Canadian banking outlook 2014
Evolving needs of Canadian retail banking customers
A recent EY study found that retail banks around the world are increasing their focus on their customers, and Canadian banks are no different. Banks are clear that without a well-thought-out and sustained focus on their customers’ evolving needs, they will not be successful. In this environment, understanding customer behaviour, attitudes and requirements are key contributors to delivering an improved share of wallet and profitability.
In our first Canadian survey of retail banking customers, which follows on our 2012 global banking customer survey, we explored the views of approximately 2,500 banking and credit union customers.
Overall, we found that customers are happy with their primary financial institution, with results from our survey indicating that approximately 70% are very satisfied with their primary bank or credit union. As such, our survey findings clearly demonstrate that Canadian financial institutions can be justifiably proud of the level of satisfaction and loyalty they’ve succeeded in achieving with their customers.
However, our survey highlighted some important findings for institutions to focus on in order to do better. We believe the single most important action these institutions need to take in order to differentially enhance the retention and growth of their customers within the highly competitive Canadian retail banking marketplace is to improve the customer experience. Based on insights gleaned from our survey, we believe there are three key areas financial institutions should focus on that will have the biggest impact on improving the experience of their customers:
- Building on the basics: Our survey made it clear that if the fundamentals of banking services go wrong, customers’ interest in switching rises considerably. In particular:
- Inability to secure data — 87% of respondents would switch providers if their bank failed to secure their data.
- Poor issue resolution — 85% of respondents would likely switch if they had to contact their bank multiple times for issue resolution.
- Onboarding errors — 70% of respondents would likely switch if errors were made during their onboarding process.
- Putting the personal in personal banking: Uniform, “one size fits all” banking experiences are no longer in line with customer expectations, so banks that fail to adapt their business models will see declines in customer satisfaction and increased attrition.
- Changing the channels: While the branch remains the key channel for advice and purchases, the ability to move seamlessly from one channel to another is becoming increasingly important. According to our survey, 47% of respondents would switch to a bank that would provide the ability to start a product purchase in one channel and complete it in another.
It’s clear from our findings that customers want more from their banks. How do banks respond to this? Banks will need to reconsider how they interact with their customers and put the customer at the heart of all their thinking.