Earlier this month, Nomis did a survey of 500 banking customers who applied for and were approved for personal, home equity, and cash-out mortgage refinance loans. We are currently distilling the results for inclusion in an upcoming e-book, but preliminary results give us insight into how banks can best serve their existing customers.

These results show that existing customers want to remain with their banks, and as long as the bank offers a convenient way to apply for loans and offers competitive rates, customers will remain. In an environment with reduced lending activity, virtually zero deposit rates, and an abysmal economy, attracting new customers may prove difficult. However, those same conditions present an opportunity to cement relationships with existing customers.


In our survey sample, fully half of the borrowers could be described as looking to shore up their personal balance sheets. Although only 5.4% of respondents directly said their borrowing was “due to COVID-19”, another 45% of respondents said it was for building a rainy-day fund or for short-term immediate needs. 60% of respondents applied for their loans in 2020. Moreover, since COVID-19 was not a major concern in the US until March and 78% of respondents applied for their loans prior to March, we suspect that a good chunk of personal lending in the past few months has been driven by COVID-19. In times of crisis, customers turn to their banks for financing, whether through personal loans, cash-out refinances, or home-equity loans.

Nearly half of borrowers preferred to apply for a loan by filling out a form on their banks’ websites. Perhaps more surprising, among 10 alternatives presented, the next highest preference was to visit their banks’ local branches. Of course, with COVID-19 restrictions in place, many branches remain closed or are open for limited services only. Nevertheless, while banks may be tempted to cut costs by reducing their branch networks, they need to remain cognizant of the fact that for many potential borrowers a visit to a local branch remains their preferred method of application. Bankers should pay careful attention to the demographic and economic trends in an area before closing a branch, as that could limit their ability to service older, possibly more profitable, or safer borrowers.

Among survey respondents, two-thirds of them applied for a loan only with their primary bank, and another 27% applied only to their primary bank or one other lender. Whether because customers find doing business with their existing banks more convenient or just through force of habit, customers are willing to deepen their relationships with their banks. Given the uncertainty surrounding the current economic environment and the difficulty in recruiting new customers, banks can leverage existing customers to grow loan portfolios, whether through personal lending or mortgage refinancing. As our survey shows, customers prefer to do business with their existing banks.

Finally, despite customers’ affinity for their own banks, many of them remain price sensitive. Our survey asked whether respondents agreed with the following statement: “I would switch from my primary bank if it is more expensive than other lenders.” One-in-four respondents strongly agreed with that statement, and an additional 44% agreed with it. Your existing customers are willing to do more business with you, but the opportunity to charge higher fees or rates appears limited.

To sum up, COVID-19 may represent a unique opportunity for banks to expand existing relationships. Customers want to build cash reserves, whether via personal loans or cash-out mortgage refinances. Moreover, potential borrowers look to their existing banks for such loans. As long as pricing is fair, banks are in a position to help their existing clients and increase profits at the same time.