According to the World Retail Banking Report (WRBR) published by Capgemini and Efma, retail banks struggle to offer a positive last-mile experience to customers, who require more complete and personalized banking services.
“In an age of rising consumer expectations, banks are called upon to offer their customers an engaging and consistent experience across all channels – branch, web and mobile – and to transform their Open Banking approach into an Open vision X, where banks and new non-traditional players collaborate to provide banking services capable of integrating with digital experiences,” he said Monia Ferrari, Financial Services Director of Capgemini Business Unit Italy. “Banks that identify their areas of excellence and seek partnerships with FinTechs and other business sectors to enhance their offerings will be the most successful ones.”
World Retail Banking Report 2019 identifies areas where banks are failing to meet customer expectations and steps to take to become banks inventiveness.
The main findings of the study are as follows:
- 75% of tech-savvy customers are currently using at least one financial product offered by a BigTech.
- The top three reasons customers use non-traditional financial products are lower costs (70%), ease of use (68%) and faster service (54%).
- More than 80% of customers considering switching their primary bank in the next 12 months already use payments, cards or bank accounts offered by BigTech and challenger banks, or will do so in the next 3 years.
- Adoption of Open Banking has been slow, with only 33% of bank executives saying they have actually implemented it.
- Open Banking is evolving into Open X, with banks and new non-traditional players collaborating to provide banking services that integrate with digital experiences from other areas of customers' lives.
The report also recommends that banks convert to inventive bank, through collaboration with FinTechs, so as to become efficient and expert service providers in the Open X era. Banks must strategically select partners able to complete the product portfolio, improve service delivery and increase sales , adopting a collaborative approach with them. By leveraging effective collaboration while maximizing traditional strengths, banks can gain a major advantage in the Open X era.
“Although the adoption of Open Banking has been quite slow, this system and its evolution into Open X is the best way for banks to compete in the increasingly crowded and diverse financial services landscape,” he said. Vincent Bastid, Secretary General of Efma. “Open X represents how banks will deliver customer experience in the future, and lack of preparation will result in missed opportunities and reduced market share.”
Una customer experience poor can make lose opopportunity to profit
Customers report the poor quality of many banking interactions, citing mortgage and loan applications and issue resolution as the top friction points (69,3% for mortgage applications and 63,7% for issue resolution) and negative experiences (37,7% in the first case and 40,3% in the second). Customers stated that the first stages of interaction with a bank - opening a current account and requesting information - are less difficult but at the same time not very positive, probably due to the lack of omnichannel solutions. For example, a majority of Gen Y customers (71,9%) consider mobile apps to be an important banking channel, yet only 32,9% believe they have had a positive experience with this channel. Furthermore, the report shows that a poor customer experience, starting from the first contacts up to the most complex transactions, especially in the last-mile, can lead to the loss of profit opportunities and requires the creation of a solid omnichannel strategy.
Banks can improve the experience last-mile healing well-being endsoverall customer list
According to the report, banks are failing to deliver the same kind of customer experience offered by BigTechs and FinTechs. They can no longer ignore the expectations of younger generations and tech-savvy customers – less than a third of customers believe their bank offers a variety of helpful financial apps or timely, relevant product recommendations. While banks are offering increasingly positive experiences on more traditional channels, such as branches and websites, the study states that there is a need to ensure a higher quality customer experience in increasingly popular digital channels, such as mobile and chatbots / voice assistants. The areas related to payments, cards and bank current accounts are those most exposed to the risk of losing customers to innovative and non-traditional players, who prioritize the most critical points for customers. The WRBR points out that banks can address these challenges by focusing on the customer's overall financial well-being, rather than on individual product offerings.
With the creation & of a strong one collaboration, banks can achieve Open X
Open Banking helps businesses create a more integrated and seamless customer experience, which will be a key element in retaining and satisfying customers. However, as Open Banking has struggled to catch on, the report says it will be crucial for banks to innovate by embracing Open X, which instead focuses on experience.
The transition to Open X means a transformation for banks in the way they approach the fundamental elements of the business: the WRBR states that banks must avoid focusing on specific products and focus on offering customers an overall quality customer experience. Banks must enter a shared market by seeking partnerships, rather than focus on proprietary innovations to be developed internally. The report uses the Open X Readiness Index, a method for measuring the state of collaboration across four dimensions: people, finance, business and technology. The WRBR also states that banks must move from a compliance-only view to a data-centric approach in order to move the entire industry towards Open X, which will drive excellence in the use of data, fostering a continuous exchange of resources, a better customer experience and faster product innovation.
Research methodology
The World Retail Banking Report 2019 traces the current perspectives and potential evolution of traditional banks in a context characterized by the continuous emergence of BigTech companies and new players. Includes data from the global survey of more than 7.900 retail banking customers in 20 countries and an executive survey of more than 50 senior banking executives in more than 30 markets. For more information, please visit the site.
