Retail banks not embracing data as natively as fintechs and digital banks

This is the conclusion of an industry report based on two surveys deemed representative of global banking consumer sentiments.

The World Retail Banking Report 2022 by Capgemini and non-profit organization Efma—which draws on insights from two surveys (one with 8,051 respondents; and another involving interviews with 142 banking executives)—has concluded that traditional banks in the data were lagging behind fintechs and digital banks in terms of offering true omnichannel customer experiences.

Apparently, 75% of respondents were attracted to fintechs’ cost-effective and seamless services, significantly raising their digital banking expectations. However, traditional banks in the surveys were struggling to deliver, with 70% of respondents (banking executives) concerned they lacked sufficient data analysis capabilities.

Furthermore, nearly half of respondents indicated their current banking relationships were neither rewarding (49%) nor emotionally connected (48%), while 52% indicated that banking was “not fun.”

Other findings

In the report’s executive survey, 95% of top global banking respondents had indicated that outdated legacy systems and core banking platforms were inhibiting efforts to optimize data and customer-centric growth strategies, while 70% had indicated that they lacked resources to process and analyze data.

Also:

• 70% or more of respondents (banking executives) cited that traditional banks in the survey lacked data and analytics capabilities.
• In the executive survey component, 78% of respondents were worried about cannibalizing products through ecosystem partners, and 72% were concerned about preventing brand dilution.
• 75% of global banking CMO respondents indicated that they had direct responsibility for brand building (25% indicated it was a shared responsibility with other C-Suite executives), and 63% were responsible for new product development and launch. However, only 22% of such CMOs reported that they directly manage end-to-end customer experiences or had access to complete customer profiles needed to effectively tailor their product or service.

According to Nilesh Vaidya, Global Industry Head, Retail Banking and Wealth Management, Financial Services Strategic Business Unit, Capgemini: “Retail banks must rethink their wider business models, restructuring to focus on providing the same personalized, lifestyle-enabled ecosystem journeys that customers have come to expect from their digital interactions. Without addressing the disparity and striking inconsistency between customers’ digital and physical banking experiences, traditional banks risk losing customer value to their more agile fintech counterparts.”

John Berry, CEO, Efma, added: “By strengthening their ability to collect and analyze data, providers can identify what customers want, which ultimately is consistent omnichannel banking experiences.”