EY - 2014 Global Commercial Banking Survey

Global Commercial Banking Survey 2014

Advancing service in a digital age

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Our first global commercial banking survey finds that successful banks will be those that execute and innovate to raise their market penetration and share of wallet in spite of flat markets.

With rising costs including the burden of regulatory compliance, it is more important than ever to focus on strengthening customer relationships to find new sources of growth and protect against increasing competition from banks and non-traditional entrants.

Our survey reveals ways to better serve bank customers with a continued investment in digital technology. Highlights include:

Mid-market customers are heavy users of digital channels

3 distinct customer segments

We identified three distinct global customer segments based on strategic growth priorities, product usage, digital adoption and potential returns to the banks.

  1. “Increasingly Internationals”
    Companies with cross-border ambitions, high digital adoption and an increasing need for a wide range of banking products and service
  2. “Traditionalists”
    Smaller, primarily domestic companies that tend to use fewer products and are slower to adopt new banking channels
  3. “Diverse and Dynamics”
    Companies with wide-ranging strategic goals; when examined through the lens of technical savvy, their common priorities and drivers for bank selection and channel preferences become more apparent.

Eight in 10 commercial customers are using online banking each week, and almost seven in 10 are using mobile banking weekly. Digital leaders must be able to not only deliver new features and functionality but, just as importantly, demonstrate a sustained commitment to ensuring customers’ security.

Our survey shows that customers want:

  • Enhanced security (59% of respondents)
  • Transaction tracking (44%)
  • Electronic signature and submission (40%)
  • Instant message support (39%)
  • Video support (26%)

Security is the #1 barrier to adoption

When asked about reasons for not using online and mobile channels more often, the most commonly cited concern was security. Banks that succeed in reassuring customers about the safety of their platforms will remove a primary impediment to further digital growth.

The top concerns cited include:

  • Security (49% of respondents)
  • Slow speed (31%)
  • Poor functionality (26%)
  • Difficult to use (22%)

Commercial banks must fend off new competitors

Our results show that 53% of customers are already using non-banks, and 38% would consider doing so.

In addition to the more established alternatives to banks, such as credit card and insurance companies, new entrants are contributing to altering patterns in bank loyalty and switching service providers.

Banks must continue to fend off these diverse competitors, which are seeking to win portions of commercial customers’ banking business.

Banks must be proactive about error resolution

Nearly one-third of all customers experienced an error in the last two years, and 57% were less than highly satisfied with the resolution. Better performance in this area could help to reduce customer attrition rates.

Overall, companies in the Americas tend to have higher satisfaction levels, and companies in developed Asia-Pacific regions are less often highly satisfied with their banks’ responses.

First impressions count

Once a bank has convinced a customer to switch providers, it needs to make sure that the customer’s first experience is positive. Unfortunately, this is often not the case. Almost half of those surveyed (46%) describe this first experience with their bank as a frustrating one.

For banks to avoid souring relationships from the outset, these processes must be made less cumbersome for customers.

Banks face the challenge of adapting quickly to heightened competition, rapidly changing technology and increased regulatory scrutiny in the current environment. As the needs and preferences of mid-market customers become increasingly heterogeneous, banks must continue to evolve to avoid falling behind.

Service model strategies

A three-tier service model strategy can help banks meet their customers’ unique needs efficiently and effectively.

  1. Dedicated banker
    • Named senior relationship manager for each account
    • Access to and support from experts and specialists (in debt and equity capital markets, for example)
    • Digital and self-service channels
  2. Commercial access
    • Junior "generalist" relationship manager for each account
    • Support from pool of highly trained commercial bankers, credit managers and risk officers
    • Digital and self-service channels
  3. Access plus
    • Branch, digital and self-service channels are foundation
    • No relationship manager support for day-to-day interaction, but access to branch personnel when necessary

Survey respondents by country and region

EY - Global Commercial Banking Survey 2014 chart

For more survey results, download the Global Commercial Banking Survey 2014.