Retail banks are on the verge of losing customers and profitability due to decline in the positive customer experiences for the first time in three years, a study by Capgemini has revealed.
According to the eleventh annual ‘World Retail Banking Report (WRBR),’ this downshift highlights the challenges banks are facing while fluffing the evolving demands and high expectations of digitally-savvy Generation Y2 (Gen Y) customers.
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In order to thwart this downward trend and ensure business profitability, the bank should transform their digital banking channels as well as use social media.
More than one-quarter of the countries, where the WRBR’s Voice of the Customer (VoC)3 survey was carried out, reported a decline of over 10% in the share of customers with positive experiences, a major reversal from 2013, when over 20% increase was reported.
Capgemini Financial Services Global Business Unit chief sales and marketing officer Jean Lassignardie said, "The decrease in the percent of customers reporting positive experiences signals an early warning alert for the industry."
"To reverse the troubling decline in positive experiences, banks need to fully understand evolving customer preferences and the expectations of ‘Gen Yers’, who are driving current and future demands in banking and its digital transformation."
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By GlobalDataFurthermore, the study revealed that customers with positive experiences are more than three times more likely to stay with their bank than those who have negative ones.
Customers with positive experiences are also three to five times more likely to refer others and purchase another product.
The power of Gen Y demands will shape the future of digital banking as this group’s expectations of how banks should serve their customers, particularly using digital platforms, are significantly higher than those of the general population.
The study weighs that retail banks must pay attention to the needs and expectations of Gen Yers, as their influence is only expected to grow.
