Conducting research with over 3000 banking customers, PwC have released a report on customer demand for innovative digital offerings. The research reveals that more and more consumers are using online and mobile channels to access financial products. Over two-thirds (69%) of those surveyed said they currently use the internet to purchase financial products.
The study found that digital banking is set to become the primary relationship channel for personal and SME banking customers by 2015. This shows that there is a real need for banks to embrace digital channels. The banks that provide a differentiated digital experience, with advice and relationship management elements tailored to the individual customer, will secure more profitable relationships with their customers.
Banks are responding to the digital challenge, but is it quick enough? Digital banking is set to become the primary relationship channel for personal and SME banking customers by 2015 and there is a real need for banks to embrace digital channels. Additionally, as consumers continue to embrace social media for brand evaluation and purchase options, the banking sector is increasinglyÂ recognizingÂ that this channel will play a significant role in defending its existing customer base from non-traditional competition sources.
This is according to CiarĂˇn Kelly, Financial Services Partner, PwC, who addresses the Irish Banking Federation Conference today. Banks are under utilising a vital new source of revenue growth as many have been slow to respond to the digital innovations. This is despite strong digital awareness and usage among bank customers and the fact that they have shown a willingness to pay for these.
The escalation of mobile is changing the way consumers think about payments. Mobile payment providers are acting as a catalyst for change in the retail banking space. Traditional banks have a job to do to keep up with digital transaction and payment providers who are invading their space. Banks may need to partner with technology, mobile and other non-traditional banking providers in order to deliver the digital experience customers now expect.
“Given the pressures the financial crisis has had on the banking sector, banks have understandably been slow to embrace the digital innovation customers now expect. Social media is changing customer relationships and is an irreversible cultural change.
Customers are using alternative payment providers and this is becoming one of the biggest threats to banking in terms of the potential loss of access to customers and market share. Banks need to improve their digital offering fast if they are to hold on to their existing customers and attract the next generation.”
Despite customers’ appetite for new and innovative digital banking offerings, and the fact that they are willing to pay for these, the majority of banks still only provide basic mobile and internet banking services. Banks are clearly missing an opportunity if they don’t start to invest in their digital offerings.
“There is a real need for banks to embrace digital transactions. Banks need to align their business model to take advantage. They need to consider their strategy, their culture and ensure that they have the right skills. Banks need to consider strategic acquisitions or partnerships with digital innovators to secure their long-term position and market share.
The banks that provide a differentiated digital experience, with advice and relationship management elements tailored to the individual customer, will secure more profitable relationships with their customers.”
Source:Â http://www.pwc.ieÂ (Press release since removed from site)