Few industries are feeling the effects of digital transformation more deeply than financial services. According to Celent, in the last five years the global investment community has been ramping up investments in technology start-ups, specifically targeting the financial services industry. By the end of 2015, Fintechs were already working with an estimated IT spend of nearly $20 Bn USD and growing. Clearly, the financial services industry is a very attractive sector in which to focus the development of disruptive technologies.
The rise of Fintechs puts pressure on traditional providers
Fintechs are competing with traditional financial services providers, who once had a clear mandate to service customers via well-defined and understood channels, by focusing on emerging communications channels with the goal of creating a better overall customer experience. Does it make sense for banks and financial services firms to shift their entire mix heavily to digital, or does a more balanced approach offer a more effective alternative?
More pressure from the continued growth of mobile
One of the major factors driving the mobile banking revolution is the rapid rise of mobile banking users across the globe. This rapid shift to mobile adoption signals that a shift from on premise to mobile banking and mobile apps needs to be taken into consideration for banking providers to remain competitive. However, research indicates that the proper course of action may not be so simple. While up to two-thirds of customers will do comparison shopping of banking offers online, not everyone feels comfortable completing all of their banking transactions online or over a mobile application. In a recent study of 2,084 banking consumers in the UK, aged 16 to 64—commissioned by customer communications management software provider, Quadient—it was uncovered that 61% had visited a branch in person in the past 6 months.
Consumers are split on modern vs. traditional banking services
When the study asked about the ability of mobile to replace traditional banking, 79% of respondents believed that their service would not be as good if they were to rely only on digital/mobile banking, and a further 19% of respondents were deeply concerned about the equal availability of online and offline services. Meanwhile, only 44% of respondents wanted modern technology to mimic the traditional bank manager experience.
The survey results reveal that consumers are split on the future of banking. But traditional or digital, customers are demanding better customer service. In short, customers are still hesitant to buy financial products via digital channels, but the bank that provides the best overall customer experience is the one most likely to keep current customers happy, and win future business.
What customers want is a great experience
Our study indicates that the biggest problem that banks face is the lack of a personalized and consistent experience:
• 68% of respondents felt that they were treated “as a number” by their bank
• 64% of consumers feel that they get a better customer experience from retailers then they do from their bank
• 44% don’t feel that their bank communicates with them consistently
To remain competitive, banks and financial services providers have to strike the right balance to provide a consistent experience that works across channels.
An infographic showing the full results of our banking consumer study is available here: