One in four UK banking customers say they will avoid local branches for a digital-only experience, according to new research from analytics leader SAS.
The research finds that, accelerated by the pandemic, the shift in banking digitisation has dramatically changed the way UK customers bank. More than one in eight (12.7%) of all UK banking customers started using a digital service or mobile app for the first time since the pandemic: around seven million people.
The shift is far from temporary. Of all those now using digital banking services, nearly one in five (18.7%) anticipate using digital service or mobile app in addition to in-person physical interactions, with over a quarter (26.5%) intending to make digital a permanent replacement for in-person physical interactions.
Opportunity knocks to use these new stores of digital banking data to bring customers the personalised, human interactions that made in-person banking so trusted in the past.
Banks have moved quickly to welcome customers online
Digital banking may be a mature industry in the UK, but banks have delivered significant improvements in customer experience over the last year and a half, according to the research. This has increased customers’ willingness to share personal data with organisations.
Successes are clear; only 15% of respondents felt customer experience had got worse during the pandemic, while 14.5% said customer service had been faster and more efficient. The same percentage felt offers were more targeted and frequent, and 20.7% said it is now quicker and easier to make purchases online and in-store.
The research suggests that banks must demonstrate how they are using data to improve the customer experience, thereby encouraging customers to share even more personal data. Overall customers are more willing to share personal data since the pandemic by a margin of nearly 14%. More than one in 10 (11.8%) of participants said they would be willing to share data if it means better customer experience. This could be through faster easier transactions, or offering well-timed, helpful shipping updates through the use of advanced analytics. A similar percentage (12.1%) would be more willing to share if they were rewarded for doing so - e.g. via rewards, discounts or personalised offers.
Banks that maximise trust through careful data management and excellent personalisation of services are best placed to benefit from more data sharing so they can create even more personalised customer experiences. However, this is only possible with the appropriate analytical technology, which will empower companies to always deliver the ‘next best action’ and, where necessary, respond in real time.
The risk is high for banks that fail to meet expectations
While there are opportunities for banks that get the customer experience right, there are risks for those that don’t. Across all industries, over 50% of UK customers said they were prepared to switch provider after just one or two bad experiences.
Fraud also remains a blight on the UK banking industry. Almost two-thirds (61.8%) of all those surveyed, cross-industry, are now either more vigilant when it comes to fraud or have experienced it personally. It falls on banks to protect customers’ digital identities as face-to-face banking fades into history, and interactions increasingly take place online. Guarding against fraud is key. Advanced analytics running in the background is the best way to achieve this personalisation, while still maintaining a frictionless customer experience.
The opportunity to impress customers online must be seized
Banks have a huge opportunity to understand and serve customers better thanks to the uptake of digital banking services, greater awareness of benefits such as a more streamlined, personalised service, and an increased willingness to share personal data.
“The insights that can be gained from data produced by each digital interaction are the key to delivering highly personalised and rewarding customer experiences. Customers are increasingly aware of this; they want the benefits of a seamless digital experience and, as a result, are becoming more willing to share personal data,” explained Johnny Steele, Head of Banking, SAS UK & Ireland.
“Banks need to leverage advanced analytics and AI to deliver intelligent banking services at the point of need. Failure to deliver these timely and meaningful interactions could be very costly, as customers are expressing a willingness to switch providers after only a few bad experiences.”
Read more about how customer expectations have changed across industries during the pandemic, and what organisations can do to meet them, by reading SAS’ research report Experience Disrupted: Is COVID-19 continuing to change customer behaviour?
Methodology
Research was conducted and statistics compiled for SAS by 3Gem. Consumers completed an online questionnaire during 2021 across a number of markets (UK, Germany, Italy, France, Spain, Netherlands, Poland, Sweden, Greece, Saudi Arabia and South Africa) adding up to a global sample of 10,000 adults over the age of 18. There were 1,000 UK respondents.