The news: Bankers are worried about their ability to offer high-quality omnichannel and personalized experiences to their clients, according to a report from Capgemini and Efma.
For their latest World Retail Banking Report, the two firms surveyed 8,051 consumers and 142 banking executives based in 29 countries.
What’s the problem? Consumers' responses regarding fintechs and incumbent banks contrast sharply—and are worrisome for banks, now that customers can switch banks with a tap of their screens:
The gap between what customers expect and what banks can deliver poses a significant threat to long-term relevance and growth. Nevertheless, the report concludes: “This is a competition that banks could lose, but don’t have to.”
What are the obstacles? Banking executives identified their aging IT infrastructure as the biggest hindrance.
Another issue was handling plentiful customer data they already possess.
How banks can compete: They’ve earned customer trust, gathered data, and created multiple delivery channels—and they need those strengths to compete in this hyper-personalized environment.
But to prevail and avoid losing customer value to more agile fintechs and neobanks, they’ll need to rework their business models and drive greater customer engagement.
Banks also need to address what Nilesh Vaidya, global industry head, retail banking and wealth management at Capgemini Financial Services, called “the disparity and striking inconsistency between a customer’s digital and physical banking experiences.”
Ecosystem platforms are emerging as a promising way to add capabilities or increase revenues, but the report found banks are "still learning the ins and outs of platform innovation."
What this means: “Banking is at a crossroads,” the report concluded, meaning that incumbent banks now are trying to catch up and to interpret their data. Insights from that data will help them create experiences that can attract and retain customers, deepen relationships, and power growth.
Banks still have advantages, including customer trust, regulatory imprimaturs, and product expertise. But the report urges incumbents to look at successful fintechs for lessons on how to capture value, and offers these examples:
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