The customer takes control – power in banking relationships shifts dramatically
Tuesday 3 July 2012 — Australian consumers are taking control of their banking relationships and expect to be able to choose between a range of service levels and costs according to new research from EY’s 2012 Global Banking Customer Survey.
The survey of 28,560 retail banking customers across 35 countries, including 1,000 in Australia, highlights that banks around the world need to develop a greater focus on their most vital stakeholder group – their customers.
- Only 39% of Australian customers believe their bank adapts products and services to meet their changing needs and 72% of Australian consumers would give banks more personal information if it improved service levels
- More than half of Australian retail banking customers are using two or more banks
- 63% of Australians still seek advice on banking products and services from their family or friends, but comparison websites are now the second most common source of information (50%)
Paul Siviour, EY’s Oceania Banking and Capital Markets Leader says, “Customers are sending the banks a very clear message – we are taking control.”
“In response, banks need to re-evaluate consumer trends to prioritise products, enhance services and, ultimately, give customers what they want,” Siviour says.
Customers want to play an active role in tailoring products and services
Only 39% of Australian customers surveyed thought their bank adapted the products and services it offered them to suit their changing needs over time, below the global average of 44%.
“Interestingly, 72% of Australian customers also said they would be willing to provide their bank with more personal information if it resulted in tangible improvements to the suitability of products and services they were offered. This is on par with the global result (70%) and illustrates the importance of adopting a tailored, customer-focused approach.
“Banks have an opportunity to build on customers’ willingness to provide them with more information, but should note that customers want to do this on their own terms,” Siviour says.
“Half of Australian consumers surveyed said they wanted to be able to update information at their discretion or when their circumstances changed. The banks need to let customers decide how this process works, not the other way around.”
Multi-banking is commonplace
More than half of Australian consumers (56%) are already using two or more banks. Globally, multi-banking is also increasing as customers search more actively for the best rates and products with 69% of customers now using two or more banks, up from 59% in 2011.
The most common reason cited by Australian customers for using more than one bank was to ensure the best rates or fees for each product (38%).
Price was also the primary driver of customer satisfaction, with 35% of Australian consumers listing fees and charging structures as an area their bank could improve on to increase satisfaction, compared to just 22% globally.
“The banking environment is changing and Australian banks are facing increased competition from non-traditional entrants to the market, such as technology companies and telcos,” Siviour says.
“Our research found that Australian customers would consider using a non-traditional financial provider for some or all of their banking services if they could offer lower fees (60%), better rates (57%), tailored products (46%) or a more personalised service (31%).
“The new market entrants are leveraging technology, social media and more agile business models to differentiate themselves from the traditional players and consumers are clearly starting to take notice.”
Customer advocacy is becoming a dominant force “In an increasingly connected environment, word of mouth is gaining greater influence than ever before and customers are listening to each other more than their banks or financial providers.
“63% of Australian retail banking customers say they seek advice on banking products and services from friends, family or colleagues, compared to 71% globally,” Siviour says.
The research also found that comparison websites are now the second highest source of information on banking products and services, with 50% of Australians using them.
“The views of online communities are also gaining importance. The use of social networking as a source of banking information (by 44% of customers globally and 20% in Australia) is amplifying customers’ voices further, giving them greater power as advocates or critics.”
“The research clearly shows that understanding consumer attitudes, demands and behaviours is more vital than ever. Australian banks need to start redefining the customer relationship if they want to remain relevant in this rapidly changing environment,” Siviour says
“The future of banking will require a shift in mindset to better address customer needs, provide greater flexibility, and help customers shape their banking experience.”
Notes for editors
A copy of the full EY 2012 Global Banking Customer Survey report is available on request.
About the survey
This research was conducted between February and March 2012 using an internet questionnaire.
A total of 28,560 participants were surveyed, comprising of 13,001 in EMEIA (500 Belgium; 500 Czech Republic; 1,000 France; 1,000 Germany; 500 Greece; 500 Hungary, 1,000 India; 1,000 Italy; 500 Netherlands; 1001 Nordics; 500 Poland; 500 Portugal; 1000 Russia; 500 South Africa; 1,000 Spain; 1000 Turkey; 1000 UK), 3,002 in North America (2,002 US; 1,000 Canada), 4,548 in Latin America (500 Argentina 1,019 Brazil; 504 Chile; 500 Colombia; 1,023 Mexico; 500 Panama; 502 Peru) and 8009 in Asia-Pacific (1,000 Australia; 2,004 China, 502 Hong Kong; 1,001 Indonesia; 1,002 Japan; 500 Malaysia; 500 Singapore; 1,000 South Korea; 500 Vietnam).
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