BANK & FINANCIAL SECTOR
Consumer behaviors and expectations are shifting in ways that are forcing banks to both redefine their priorities and transform their distribution models: how customers want to interact with their banks, and where innovation can play its part.
As digital offerings mature, banks must define their value proposition to encompass both digital innovation and traditional values to meet their customers’ needs
How to re-establish trust with customers and secure their loyalty, banks will need more than just a digital-first approach
What strategies to respond to regulation and how can banks or insurance companies do business in a regulatory, economic and political environment that will be more constraining. Are resilience, agility, and efficiency enough?
DATA AS A CURRENCY
Consumers are willing to share more of their personal data with their banks, but there is a clear trade-off—they understand the value of their data and expect to receive benefits for sharing it, in the form of offers, reduced interest rates, recognition and other rewards.
YOUNGER CONSUMERS DRAWN TO GAFA MODEL
Google, Apple, Facebook and Amazon (GAFA) and other platforms are providing attractive alternatives to traditional banks, especially among younger generations. Further, younger customers increasingly want to engage via online platforms to help shape future banking products and services that cater to their needs.
AUTOMATED SUPPORT IS WELCOME
Banking customers are open to receiving entirely computer generated support, provided it can deliver the tailored and personalized services they need. This is clearly viewed as a route to greater control over their banking experience: The potential for improved speed and convenience is cited as the main reason consumers will turn to automated support.
PERSONALIZATION THAT STRETCHES BEYOND BANKING
In return for sharing their data, consumers will demand more personalized banking advice. Customers want relevant advice and product information at their fingertips as they go about their daily lives. For example, they want banks to send them information about the best mortgage deals when they are in the process of buying a property, contextual information that many banks currently do not provide. The same number want banks to play a supporting role in the purchasing process for non‑banking products). They say banks could assist with these important decisions by sending helpful information based on their location, price range, and other personal preferences.
A NEW ROUTE TO TRUST
As consumers open up to increasingly data‑driven services, personal relationships are no longer the main driver of trust. The biggest driver of loyalty for banking customers is the ability to trust their bank in protecting their personal data, This is clearly important to customers, and is something banks could build on as they shift to a digital business model. Data security is only one important pillar of trust, with customers also saying responsive customer service and brand integrity—as well as related elements such as conveniently located branches are key to ensuring their loyalty.
BRANCHES THAT ADD MORE VALUE
Banking customers are not yet ready to forgo the branch. But as more bank services migrate online, customers are looking for a branch experience that blends the physical and digital in a seamless manner.
Despite customers’ stated interest in automated support, the ability to make a complaint or seek advice about complex products such as mortgages with a human advisor are seen as the most important features of branches in the future. For branch customer the advanced ATM machines are key, As well as the ability to have devices on hand in branches to access their online banking.
Despite a view that the “regulatory constraints” has gone too far, given the tastes of many politicians, the regulations that have already been implemented are unlikely to be challenged or reduced. If interest rates stay lower for longer in major markets, many bank and insurance business models will need to be rethought.
How far, the “regulatory constraints” will go– given the subdued economic outlook, and the associated low interest rate environment challenging the profitability of many firms, will regulators be inclined, or encouraged, to ease the introduction of new rules or soften existing ones? Will this exacerbate international regulatory fragmentation?
How to develop sustainable business models – with economic and regulatory pressures undermining profitability, how can firms re-shape their business models and structures to be more competitive in this new environment while still managing to embed the right culture and practices in their organizations?
How new technology will change the financial sector – how can firms understand the widespread technology-driven change the industry is facing and appropriately harness its opportunities?
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