Europe's banks and insurers believe that consumer apathy is the main reason customers stick with them, and that the cost of improving services to increase loyalty is likely to force mergers and takeovers.

A survey by the Chartered Institute of Bankers found that over half of Europe's banks, and 60 per cent of insurers expected mergers and takeovers to be sparked by the cost of changing businesses to take advantage of customer databases.

The survey was carried out on behalf of Accenture, the consultants, and Siebel, the CRM vendor. Almost all the companies surveyed believed CRM, or the use of computer databases to develop and target products to small groups of customers, was the way to increase loyalty. In every country surveyed, the banks believed the inconvenience of moving was the single most important reason for retaining customers.

"It is dangerous for banks to rely on inconvenience in an information age where both the financial press and the web make it so easy for customers to see where they can get a better deal," says Simon Jenkins, an Accenture partner.

As a result, more than 60 per cent of UK banks and a quarter of euro-zone banks believe they need to devote more resources to CRM systems. The need to invest large amounts could spark mergers as banks and insurers try to share costs.

Mr Jenkins says that British banks were further ahead in developing CRM systems than their European counterparts, so their belief that they needed to invest more could be a reflection of early disappointment.

The survey also found that German banks had the smallest proportion of profitable customers, with only a quarter making money for the bank. Half were described as unprofitable, far higher than the 5 per cent in France and Italy and the 22 per cent in Britain.