A new report by The Boston Consulting Group (BCG) has stated that the retail banks need to increase their efforts to customise their products and services in order to remain relevant in future during the growing usage of technology and customer expectations.
The report, called Global Retail Banking 2018: The Power of Personalization, is the latest BCG study among the series focusing on retail banking sector.
It encompasses various areas of retail banking such as regulation, performance dispersion, digital transformation, global and regional growth, enhanced personalisation and others.
BCG senior partner co-author Ian Walsh said: “Banks are in demonstrably different places today, using their own particular strengths to overcome obstacles.
“Many banks have made progress in digitising for cost, but they still need to move from pilots to large-scale initiatives to reap the benefits of their digital investments.
“Banks are less far along in digitising for value. The goal of this more ambitious effort is to understand and serve the customer better and, in doing so, to earn more revenue per customer and increase retention.”
Currently, the retail banking section generates nearly half of the total banking revenues, according to the report. This share is expected to continue between now and 2021 with an annual growth rate of 5.3%.
The report has outlined that the banks may face the challenge to implement to implement the new regulations which has nearly trebled since 2011.
It has also identified that personalisation of the services will be the key to ensure customer satisfaction and economic value in banking.
These financial firms should use improved data and technology to understand financial and behavioural attributes of every customer individually.
Personalisation will help the banks to include, retain and engage the customers, the report added.