Compelling reasons for banks to change in 2014

Although we are beginning to see the dawn after the global financial crisis and recession, traditional banks still face considerable uncertainty and many challenges in rebuilding their businesses. Indeed, they are facing strong pressure on profitability, slow growth and low levels of trust among customers. Furthermore, they need to become more in tune with new customer behaviors and expectations that evolve as quickly as emerging new technologies.

Banking executives are acutely aware of the uncertain environment in which their businesses operate and the challenges they encounter in rebuilding trust and loyalty among customers. In fact, given the ongoing pressure on growth and profitability banks face, arguably one of the top priorities for banks around the world is to more effectively engage customers; a difficult prospect given the significant ongoing changes in customer behavior and needs, as well as in the expectations customers have of all their service providers.

Emerging Markets, Global Growth and loss of confidence
Accenture’s recent interviews with bank marketing directors confirm that providing a superior customer experience and implementing omni-channel distribution (through the seamless integration of digital and physical channels) are banks’ top two challenges. Furthermore, these executives roundly agree on the importance of restoring trust, as virtually all said that building a trusted brand identity is among their top strategic priorities for 2014.

Although banks in mature markets have experienced a significant recovery, the recovery is affected by an overall low level of trust in the banking industry as a whole. Consumers have lost confidence in financial services providers and are demanding more transparency and a change in the traditional bank-customer relationship. This loss of confidence is not without grounds: Consumers believe the industry’s reputation lags because they feel banks have failed to deliver on their promises.

Customer experience management in retail banks must be retooled to support a clear focus on banks’ most important stakeholders, their customers. For instance, technology is dramatically affecting customers’ everyday lives. This has shaped the way customers purchase, as they increasingly use the Internet to search for information on products and services and leverage mobile devices to compare products’ prices while in the store.

Putting customers’ interests first
During the interviews we also discovered that the advent and spread of social media networks has radically influenced how customers communicate. Customers now use social media extensively to interact, share and increasingly form their opinions. Word of mouth is the main information source customers use to evaluate offerings while purchasing, even more so than corporate websites. Yet while customers still demand convenience, exploiting all the information they can gather from digital channels, they are also willing to pay a premium if the company provides them with customized products and high-value services.

Indeed, a tailored offering is a key driver of both satisfaction and purchasing decisions, with customers strongly desiring to be involved in a unique shopping experience. In this “switching” scenario, digital technology can play a crucial role in enhancing customer intimacy and more effectively engaging customers to foster loyalty. Only by putting customers’ interests first can institutions earn customers’ trust and confidence. For more information, please download below report.