SunGard’s newly published report looks into bank readiness, and asks whether banks in Southeast Asia and the Middle East are meeting the demands of their clients in an era of rapidly changing consumer behaviour. Isabella Grotto looks at the report’s findings
The report examined the opinions of 1000 bank customers evenly split across ten countries in the fast-growing, ‘more agile than mature’ developed markets of Southeast Asia and the Middle East.
In particular, SunGard’s asked customers to identify their modes of interaction with their banks, their attitudes towards the institutions, products and services used, and the improvements they would like to see in their banking services.
The responses obtained deliver insight into bank readiness through what SunGard identifies as its four key dimensions: mobility, multi-channel capabilities, social media use, and customer metrics.
A significant finding which emerges from the report is the prevalence of multi-banking amongst the idnividuals surveyed. In particular, the report states: ‘According to the research conducted, the majority of bank customers in emerging economies have at least two banking relationships.’
The proportion proved to be slightly higher in Southeast Asia, where almost half of consumers were found to hold accounts or financial products with three or more providers, compared to almost a third in the Middle East.
Among the reasons cited for customers’ tendency to hold several banking relationships, convenience was cited overwhelmingly as the determining factor, with 65% of respondents mentioning it as a factor. Second in importance, considerations relating to the range of products available were a factor for 44% of respondents. Conversely, the allure of specific product requirements was felt by only 17%.
As far as the customer trust factor was concerned, while 35% of respondents described their use of multiple banking relationships as a risk-spreading measure, only 17% cited lack of trust in a particular institution as a motivation.
It is this lack of loyalty highlighted by the report as a main driver for financial services providers to determine what they can do to satisfy the changing needs and expectations of their customers: ‘In their drive to create loyal and potentially more profitable customers, banks first need to establish what consumers expect from their banking experience, especially in light of technology trends’.
In particular, while laptops and desktop pcs have seen their popularity as usage devices decline, both smartphones and mobile devices such as iPads have seen theirs increase by 16% and 15% respectively.
SunGard believes such consumer behaviour shifts to be a fundamental factor for banks: ‘The popularity of digital channels continues to grow and to give rise to a range of complex new challenges for financial institutions,’ states the report.
However, the rise and rise of the digital channel must not lull banks into neglecting face-to-face interaction with customers, as ‘Even in today’s more digitalized world, one of the most critical components of the banking channel mix is the branch.’
Indeed, among those surveyed, 95% said they still visited their branch network regularly, up to twice a week for 10%.
Among the reasons for using their branch network, 58% of respondents said they did so to obtain help or advice, while 36% cited safety or security concerns as motivation. All importantly, 35% of those surveyed prefer in-person contact, despite the fact that branch experience also appeared among the top three areas which should be improved according to customers.
According to SunGard, the findings are indicative of a need for banks to not limit adaption to ‘going mobile’, but also to ensure coherence by focusing on updating the branch experience to convey ‘consistency, automation and simplicity’.
They believe findings such as these will spark ‘a new round of competitive investments in the branch and call-centre functions’, as banks bid for their branches to become the ‘advisory and sales centres’ that both they and their customers desire.