Global banking outlook 2014-15
Customer relationships: refreshed/restored
The global focus on greater consumer protection, through legislation and regulation, will change the way banks interact with customers, sell products, reward staff and deal with complaints.
Many banks that have tried to be all things to all customers will find that promise difficult to keep. Although no business likes to turn away customers, some institutions may focus only on those customer segments where they have a clear competitive edge.
Percentage of customers willing to provide their bank with more personal information
Source: EY/Financial Times survey on structural reform of European banks, 2013.
For products and services, an increased customer focus translates to more personalization and more transparency about rates and fees.
In our 2012 global consumer banking survey, 70% of respondents were prepared to share more information than necessary for compliance if it resulted in better service.
The digital difference
Banks have been relatively slow to embrace “digital first” strategies for customer interaction. Yet as customers experience the difference that digital solutions make in transactions with firms from other industries (such as aviation and telecommunications), they will force banks to follow.
Data analytics is a key area for improvement. Banks have a unique view of their customers, but many lack the capabilities to turn this into a competitive advantage.
Complaint resolution is another area digital can make a big difference. Improving effectiveness in this area will boost customer retention.
Above all, data privacy and the security of personal information are key concerns for customers. Banks must convince customers their data is handled with care at all times.
Considerations for business customers
Aspects of the regulatory agenda, designed to reform bank structures, will have an inevitable impact on business customers, particularly those that require products and services from both sides of a potential ring-fence. Many business customers don’t expect a single institution to meet all their needs and prefer to select best-in-class providers.
The decisions banks make on booking models, legal entity strategy and location strategy must incorporate both regulatory requirements and the evolving expectations and aspirations of their business and corporate customers.
Customers as collaborators
Banks have the customer base and loan origination and credit risk management skills, but many lack the funds to lend to that base or a balance sheet that can hold those loans to maturity.
We expect to see more examples of banks collaborating with asset managers, as well as helping smaller companies secure funding from debt and equity capital markets.