Retail banks need to collaborate with the competition and personalise the customer experience says the latest World Retail Banking Report 2018 (WRBR 2018) launched today from Capgemini and Efma. In addition to traditional challenges, retail banks globally are now facing high-impact new forms of competition: the open banking ecosystem, emerging technologies, and soaring customer expectations.
The report finds that:
Satisfaction is low: Barely half of customers say their experience across different bank channels was positive (51.1 percent in branch, 46.9 percent on mobile and 51.7 percent on internet banking), despite continued bank investment.
Consumers are open to BigTech: Nearly a third of customers (32.3 percent) might consider BigTechs for financial products and services (that includes 43.0 percent of Gen Y respondents, 53.0 percent of tech-savvy consumers and 70.2 percent of those already likely to switch their primary provider). Personalisation is key: Satisfaction was notably higher among those customers who had been offered personalized digital experiences proactively (49.1 percent) than those who had not (39.5 percent).
The report also surveyed banking executives about the main causes of industry disruption. The most-cited factor was rising customer expectations, with nearly three out of four executives (70.8 percent) stating that positive experiences in other sectors mean customers now expect more from their banking provider. A majority of executives (58.3 percent) also said that regulatory pressure was a cause of disruption, while 54.2 percent identified the increasing demand for digital channels as a factor. As lines between traditionally different industries now start to blur, banks now face increasing competition from non-traditional firms who are targeting niche areas of the banking value chain, Also, increasing digitization and explosion of new technologies are rapidly changing the banks’ ways of working.
Anirban Bose, CEO of Capgemini’s Financial Services Strategic Business Unit said: “With FinTechs, BigTechs, and other non-FS firms finding their place in the market, retail banking today is all about the customer experience when interacting with their financial institution. As a new, open ecosystem - comprised of customers, traditional banks, non-traditional firms, regulators, and developers - takes shape, there is now a clear opportunity for banks to leverage digital transformation to retain customer relationships by re-inventing the customer journey and creating new revenue streams.”