Retail Banks are Losing the Race to Challenger Banks
Capgemini surveyed over 7,900 retail banking customers from 20 countries and sought responses from more than 50 banks for the report, which found banks have the right products, but they are lagging behind and giving ground to non-traditional players in the last-mile customer experience, ie what customers see and remember.
Anirban Bose, CEO of Capgemini’s Financial Services Strategic Business Unit, says: “Bigtech and challenger banks are capturing the last mile of the banking value chain by swapping the conventional rulebook for offerings designed around customer needs.”
The survey found that 75% of tech-savvy customers are currently using at least one financial product from a BigTech firm.
The WRBR notes that the top three reasons customers say they turn to financial products from non-traditional players include lower costs (70%), ease of use (68%), and faster service (54%).
As non-traditional firms prioritise customer pain points, payments, cards, and banking accounts are the most vulnerable to losing customers to these new-age entrants.
The WRBR says banks can address these challenges by partnering with fintechs to focus on the customer overall financial wellness, rather than discrete banking products.
Says Bose: “Banks that identify their top capabilities and then seek partnerships with FinTechs and other business sectors to enhance their offerings in other areas will be the most successful.”