Many people want a relationship with their financial institution, but most feel that they do not get what they want out of that relationship.
This is revealed in the latest survey on banking by audit company KPMG.
"The challenge facing banks is how to harness the knowledge that they have about their customers, turn it into value and master the relationship game."
Banks and other financial institutions know a lot about their customers from static data, (information from your home loan application, for example) as well as dynamic data, such as your transaction spending patterns on credit cards.
Most businesses would love to have this information about their customers., states the survey.
Yet banks do not use this information effectively.
The survey reveals that banks and financial services organisations do not necessarily make their money when you purchase products, but they make money based on how you use their products.
Banks learned many years ago it makes more sense to compete on products and service than on price.
This approach is likely to continue unless a large foreign bank is able to make an impact in the local retail banking arena and then decides to undercut rates.
The entry of a large foreign bank is unlikely to happen over the next year or two but the day is looming ever closer, states the survey.
The survey also reports that bank shares continued to outperform on the Johannesburg Stock Exchange (JSE). The bank index was up an impressive 40 percent during 1997 compared to a modest six percent rise in 1996.