The Loyalty Problem Banks Can't Ignore

Saudi Arabia's retail banking market is booming — but with opportunity comes intense competition. The country's ambitious Vision 2030 program is driving innovation across the financial sector, creating a surge in mobile-first, AI-driven, and hyper-personalized banking experiences.

Yet, while innovation is abundant, marketing research in banking reveals that many banks still struggle to turn customers into loyal advocates. Customers may open accounts and use services, but without a deeper emotional connection, they remain vulnerable to switching when a competitor offers a better deal, a smoother digital experience, or a more compelling brand story.

Mapping Loyalty: Four Customer Segments

Recent loyalty segmentation in the Saudi retail banking sector uncovered four distinct groups:

1. Core Loyalists

Frequent users with high emotional engagement. They expect exclusive perks, inspiring brand values, and exceptional service.

2. Fringe Loyalists

Users with weaker emotional ties. They require trust-building, reassurance, and visible proof of value.

3. Potential Loyalists

Non-customers who align with the bank's values but have yet to engage. They need seamless onboarding and strong social proof.

4. Open/Unavailable

Customers loyal to other banks or disengaged from banking altogether. Winning them over requires clear differentiation and targeted outreach.

The Loyalty Gap: A Hidden Opportunity

Research into KSA's leading banks revealed a pattern: while up to 70% of customers engage with the brand in some form, only about 45% express strong emotional commitment.

That means nearly one-quarter of active users are at risk of leaving — a group that represents the biggest and most immediate opportunity for growth.

Why Awareness Doesn't Always Equal Loyalty

High brand visibility and trust are important but insufficient for long-term customer retention. The study found that customers often leave despite high awareness levels if operational performance or emotional engagement falls short.

In other words: A customer might trust you, but they won't stay if they don't feel connected to you.

Operational Excellence: The Loyalty Multiplier

Customers in KSA prioritize reliability, accessibility, and convenience. The most loyal customers consistently identified the following as loyalty drivers:

  • 24/7 availability (both digital and in-branch).

  • Low, transparent transaction fees.

  • Frictionless digital banking experiences.

Banks that combined operational excellence with emotional brand connection enjoyed higher advocacy and retention rates.

The Advocacy Gap: From Trust to Recommendation

The research also revealed that many customers feel safe with their bank but are not inspired to recommend it. This “advocacy gap” is a major barrier to organic growth.

Closing this gap requires:

  • Purpose-led brand messaging.

  • Customer recognition programs.

  • Exclusive offers for existing customers.

Product Breadth and Loyalty Retention

One strong predictor of loyalty was the number of products a customer used. Core Loyalists often had multiple services with their bank — from credit cards to savings accounts to investment services — while Fringe Loyalists typically had only one.

Customers with multi-product relationships:

  • Were significantly less likely to switch banks.

  • Actively recommended their bank to friends and family.

Tailoring Engagement to Loyalty Stages

The “one-size-fits-all” approach is outdated. Effective loyalty growth demands strategies tailored to each segment's needs:

  • Core Loyalists: Engage with personalized, emotion-rich campaigns and premium offers.

  • Fringe Loyalists: Build confidence with enhanced fraud protection and clear communication.

  • Potential Loyalists: Focus on seamless onboarding and digital-first marketing.

Strategic Recommendations for Banks

  1. Continuously measure loyalty through brand tracking and customer feedback.

  2. Prioritize operational performance alongside emotional engagement.

  3. Convert Fringe Loyalists first — they are the easiest to win over.

  4. Strengthen advocacy with rewards and recognition for loyal customers.

  5. Align media strategies with mindset, not just demographics.

Conclusion: The Future of Loyalty in KSA Banking

The Saudi retail banking market is young, digital-first, and rapidly evolving. Banks that understand and act on the emotional and operational drivers of loyalty will lead the market in both retention and advocacy.

By using a brand tracking survey, banks can pinpoint loyalty gaps, tailor engagement strategies, and turn partial believers into passionate advocates. The future belongs to banks that measure, understand, and actively grow loyalty — one customer relationship at a time.