20130204 Global Consumer Banking Survey 2012

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    The customertakes controlGlobal Consumer Banking Survey 2012

    Yes No Dont knowOui Non Je ne sais pasJa Nein Ich wei nicht

    S No No sabe no contestaSim No No sei

    S No Non lo so

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    2

    Executive summary

    Contents

    Introduction 1

    Executive summary 3

    01Customers are increasingly likely to use other banks 7

    02Customer advocacy is becoming a dominant force 13

    03Customers want greater personalization and exibility 19

    04Pricing and service quality remain critical to customer satisfaction 27

    05Rewarding loyalty will boost retention and customer acquisition 33

    Conclusions 36

    Methodology 38

    At-a-glance country pages and contacts 39

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    Percentage decrease of customercondence in the banking industry

    World

    40%Italy72%Spain

    76%

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    3

    Executive summaryCustomers are taking control of their bankingrelationships. Banks need to embrace this trendand give more power to their customers.

    Customers are taking greater control of their banking relationships.They are switching banks, changing their behavior and demandingimprovements. In response, banks need to reevaluate theirassumptions and fundamentally change how they interact with theircustomers. They need to embrace change by giving their customersgreater exibility, choice and control, and by reconguring theirbusiness models around customer needs.

    Giving more power to customers may feel uncomfortable, but inthe long run banks that do so will position themselves for success inthe future.

    Customers are taking control.Overall customer condence in banking continues to

    fall, with 40% of customers losing trust in the industryover the past year and only 22% gaining condence.

    Despite improvements in the US, customer trust isfalling in many other mature economies. The trend isstrongest in the European Union (EU), where morecustomers have lost condence in countries like Italy

    (72% in 2012, from 48% in 2011) and Spain (76% in2012, from 58% in 2011).

    It is true that customer condence remains

    resolutely high in a number of emerging markets. InIndia, 72% of customers are feeling more condent.

    Even so, the overall direction of sentiment is clear.Globally, the extent of falling condence is leading to

    some fundamental changes in customer behavior.

    Customers are more likely to use other banks.Customers are becoming less loyal and increasingthe number of banks they use. The overallproportion of customers planning to changebanks has increased from 7% to 12% since 2011.Sensitivity to fees and charges is the leadingdriver of attrition, cited by 50% of customers.Customers with only one bank have fallen from41% to 31%, while those with three or more haveincreased from 21% to 32%.

    Customer advocacy is gaining power.Word of mouth is gaining inuence. Customers

    are listening to each other more than their banksor nancial advisors. Globally, 71% seek advice

    on banking products and services from friends,family or colleagues, and 65% use nancial

    comparison sites to nd the best deals. The views

    of online communities and afnity groups are

    also gaining importance. The use of social mediaas a source of banking information (by 44% ofcustomers) is amplifying customers voices, givingthem greater power as advocates or critics.

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    Executivesummary

    Customers want to play an active role intailoring their products and services.Globally, only 44% of customers say their bankadapts the products and services to meet theirneeds. The survey results show that 70% ofcustomers are willing to provide their banks withmore personal information. In return, customersexpect to receive tangible improvements inthe suitability of products and services theyare offered.

    Customers want better value and improvedservice.Not surprisingly, customers want lower costsand better service. Improving fees and chargesis the top priority, as cited by 22% of customers.Customers second priority is to strengthenonline and mobile banking. But customers wantmuch more than just a better deal. They want theexibility to shape the relationship, contacting

    their bank whenever and however they choose.Customers prefer online channels for simple

    transactions, but they also demand high-quality,personal service for more complex transactionsand advice.

    Banks need to embrace the shifting balanceof power.

    Banks are competing for the business andloyalty of increasingly demanding customers. Inresponse, different models are emerging to servedifferent customer needs. Some are based onlow-cost competition, some on high-touch serviceand some on accessibility. Large, full-servicebanks need to defend market share againstspecialist competitors focusing on particularproducts or customer segments, as well as newentrants in the payments space. At the sametime, full-service banks need to retain the abilityto meet a huge range of customer needs.

    For large retail banks, choosing where and howto compete is a complex challenge. They need todeliver the level of personalization and exibility

    customers want, and develop differentiatedproducts and services all while lowering costs andgenerating sustainable prots. There is no simple

    solution, but as we look across the industry we seenine key implications.

    Give customers more exibility

    1 Make pricing and service promises transparentPricing is critical to customer satisfaction, but most customers have no idea how much they pay eachyear. Transparency over pricing and service promises is vital if banks are to deliver something customersvalue. It is also critical for banks to rebalance fee structures to achieve the clarity and sustainabilitydemanded by regulators and investors.

    2 Offer segmented levels of customer serviceCustomers should have the option to buy into certain products and services, as well as the ability to earnupgrades through loyalty, whether in terms of longevity, share-of-wallet or the value they generate.

    3 Move from multi-channel to omni-channel distributionCustomers care more about convenience than about channels. Banks need to look beyond multi-channeltoward a fully integrated banking experience that combines the advantages of physical branches andin-person interactions with the information-rich digital channels. Omni-channel distribution leveragescustomer data gathered from branches, website visits, social media and elsewhere. Marketing offers arecustomer-segment specic, rather than channel specic, and allows customers to purchase a product in

    one channel that they had researched or seen promoted via another channel.

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    Globally

    50%of respondents cite dissatisfactionwith high fees as the mostimportant driver of attrition.

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    01

    Customers are becoming less loyal to their main bank, and theyare increasing the number of banks they use. The proportion ofcustomers planning to change banks has grown by 70% since 2011,and attrition rates have increased in several major markets. High feesare the leading driver of attrition. Globally, multi-banking is increasingas customers search more actively for the best rates and products.Customers remain wary of non-nancial providers, but banks face

    a potential threat from new entrants offering better rates, morepersonalized service, stronger technology or more attractive rewards.

    Section 01

    Customers are increasinglylikely to use other banks

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    There has been a signicant jump in the number

    of customers planning to change their bank.Attrition rates have grown in several keymarkets, driven chiey by high fees.

    Despite strong overall measures of customersatisfaction, signicant numbers of customers

    are actively considering changing their bank.Worldwide, the number of customers planningto switch banks has grown from 7% in 2011 to

    12% in 2012. The gure is signicantly higher inChina, India and several Latin American markets.For example, the number of Brazilian customersplanning to change has jumped from 7% to 20%.Only Japanese customers are less likely to movebanks than in 2011.

    Dissatisfaction with high fees is the most importantdriver of attrition, cited by 50% of respondents.Poor branch experience (31%) and poor interestrates (30%) are the other leading drivers of attrition.

    Worldwide, 34% of customers say they havechanged their main banking provider and 74% havedone so in the last 10 years. The overall gure is

    marginally lower than in 2011 but it conceals somewide variations across countries, with attrition

    rates rising signicantly in several key markets.Specically, in both the US and Canada, the number

    of respondents who have changed their main bankhas increased from 38% in 2011 to 45% in 2012,while it decreased from 40% in 2011 to 29% in 2012in Brazil. Attrition has also accelerated in India,China and South Africa.

    01Customers are increasinglylikely to use other banks

    Have you ever changed your mainbanking provider?

    Yes No, but I am planning to change No

    Wor