Baringa retail banking survey: legacy tech, lost loyalty
15 September 2025
More than 1/3 customers switched banks in the last five years. So, are banks really delivering digital experiences that customers want and need? Our research suggests that they aren’t – and technology is a large part of what’s holding them back.
Traditional banks are failing to meet customer digital expectations, with technology constraints undermining transformation efforts. Baringa’s retail banking survey of 4,000 banking customers and 400 executives across the UK and US reveals a critical disconnect between customers’ needs and operational capabilities.
More than one-third of customers switched banks in the last five years – prioritizing better digital experiences rather than competitive rates – while 68% of banking executives admit their technology architecture actively hinders them from serving customers effectively.
Banks are investing heavily in digital transformation and personalization initiatives, yet legacy technology systems continue to sabotage these efforts. Our research shows that the gap between customer expectations and banks’ operational capabilities is widening. This creates significant competitive vulnerability as digital-native competitors reshape customer expectations and threaten traditional banks’ market position.
The stakes couldn’t be higher. Banks face a stark choice: transform their technological foundations or watch customer loyalty erode. Our research suggests three critical steps to help banks regain a winning position with customers and reclaim leadership in a rapidly-evolving market.
What leaders need to know
The stats speak volumes — and they’re speaking to you.
Customers are having increasingly transactional interactions with their banks. People use their debit cards, pay bills, and check account balances without feeling the slightest emotional connection to the brand behind these services. The less engaged customers feel, the more interchangeable banks become. It’s left institutions vulnerable in an age where changing banking providers is as simple as a few taps on a smartphone.
Banks must make a fundamental shift, from serving customers to genuinely engaging them. True customer loyalty manifests in meaningful interactions that go beyond the obligatory monthly account check. When customers regularly engage with a bank’s platforms – because they want to, not because they have to – firms have unlocked the secret to sustainable growth. In other words:
- Loyalty pays. It costs more to acquire new customers than it does to retain current ones. On average, it costs retail banks $200-300 to acquire a single new customer, while retention efforts cost just $25-35 per customer annually. Loyal customers also tend to stay with a bank longer and spend more overtime, boosting customer lifetime value.
- Loyalty is a differentiator. Offering seamless experiences can make your brand stand out, encourage customers to use more of your products and services, and in turn drive financial success. Banks excelling in personalized digital experiences see up to 25% higher customer retention rates and a 20% increase in cross-selling success for digital offerings.
Banks do understand the compounding value of customer engagement, but their execution isn’t moving the needle. Despite investment in the right strategic priorities, customers are still underserved. In our view, digital and core banking infrastructure is the bottleneck preventing banks from delivering the seamless experiences that drive customer lifetime value and sustainable competitive advantage.
Customers have high expectations, and banks are falling short
Today’s customers want it all – great products, rewards, digital experiences, service, and security. Given the high switching rate, it’s clear that banks aren’t living up to these expectations.
Our survey showed that over one-third of respondents changed their banking providers in the last five years.
What’s motivating customers to make these moves? While the reasons for changing banks vary from customer to customer, some common threads emerge from the data – which also reveal a shift in customer needs and values over the years.
What do 4,000 customers and 400 banking executives reveal about the future of loyalty? Enter your details below to access the full insights and practical next steps.
Unlock the report and read on for:
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Five converging trends reshaping customer expectations, from accelerated digitalization and generational shifts to rising demand for ethical banking and 24/7 convenience, customers now expect seamless, personalized digital experiences as standard.
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Why legacy tech is sabotaging loyalty, over two-thirds of banking executives admit their current technology architecture hinders customer service, with outdated systems consuming budgets and slowing innovation.
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Three strategic steps to rebuild customer connection, Baringa outlines a transformation framework: clarify your business differential, forge a modern digital spine through build-buy-integrate, and embrace continuous change across culture and operations.
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The commercial case for action, banks that invest in mobile-first, personalized experiences see higher retention, cross-sell success, and ROI, while those that delay risk customer attrition, regulatory scrutiny, and rising IT costs.
About the research
The findings of Baringa’s retail banking report are based on two separate surveys, with banking customers and executives from United States and United Kingdom.
The first survey took place from March to April 2025 with 4,000 customers, who answered 20 questions about their banking experiences and what they are looking for in a bank. We targeted a balanced representation of customers in terms of age, gender, and income.
The second survey, carried out from March to April 2025, involved 400 senior banking executives in banks with $500m+ revenue and AUM. The aim was to understand their primary focus areas, challenges and risks, particularly around customer engagement and technology.
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