Customer service an important factor for banks in a crowded market
Latest World Banking Report finds banks struggling to meet customer expectations but collaboration with new players may be key.
Latest World Banking Report finds banks struggling to meet customer expectations but collaboration with new players may be key.
Banks are lagging behind in customer expectations and failing to adopt new technology-led initiatives, according to the World Retail Banking Report 2019.
According to the report by Capgemini, only 33% of banking executives say they have implemented open banking effectively, while in contrast, 75% of tech-savvy customers use Big-Tech financial products.
Furthermore, 72% of millennial’s consider mobile apps an important financial service, but only 33% report having a positive experience. This is compounded by the fact that less than a third of customers think their bank offers a variety of financial apps or timely and relevant product recommendations.
Banks are providing a higher positive experience in older more mature channels like at the branch or through online banking, but they need to translate their positive experience to newer channels like mobile banking and chatbots or voice assistants.
Anirban Bose, CEO of Capgemini’s Financial Services Strategic Business Unit and Group Executive Board member, added that “in the era of rising consumer expectations, banks are challenged to offer their customers a consistent engaging experience across all channels – branch, web and mobile”.
Of customers likely to switch, 80% use payments, cards, or other banking account products from traditional banks. The top reasons for switching include lower cost, ease of use and faster service.
Mortgage services and problem resolution have the highest friction with 69.3% and 63.7% of customers reporting having a low positive experience. There is lower friction but also lower positive experience in early process services like account opening.
The report calls for banks to seek partnerships with the non-traditional firms. It stated, “Banks need to approach the shared marketplace seeking partnerships, rather than focusing on their own siloed and internal innovation.”
“Banks that identify their top capabilities and then seek partnerships with FinTechs and other business sectors to enhance their offerings in other areas will be the most successful,” Bose added.
Further integration and partnership between banks and non-traditional firms may lead to an ‘Open X’ scenario for financial services, in which the banking industry is characterized by more effective and open collaboration. This would allow banking services to be seamlessly integrated into digital services.
Vincent Bastid, Secretary General of Efma stated: “Even though open banking adoption has been somewhat slow, it and its evolution to Open X, are the best ways forward for banks to compete in the increasingly crowded and diverse financial services landscape.
“Open X is how banks will provide customer experience in the future. Not preparing for it now will result in missed opportunities and lower market share.”