Innovation Management Social

Seducing the Runaway Customer

31 March 2016


Seducing the Runaway Customer

Today’s banking customer is playing hard to get – and hard to keep!

In the face of changing customer demands, emerging competition, and global regulations, innovation is key for today’s banks to succeed. Whether it be by entering new markets, rebuilding their brand, introducing new services or initiating transformational process changes, innovation will be at the heart of any successful bank’s strategy today.

Because the user’s perspective is crucial in any innovation project, the European survey undertaken for this whitepaper focuses on the end consumer’s perception of banking, their expectations, and their openness towards alternative banking models.

At first glance, our survey painted a positive picture of banking. Customers do trust their banks, and overall they are satisfied with the services that they offer. However, upon deeper inspection of the customers’ mindset we discover a sobering finding: customers are open to more, even though they might not know what it could be yet. As soon as someone – whether a bank or a nonbank – gets the formula right, customers will happily switch.

It is therefore time for banks to take the necessary actions to offer customers new and exciting offers that they will naturally be drawn to. Our study reveals key insights as to how to proceed in this regard. For example, a notable finding is that customers are in fact willing to share their personal data, as long as they get a clear benefit for doing so.

This finding strongly supports the idea that the bank of the future will make money by unlocking new ways of delivering value through data. More generally, technology combined with creative thinking is the way to gain loyalty and new customers. This of course requires strong digital foundations, as well as the capability to evolve at multiple speeds.

It is well time for banks to step out of their comfort zone and undertake the bold strategic moves that will shape the future of the industry – and seize the opportunity to be a leader in that change.

Understanding customers’ expectations can guide innovation and business strategies

One of the consequences of the digital world is that customers have changed. New technologies have empowered them. They are social and connected. They are more informed, pro-active, and they want to be in control. At the same time, industry barriers are fading: new business models are emerging and new entrants are threatening to seize the customer relationship – and the revenues from it.

As a result, banks have significantly sped up their digital transformation and increased their customer focus. But is it enough? And is it going in the right direction?

We wanted to measure the adequacy of banks’ digital strategies by getting insights directly from customers.
How are banks perceived in terms of services and technology? Is there an interest for alternatives to banks?

With the support of research agency TNS Sofres, we surveyed 5000 customers in six EU countries: France, UK, Germany, Spain, Belgium, and the Netherlands. The population demographics were chosen to provide a representative survey in terms of gender, age, social class and regions.

In this paper we discuss the major findings of the survey. In particular, we present the results from the entire survey (i.e., across age and countries) unless otherwise indicated. Country and demographics specifics are examined when significant differences arise.

Overall, the results are fairly similar across countries. The most notable differences come from Spain, which showed a more defiant attitude towards banks as well as an increased need for change and innovation.

Differences between age groups exist, although not to the extent one might expect (see Appendix).

In this survey, we did not try to uncover what products or innovations customers want – which is a pointless exercise most of the time anyway. As Henry Ford famously said, “If I had asked people what they wanted, they would have said faster horses.”

Instead, we tried to determine customers’ technological appetite and to capture what is their attitude and state of mind. By testing hypotheses and understanding consumer readiness one can better identify innovation opportunities and devise business strategies.

To read all the Sopra Banking Software white paper “Seducing the Runaway Customer”, click here

Physicist and expert in strategy and digital. I believe in developing a diversity of knowledge to drive innovation.
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