Trending
It has been over a decade, 12years to be exact, in which Capgemini has been working with Efma to publish our annual World Retail Banking Report (#WRBR16).
I was in London last week and had a chance to give a sneak peak of the 12th edition at the Efma Distribution Summit.
At the Summit, we heard from industry leaders like Brett King, Chris Skinner, and Michal Panowicz. We also saw some interesting examples of innovative “FinTech”, including Ollie Purdue (the 23-year-old CEO of Lootbank). While there may not be consensus on where the industry will be three to five years from now, there was clear consensus in the different panel discussions and in conversations I had throughout the week - Banking is changing at an accelerated pace and banks are still trying to figure out how to keep up given legacy challenges (both core systems and culture).
For this year’s WRBR, we surveyed over 16,000 customers in 32 countries and interviewed over 140 senior executive bankers.
Four key take-aways I see from this year’s report are:
Today, I would like to share some of the findings around Customer Experience levels and will write more later in the week on the FinTech themes.
Customer Experience Levels Improving across Globe, but Not Impacting Profitable Behavior
Over the last two years, banks have finally started to move the dial in creating more positive customer experiences, rising from 39.5% customers having a positive experience in 2015 up to 54.7% in 2016. Latin America was the only region to see a decline this year.
While Canada remained in the #1 slot in Capgemini's Customer Experience Index (CEI), we saw some significant movement in Western Europe (mostly positive).
The Netherlands jumped up all the way #17 to #2, bumping Czech Republic down to #3. Rounding out the top five countries in our CEI were two Western European countries who also made significant jump - UK rose from #12 up to #4 and Switzerland climbed to #5 out of the #14 ranking last year.
However, it wasn't all rosy for Europe as Spain dropped from #13 all the way to the bottom.
However, despite some improvement, banks are still largely struggling with connecting effectively with the younger generations.
While positive customer experience levels rose across all ages, younger generations like Gen Y still lag well behind older generations.
For example, only 47.7% of Gen Y had positive customer experiences with banks last year vs. 62.4% of those older than Gen X.
Even more concerning is that despite increases across the board in experience levels, it had minimal impact on customers' profitable behavior. Only a little over half (55.1%) of customers note it was likely they would stay with their primary bank in the next six months. That is only up 1.4 percentage points (PP) from last year, despite the substantial increases in positive customer experience. Those percentages get more concerning as we found only 38.4% of customers noted the likelihood they would refer a friend to their primary bank (just 1.0 PP above last year's 37.4%).
And lastly, only 15.9% of customers noted they were likely to buy another product from their primary bank. This number saw minimal improvement on the 15.3% last year.
One might say, and I have heard this argument before, that customers simply don't look at their banks nor their financial services needs with excitement or affinity.
However, we asked customers who currently work with FinTech firms for either banking products or services. While only 38.4% of customers were likely to refer their primary bank, that number jumped to 54.9% (over 40% higher than banks).
Interestingly, Latin America (the only region with a decrease in customer experience this year) had the highest likely referral rates for FinTech (20 percentage points higher than for banks). This suggest it is not a lost cause for financial services providers to gain customer attention and affinity to their products and services. However, there clearly is still a lot banks can do and can learn from leaders in the industry (especially in FinTech).