Clients Stay with One Bank for an Average of Seven Years, Twice as Short as 25 Years Ago

In the European Union, from 2008 to 2022, the number of employees in ‘traditional’ banking jobs decreased by about 22 percent, while at the same time, the number of new hires in the banking IT sector grew by an average of 8 percent annually, a result of the accelerated digital transformation that all industries, including banking, are undergoing.

This was shown by a study conducted by the international consulting firm Horváth, which involved more than 50 experts, scientists, and managers from the banking sector. The aim of the study was to identify the key challenges that banks face in the process of digital transformation, with participants citing, among other things, the rapid development of technology, increased demand for sustainable products, and a shortage of staff, particularly the declining interest of younger generations in working in the banking sector.

– When we talk about human resources, we identified two key challenges: the ongoing shortage of personnel and experts, which will continue to worsen in the banking sector, and the increasing expectations from existing employees. It is essential to systematically educate current employees about new technologies, as a quality digital customer experience becomes a competitive advantage. Banks need to invest further in solutions that will meet customer needs, and by developing attractive and innovative products, they will also attract talented employees – stated Robert Ćuzela Piljac from the consulting firm Horváth.

According to the research by the consulting firm Horváth, about 40 percent of clients in ‘traditional’ banking currently use at least one product from FinTech companies. They also highlighted data from a study in Germany, which indicates that the average period a client remains in a contractual relationship with a bank is seven years, while in 2000, this period averaged 14 years.

Trends show that the number of clients who increasingly choose to communicate with their bank digitally rather than visiting branches for specific services is significantly rising, with more than 60 percent of respondents recognizing the importance of digitalization in the banking sector. They noted that between 2018 and 2023, 34 percent of all processes in banks were automated, and they see the use of artificial intelligence as a key tool in improving banking services.

As advantages of the banking sector, respondents highlighted trust, reliability, and tradition.