Five reports published since
the last time RBI went to press consider and analyse
different aspects of the changing landscape of retail banking, with
particular focus on the growing importance and influence of
alternative delivery channels for banks’ retail banking operations.
Duygu Tavan highlights the key findings.

 

Pie chart showing the most important role of the branch to customersMay has been
an insightful month for banks: five reports, three of them by the
European Financial Marketing Association (EFMA), one by TNS and
another by First Data and Market Strategies provide perceptive
statistics on the market conditions both in Europe and
worldwide.

Key findings in EFMA’s Future
of Face to Face: a €15-20bn Multichannel Opportunity
in
association with McKinsey, the World Retail Banking Report
in co-operation with Capgemini and UniCredit, as well as the annual
Strategic Insights and Best Practises 2011 paper show
that:

  • Branches will remain an
    important part of a bank’s distribution network in the eyes of
    customers;
  • But banks’ branch strategy
    needs to evolve along with the addition of alternative delivery
    channels to banks’ distribution networks and Pie chart showing the use of internet banking services in Europealso due to
    changing customer preferences and higher costs as a result of more
    stringent regulation;
  • One issue banks face is
    finding the balance between operating a branch and retaining
    customer satisfaction as customers continue to consider the branch
    the premier channel for high quality services;
  • Customers plan to extend
    their use of the branch from 28% in 2010 to 31% in
    2015;
  • Basic transactions in the
    branch are expected to decline from 37% in 2010 to 34% in 2015 as
    customers migrate to alternative channels.

Significant conclusions
included:

  • 55% of bank customers
    worldwide consider the lack of service quality a reason to leave a
    bank – compared with 27% who cited brand image;
  • Indian banks scored highest
    in Asia-Pacific in terms of customer satisfaction (77%); the US
    scored 78% and Switzerland had the most satisfied customers,
    scoring 76.2%;
  • The global average for
    customers’ satisfaction with their bank was 72.2%; the global
    average for negative experiences was only 3.3%;
  • Pie chart showing use of branches in EuropeCustomers
    worldwide consider the branch and the internet as the most
    important channels;
  • Less than 50% of customers
    had a positive experiences via the branch or internet
    channel;
  • Customers consider the
    branch important for providing advisory, relationship management
    service; and
  • The mobile channel is
    considered the least important one worldwide.

 

How well do you really know your competitors?

Access the most comprehensive Company Profiles on the market, powered by GlobalData. Save hours of research. Gain competitive edge.

Company Profile – free sample

Thank you!

Your download email will arrive shortly

Not ready to buy yet? Download a free sample

We are confident about the unique quality of our Company Profiles. However, we want you to make the most beneficial decision for your business, so we offer a free sample that you can download by submitting the below form

By GlobalData
Visit our Privacy Policy for more information about our services, how we may use, process and share your personal data, including information of your rights in respect of your personal data and how you can unsubscribe from future marketing communications. Our services are intended for corporate subscribers and you warrant that the email address submitted is your corporate email address.

Mobile Life

Yet, demand for mobile banking has
soared by 50% in one year, TNS research found.

In particular, in developing
markets such as Kenya, where more people have mobile phones than
traditional bank accounts, mobile banking growth increased by
200%.

  • the number of mobile banking
    users doubled in the past 12 months in China, Brazil and
    Kenya;
  • Bar chart showing product purchasing in Europein the UK, 20.4%
    people now use mobile banking – compared with 9.7% a year
    ago;
  • in the US, mobile banking
    adoption grew from 11.4% in 2010 to 21.9%;
  • Sweden recorded a bigger
    leap still: mobile banking adoption rose from 8.1% to 20%;
    and
  • 63% of mobile phone users in
    sub-Saharan Africa said they would like mobile banking
    services.

Mobile wallets also taking
off fast

  • In China, more than a fifth
    of the population ‘store money’ on their mobile phones, compared
    with 8% in the US and 12% in the UK.
  • In the US, mobile wallet
    adoption rose by 2 percentage points to 8%;
  • In Singapore, it rose from
    10% to 13%;
  • In Hong Kong, adoption
    increased by just one percentage point to 17%;
  • In Chile, use of digital
    wallets soared from 1% to 7%.

 

Insights to Help Financial
Institutions Better Serve Retail Banking Customers

Box showing EFMA and TNS reportsDespite the
promising conclusions, research by payment processing vendor First
Data and consultants Market Strategies showed that more than a
third of retail banking customers find the advancement in banking
technology advances too fast.

Four in 10 customers said they
desired speaking to an advisor face-to-face instead of getting
information about new services on their own.

The Insights to Help Financial
Institutions Better Serve Retail Banking Customers
study
concluded that financial institutions would need to consider
technological investments from the customers’ point of view. The
report identified six customer categories:

  • Fast
    Trackers:
    young families who rely on smart phones, banking
    apps;
  • Young
    Aspirationals:
    singles with varied interests, little
    banking loyalty;
  • Simplifiers: middle-aged lower income wage
    earners loyal to their banks;
  • Middle of the
    Roaders:
    middle-aged wage earners who wait until
    technology is proven before they adopt it;
  • Value
    Seekers:
    older, well-educated, financially comfortable
    customers not interested in banks’ technological advances,
    and
  • Conventional
    Stalwarts:
    fixed-income retirees preferring paper
    statements.

The findings relate to surveys by
JD Power and Ernst & Young from April and March respectively:
JD Power found that in 2011, 23% of Generation X and Y customers
used mobile banking, up from 11% in 2010. Ernst & Young’s first
global survey on consumer behaviour found that consumers responded
positively to the convenience, accessibility and reliability
provided by digital channels.

Bar chart showing customer acquisition, retention, loss

 

Bar chart showing channel use in Europe