67% of the Consumers Surveyed Have Switched to Digital and Become Open to Non-Bank Options

Research from the New Digital Demand in Retail Banking shows that integration of banking needs to be better equipped with a customer’s digital lifestyle. The service should be instant, integrated with social platforms, and most certainly, with data being the driving force.

In their latest report, Oracle has revealed the results of their survey which delved into a customer’s behavior, sentiments, and preferences on the banking facilities. The study prioritized the expectations of a consumer.

Oracle surveyed 5,200 respondents from thirteen countries. The study deep-dived into four elemental stages of digital customer banking. They were – bank account opening, transactions, mortgages and personal loans, and investment and financial management services.

Sonny Singh, SVP, Financial Services Business Unit, Oracle, stated, “Consumers have already made the switch to digital banking for its ease and convenience. While customers are generally satisfied with basic banking services, their satisfaction drops when attempting more complex transactions such as securing a loan. Banks today must provide a seamless customer experience or run the risk of losing out to non-banking alternatives.”

The Switch For Digitalization is Complete

Majority of customers have switched from traditional ways of banking such as visiting physical banking branches, to primarily online banking. They are now increasingly open to digital ventures on banking platforms.

• 81% of consumers are opting for digital channels to engage with their banks
• 69% of respondents want their financial lifecycles to be on digital channels
• Customers listed best returns and experiences as most important considerations across all four banking stages
• Consumers from India, China, Indonesia, and Brazil were found to be most open to trying digital ventures as opposed to consumers from other countries
• The US fell in between the stack as 7^th
• The look on “digital openness” proposes that banks operating in matured economies need to capitalize on digital banking lifestyle in order to win over customers

Minding the Gap: Fintechs Make Inroads in Traditional Banking Systems

Best returns, Trust and Experience are the top three factors while choosing a service provider. Though, when a customer goes in for business cycles, best rates and experience win the conquest over the trust. The digitalized expertise of new non-bank options make for attractive alternatives in comparison to that of traditional banking systems. To conclude, banks are now seeing an erosive force in their core business.

• One-third of consumers are looking for alternatives in the areas of personal finance and mortgage due to an unsatisfactory experience
• More than 40% of consumers feel that non-banking methods assist them on personal financial grounds as opposed to structured banking methods
• 66% of consumers’ state experience is a colossal factor while choosing banking and transferring services
• Consumers aged 20 to 52 prefer opening banking accounts through digital channels
• Young consumers aged 16 to 19 still prefer visiting physical branches for banking due to immediate acknowledgment in person and perhaps due to lack of experience

No Expectations of Brand Loyalty

The attachment to traditional banking methods is decreasing due to increasing digitalization. Retaining a bank’s current customer base is important so as to keep deliverance of value and provide a higher state of experience.

• 30% of those who have not tried a non-banking platform acknowledge that they are open to trying it
• 65% of banks are highly trusted as financial partners but lack in other areas, such as providing best rate of returns and failing to prioritize overall customer satisfaction
• Cryptocurriencies have been chosen as the top contender in non-banking alternatives, followed by wealth management/online personal finance apps, and digital independent fintech banks.

The future of banking due to the report is clear. Customers expect the Omnichannel experience wherein thorough services are catered despite the platform given. Embracing and accelerating performance is the ideal way to serve customers so as to obtain optimization within all financial sectors.