EY Global Consumer Banking Survey

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  • 1. Winning through customer experience EY Global Consumer Banking Survey 2014

2. Contents 1Welcome2Executive summary6Global insights A promising, active environment The power of trust The experience is what matters Key opportunities for banks20Segment insights Getting to know your customer segments Industry and institutional sentiments Opportunities for segment-driven investments34Why banks need to act now40Conclusion42Research methodology44Country contacts 3. Welcome When EYs second global consumer banking survey was published in June 2012, the globalFast forward to this new edition of our survey and the outlook for retail banking appears moreHowever, the primacy of the banks relationship with its customers is under threat as neverpayments, is making it easier for new entrants to challenge the status quo and exploit areas of This years survey includes responses from more than 32,000 retail banking customers across 43 countries and, although retail banking remains a local business, it is striking how many key questions: What is the role of trust in creating customer advocates, and how valuable is trust to the overall banking relationship? Are banks investing in the right aspects of the customer experience? How well are banks performing on key interactions from the basics of day-to-day transactions, How similar are customer behaviors across the globe? How well are banks prepared to fend off potential new market entrants?Bill Schlich Global Banking & Capital Markets Leader Winning through customer experience1 4. Executive summary highest levels of trust in order toThe banking industry is poised for growthAn improved experience is key to realizing that growth Customers generally trust their primary providers, but the highest level of trust is a clear differentiator in creating advocacy, and customer experienceof the improvement may simply be a restoration of Crisis, this improved sentiment can only helpcited response was the way I am treated, followed closely by other elements of the experience, such as communications, quality of advice and complaintwith customers who are true advocates, those who are very likely to recommend their primaryMoreover, the most common reason customers cited for opening or closing accounts in the pastof advocates opened new accounts or services atto increase advocacy and expand their customer2So the experience drives not only complete trust, and thus advocacy and referrals, but also the amount of business customers are placing with their 5. Customers expect more convenience and security, those have quickly become When asked to evaluate 31 experience elements or banking, mobile banking was viewed initially as a pointmeeting basic expectations, such as transparency of fees and communication, and the continued importancelandscape is different in emerging markets, but no lessdifferentiate themselves by customizing products and solutions to meet customers needs and helping themKey improvement areas for banks Make banking simple and clearTransparency of fees and simplicity of offers and communication. This is one of the mostOmni-channel experience. banking but expectations are constantly rising as new technologies and consumer behaviorsHelp customers make the decisions in a complex environmentWork with customers when problems arise and become their advocateMore and better advice. Customers tell us they are willing to increase their accounts and demonstrating the power of personalizing the experience and creating a mutual exchangeGreater use of data and digital channels to empower customers. Banks have access to vast data sets, both in-house and externally available, that they should leverage toEnhanced problem resolution experience. Solving problems in a way that leavesequipping the front line to handle certain problems and escalate others, explaining why the issue occurred, and following up to ensure resolution is complete are examples of ways toWinning through customer experience3 6. Segmentation can provide actionable insight for improvements Customers products, attitudes and preferences are notMobile customers present the greatest challenge to traditional banks ability to retain all or part of theresults of the more than 32,000 customers into eight segments that share common behaviors, expectations, The segments vary in size, assets and willingness to paytransactions, current products and services, engagementpromising but view banks as having a limited competitiveunique lens and highlights opportunities to consider segment-Eight global segments LargeSafety SeekersBanks competitive differentiation vs. alternative providers1%9%10%19%20% or moreRelative populationBalancersTraditionalists Unhappy and UnmovingsAssets under management of total populationNew World Adopters Upwardly MobilesElitesSmall LowCustomer engagementHighTime is of the essence advantage in online banking features is also relatively or close any accounts in the next 12 months, this should intend to maintain their current relationships, 22%of companies to provide banking services, particularly for transaction accounts, and banks may be on the verge of banking being the second-most common product atAlthough traditional banks are currently seen as beingthe threat of another provider dominating these offerings and then becoming customers primary provider is onebranch and ATM access, they are most vulnerable onTraditional banks scored lowest on mobile banking features visvis the competition, and their competitive4www.ey.com/globalconsumerbankingsurveyrespond to these challenges, as there is a multitude of new providers, including mobile telephone services, technology companies, and new types of banks with different technology and services 7. Winning through customer experience 8. Global insights A promising, active environmentHow likely are you to recommend your PFSP?toward the banking industry changed in the past 12 months?3% 1%48% 40%38%19%33% 22%40%19%37% IncreasedRemained the sameVery likely Likely20132012Very unlikely6 9. The value of advocacy across the board, customers who are very likely to recommend their primary provider have already increased their very Percentage of customers who recently made or are planning changes with their PFSP Very likely to recommendLikely to recommend44%34%3% 2% 1% Consolidated all accounts and services30%20%Opened new accounts or services9% 4% 1% Intend to consolidate all accounts and services22%8%Intend to open new accounts or servicesPFSP relationship Our analysis is frequently done in the context of customerswith ones primary provider is a savings account, followedPFSPOf these, satisfaction levels with online banking and online bill payment are highest, closely followed by mobile payments which is owned by a smaller, but growing, portion But customers are expecting more and more from their providers and have an increasing array of options from which to choose, so in this increasingly competitiveBankeither opened or closed accounts and services in the pastCredit card companyGiven this dynamic environment, this report exploresTechnology provider such asthose aspects of banking in which traditional banks eitherMobile telephone serviceProduct ownership and satisfactionKey transactional products and servicesOwn with primary provider65% 57%78%69%15% Mobile payments52% 46% Online bill40% 40%Investment17%32%Reloadable11% 8%27%17%Savings with metals 43%29%12%6%26%13%54% 59%14%28%5%15%13%9% 4% 4% 1% Identity theft 1% 0% Credit monitoring 1% 0%Winning through customer experience 10. The power of trust Given the value of advocacy, it is important to understand what a customers primary provider must do The survey results show that 93% of customers trustDegree of trust in primary provider Moderate trustComplete trustmoderate trust, will result in much higher levels of Trust is multi-faceted and is most frequently associated with the stability of the institution and the customer experience, with the way I am treated being of great importance, followed closely by communications, advice experience that we explore as opportunities throughoutRelationship between trust and advocacy in primary provider Very likely to recommendMinimal trust or no trustLikely to recommendNeutral or unlikely to recommend7% 68%Trust20% 50%44% 5%27%Moderate trust13% 84%30%Complete trust49%3%Minimal trust or no trustReasons for having complete trust Financial stability Ability to withdraw money Their security procedures Institutional stability42%The size of the company60% 54% 51%The way I am treated44% 41% 38%How they communicate with me Quality of advice provided Customer experienceMy relationship with certain employees The fees I pay Interest rates I earn on my accountsFees and ratesInterest rates I pay on my loans Stories from friends or relatives Their decision to open or close branchesOtherRecent articles or news storieswww.ey.com/globalconsumerbankingsurvey19% 26% 24% 20% 14% 9% 8%56% 11. The experience is what matters The experience is not only a key driver For customers who opened or closed accounts or services in the past year, the single most common reason wasreinforced in the next section of the report, which discusses the importance of fee transparency to customers and their relative dissatisfaction with high, physical branch access was more likely to be a reason for opening accounts and notably less of aReasons that customers opened or closed accounts in the past 12 months33%41%32%30%28%More convenient to have everything in one place29%18% 17%Access to branches and banking services Information provided by friend or relative Their decision to open or close branches Information provided by news or advertising28%7% 6%13% 5%5%9%8%Other Not sure26%3%7% 2%Winning through customer experience9 12. Key opportunities for banks Opportunity 1: Make banking simple and clearExploring the experience and the opportunitiesStarting with trust As previously show