Banks are failing to fully exploit online and mobile to engage customers, according to a global research study.
The research study was conducted by financial services NPO Efma and financial software company Misys, and involved a survey of 185 banking professionals from May to October 2015.
According to the study, the majority of banks (87%) perform less than 10% of sales via digital, and for one in five banks, this figure falls to less than 1% of sales.
Only 12% of customer sign-ups is conducted via digital channels, while 40% of new customer acquisitions are still conducted via the branch, showing that banks are failing to exploit fully online and mobile to engage customers, according to the research.
“The ambitious plans to drive the majority of sales via digital channels are unachievable in the current technology environment,” said Efma CEO Vincent Bastid.
“Banks must develop a strategic link between digital channels and their ability to support customer experiences that — crucially — result in sales outcomes,” he said.
According to Bastid, the banks that flourish will be customer-focused institutions, “founded on core software and systems that can deliver better customer experiences as well as increase sales, all via an omni-channel approach”.
Globally, banks forecast that sales via digital channels will jump from 13% on average today up to 75% in three years’ time.
However, banks must overcome the biggest barriers to customer driven sales to achieve this significant migration to digital channels.
Some 39% of banks cite culture and 26% blame technology barriers on their failure to achieve greater digital sales.
Mark Yamin-Ali, retail banking solution leader at Misys, said: “Banks can leverage new technologies in more sophisticated ways that not only enhance customer-relevant interactions but also drive bottom line impact”.
According to Yamin-Ali, the real issue here is core banking where banks which focus only on digital to achieve customer-centricity will have a “beautiful shop window, with outdated stock”.
“Customer-centricity must be from channels to the core. And only with core modernisation, can banks reap the full benefits of digital innovation,” he said. — Fin24
