Financial consumer preferences in the digital era

Digital consumerism is having a major impact on banking, and there is a widespread expectation of significant shifts in market share. Moreover, in the retail banking market, we are seeing a high propensity among consumers to switch banks. To not only maintain but expand their market share, leading banks are taking a step back and considering their customers. What do consumers really want from banks in this digital era, and how can banks deliver? 

Financial consumers increasingly have high expectations based on their experience with other types of retailers that are leveraging digital consumerism. Today, they want more than a just place to deposit their money and pay bills; they want a personalized retail-like experience that offers value-added spending and wealth-building services that are tailored and delivered omni-channel.

Some of the top financial consumer wants in this digital era of banking include the following:

Rewards:  Being rewarded for their business is by far the top service demanded by financial consumers. They expect to be valued for their total spending and rewarded for their loyalty. They see no difference between spending by cash, check, credit or debit card, etc. and want to be rewarded, irrespective of payment type.  As reward programs become mainstream, consumers are looking for rewards to be managed in one place rather than across a multiplicity of end retailers. This creates a significant opportunity for banks, which see all of their customers’ spending activities.

Cash management: Consumers are constantly thinking of their cash flow and looking for better deals and offers. They want to be able to check at any time if money has been received, if payments have gone out and if they have sufficient money to make a purchase. They expect their money to move real time and at no cost. Providing consumers with information on spending patterns, giving them access to specialized discounts based on those patterns and forewarning of under- or overspending are services that financial consumers would highly value from their banks.

Personalized experience: Consumers recognize that a bank knows more about them than any other retailer, and they are expecting services tailored to their unique needs and wants. It is no longer acceptable to maintain an anonymous banking relationship. Knowing each consumer should lead to personalized offers, treatment and services.

Wealth building:  The desire for banks to provide wealth-building advice is a significant cross generational, income and geographical trend. Yet most consumers do not consult banks about financial decisions, preferring do to their own research or talk with friends and family. The move toward digital technology is driving widespread opportunities to develop lower cost, regulatory compliant financial advisory services that, with predictive modeling, will enable banks to capture higher wallet share.

For a majority of financial consumers, these top wants are not yet being met. The dissatisfaction rate among financial consumers is high. As much as half of financial consumers would consider switching to a new competitor or alternative bank, especially one that could deliver rewards. The switching-propensity rate for financial consumers due to poor service is twice the average for other industries. Consumers still want face-to-face and person-to-person interaction, so delivering a consistent, omni-channel consumer experience in the digital era is critical.

Fast movers have the opportunity to rapidly capture market share. Now is the time to innovate and deliver new services while building customer intelligence to take advantage of the fast growing trend toward digital consumerism in banking.