attrition driver is a poor banking app
decline in branch usage over 5 years
of customers say they will switch from cash/check to digital payments
Across all age groups, interaction preferences were shifting quickly towards digital before COVID-19 and have only accelerated since, with digital experience now being the primary driver of attrition and a major factor when choosing a primary bank.
Traditionally, banks have sought to replicate in-person transactions using digital to reduce cost without much consideration given to replicating the in-person experience. This is changing rapidly with competition increasingly being digital and frictionless, and emotive digital experiences quickly becoming the core to a bank's value proposition. Banks have recognized this shift and are investing heavily to address existing pain points, with new entrants in particular accelerating the innovation tempo. We believe six product features will become table stakes over the next 12 months with further differentiation focused on specific customer segments and their unique needs. Read our report to learn more about these key product features and what the digital future holds for retail banking.
In delivering a compelling, emotive digital experience, banks typically struggle with two major challenges.
- Challenge 1: Banks struggle to design unique, meaningful, and emotional experiences for their customers. Customer-centricity is often not at the center for how banks approach /offer development and go-to market strategy design. Experience design and development capabilities are nascent, and banks tend to focus on superficial customer needs to ensure relevance for their entire customer base instead of differentiating by addressing unique needs of priority segments.
- Challenge 2: Nearly nine out of ten banks experience issues related to digital transformation with efforts complicated by a set of common challenges (e.g., constraining investor expectations, lack of FinTech enterprise readiness, etc.). Learning from what has and hasn't worked, we've identified nine principles which underpin successful transformations. These include a continuous focus on momentum via test and learn and establishing self-funding mechanisms among others. Discover more in our full report.