Customers at retail banks reported having fewer positive customer experiences for the first time in three years, according to the eleventh annual World Retail Banking Report (WRBR) released today by Capgemini. More than one-quarter of the countries in the WRBR's Voice of the Customer survey reported a decrease of more than 10 percent in the share of customers with positive experiences, a reversal from 2013 when increases of more than 20 percent were prevalent.
According to the firm, this downward shift underscores the challenges banks are facing in meeting the evolving demands and high expectations of digitally-savvy Gen Y customers, and requires banks to digitally transform as well as leverage social media. This year, for the first time, the report measured the impact of positive experiences on a number of behaviors linked to increased profits. Specifically, the report found 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 report finds.
According to to Capgemini, since Gen Y consumers make up anywhere from one-quarter to one-third of the population in many markets, catering to their tastes is a key for banks. "This group's expectations of how banks should serve their customers, particularly via digital platforms, are significantly higher than those of the general population thanks to their prolific and sophisticated use of technology," the report adds.
In North America, Gey Y consumers are significantly less likely to have a positive experience with their bank, the report found. Only 41.7 percent in North America of those between 18 and 34 years cited positive experiences with their bank, compared to 63.4 percent of those of other ages, a difference of 21.7 percent. In other regions, positive experiences for Gen Y lag those of other age groups by anywhere from only 7 percent to nearly 10 percent.
The need to address the requirements of digitally-savvy customers must be balanced against the reality that traditional channels still play a role, the report found.
"Banks are no longer a branch or a place where customers go, but a collection of services that take place, anywhere, anytime," said Patrick Desmares, Secretary General, Efma, in the report. "Banks need to be prepared to respond to all customers, no matter how, when, and where they want to do their banking."
Bryan Yurcan is associate editor for Bank Systems and Technology. He has worked in various editorial capacities for newspapers and magazines for the past 8 years. After beginning his career as a municipal and courts reporter for daily newspapers in upstate New York, Bryan has ... View Full Bio