For the fifth year running, we surveyed consumers in the UK, Germany and India to discover how banking providers should adjust their strategic plans and tactical investments to better attract and serve retail customers, from millennials to baby-boomers.
In all countries, we’re seeing the rapid transformation and digitization of the retail banking industry. Digital transactions – especially around online, mobile and person-to-person (P2P) payments – continue to take on an ever-bigger role in defining the banking experience.
Financial fraud is increasing as well, and there’s a clear correlation between financial fraud and digital activity. This highlights the challenges that banks face around fraud prevention and data security.
But there’s more for providers to learn, including at a country-specific level.
The UK: Mobile payments are catching fire with millennials
In the UK, mobile payments are growing fast. Already, 39 per cent of millennials have switched to mobile payments from cash or cards. And tech giants such as Samsung, Google and Apple are staking early claims to consumers’ mobile wallets.
Banking providers, which have a major trust advantage over tech companies, must take notice of these innovations.
Conclusion: Rather than simply trying to replicate the physical payment experience on a phone, UK banks should prioritize convenience, ease and security to make the most of the possibilities of mobile payments.
Germany: Digital is exploding
In Germany, bank interactions via mobile or other digital devices increased by 80 percent from 2018 and now account for 36 percent of all bank interactions.
Meanwhile, consumers are merging their financial, private and business lives – also known as “invisible banking” – while visits to physical branches and telephone contacts have plummeted.
Conclusion: German banking providers need to improve the experience and expand their capabilities across the board. They can leverage this broader digital acceptance by introducing solutions and product bundles that are not pure financial plays. For example, a bank could work with a mobile carrier to offer P2P payments without the need for a traditional bank account.
India: The elephants learn to dance
Customers of the top 50 global banks and private sector banks are less satisfied than they were in 2018.
However, public sector banks – traditionally seen as slow to react – saw their proportion of “extremely satisfied” customers rocket from the worst-performing category to the best.
It’s clear that innovation is no longer restricted to a certain set of banks. The elephants have learned how to dance.
Online-only direct banks are a relatively new entrant to the Indian market. With a user experience inspired by consumer giants like Facebook and Google, they’re making noticeable strides, with 43 percent of their customers “extremely satisfied.” This is creating a new battleground for customers, as consumers have a host of options for their banking needs, including nonbanks, and switching providers has never been easier.
Conclusion: Existing providers are on notice: they must embrace digital and ensure that they are providing the optimum customer experience.
No matter how global your point of view, the PACE results prove that you have to be conscious of unique country differences to win new customers and retain existing ones.
Want to learn more? Download the research to understand how to compete more effectively in the changing banking landscape.
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Tags: Consumer Segments, Technology, Digital Innovation