Γιώργος Γιαλιτάκης
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The document discusses the acceleration of digital banking due to the COVID-19 pandemic. Some key points: - Branch usage declined 35% on average over 5 years among all age groups, while digital interactions rose 15% due to temporary branch closures and fears of in-person contact. - Younger generations are more likely to use digital banking and have less brand loyalty, with millennials and Gen Z being the most likely to switch primary banks. - Banks plan to enhance customer experience through improved data analytics, customer service, mobile apps, and chatbots to better compete in the digital space. - Digital banking provides convenience but fails to build strong emotional connections like in-person banking, so banks must make digital
Γιώργος Γιαλιτάκης
- 1. Digital Banking, Acceleration and Challenges April 2022
- 2. © 2022 Deloitte Central Mediterranean. All rights reserved. Covid-19 Lead to a New Digital Normal Sources: Deloitte’s 2021 Digital Banking Consumer Survey; The Deloitte Center for Financial Services Global Outlook Survey. Across all age groups, the share of Americans who did not use financial services online fell by over 30 percent Temporary bank branch closures and fear of high- contact surfaces have pushed customers to online or mobile banking Mortgage, Consumer loans and advice on banking products remained the most branch loyal services Across all age groups, branch usage declined on average -35 percent over the previous five years, and the number of digital interactions rose by 15 percent The foundation of the banking ecosystem has greater incentive now more than ever to reorganize around digital From simple payment transactions to obtaining advice on their finances, all types of services began to be used online for the first time ACCELERATION DUE TO COVID -19 COVID-19RESULTS IN BANKING -24% -34% -44% -48% 19% 15% 11% 13% % CHANGE IN QUARTERLY CHANNEL USAGE BY AGE GROUP (2015 - 2020) Branch Digital 18-34 35-49 50-64 +65 Digital Banking, Acceleration and Challenges 2
- 3. © 2022 Deloitte Central Mediterranean. All rights reserved. 63% 60% 53% 42% 41% 41% Customer Data Analytics Customer Service New alternative data Upgrading mobile apps Chatbots In-branch technology Enhancements banks plan to make to improve retail and institutional customers’ banking experience 20% 28% 16% 6% 1% Gen Z Millenials Gen X Boomers Matures Likelihood of retail banking respondents to switch their primary bank Series 1 Sources: Deloitte’s 2021 Digital Banking Consumer Survey; The Deloitte Center for Financial Services Global Outlook Survey Flight Risk Empowering Customers Digital Interactions, while easy and convenient, fail to forge emotional connections. Younger Generations, who tend to used digital channels the most, typically have less brand loyalty. Digital Banking Consumer Survey revealed millennial and Generation Z respondents were more likely to switch their primary bank Compared to older consumers. While branches should remain the primary channel to forge deeper relationships, making digital banking channels, such as chatbots, more responsive and empathetic like humans, could differentiate in crowded digital world. In Banking, customers experience is typically owned by the lines of business, digital and customer service functions. Marketing should work with the functions to provide insights on the human/ emotional aspects of customer behavior and the market relevance of those insights A New Risk on the Horizon Digital Banking, Acceleration and Challenges 3
- 4. © 2022 Deloitte Central Mediterranean. All rights reserved. Quick and seamless onboarding Driven by touchless technologies, including face scanning and document recognition, done end to end in 3-5 minutes Integrated management tools Backed by dashboarding capabilities on web and mobile apps, giving a full view of customers' finances Goal-based sub-pockets That allow customers to organize their money as they wish Real-time spend notifications As transactions occur that can be personalized as needed Advanced access and security To help prevent lockouts and aid in easy recovery via biometric login features 01 02 03 04 05 Table Stake Digital Banking Features Basic spend insights offered via spend analytics dashboards that are intuitive, customizable, and easy to use for personal finances 06 Digital Banking, Acceleration and Challenges 4
- 5. © 2022 Deloitte Central Mediterranean. All rights reserved. Satisfaction Emotional Connection Satisfaction is relative Banks’ ambitions for digital experiences have traditionally been to replicate in-person interactions, making purchasing and servicing journeys available online. This approach delivered an experience familiar to what clients were used to in branches but lagging other industries, which used digital to re-imagine the experience. Builds Relationships Banks should focus on how they make their customers feel. Banking should become more human, and banks are now moving beyond product enablement to deliver a digital proposition that elicits trust through intimacy, relevance, and perceptiveness. They should focus in providing quality, convenience and value via an exceptional digitally driven consumer experience areas where digital service providers like Apple, Google Amazon outperform Customer Customer Satisfaction vs Emotional Connection Digital Banking, Acceleration and Challenges 5
- 6. © 2022 Deloitte Central Mediterranean. All rights reserved. Banking Ecosystem Banks 1 Fintechs 3 Bigtechs 2 Banks should try to collaborate with both. Bigtechs have access to unique customer date and enhanced ability to generate insights powered by cloud and advanced analytics. Fintechs can be more eager to engage as enablers to strengthen under served segments Fintechs have become more mature and mainstream; they have firmly established themselves while growing their influence in unforeseen ways. Bigtechs have the unique distinction of inspiring both awe and anxiety among banks which complicate the decision on when to compete and when to collaborate Ecosystems are Continuously Expanding Digital Banking, Acceleration and Challenges 6
- 7. © 2022 Deloitte Central Mediterranean. All rights reserved. 03 01 02 Banks have a unique opportunity to influence stickiness and strengthen relationships Banks should capitalize on the momentum in the use of digital self-service channels and try to elevate customer experience with innovative blend of human and digital features Younger Consumers demonstrate preferences for both physical and digital channels However, they are less satisfied with their primary banks and they are also at a higher risk of switching. Generally, they are also more open to financial products from digital –only banks and large technology companies Pandemic is still reshaping banking preferences and behaviours Digital Banking – perhaps for the first time- may be contributing to overall satisfaction with banks, which still remains quite overall robust Key Takeaways Digital Banking, Acceleration and Challenges 7
- 8. © 2022 Deloitte Central Mediterranean. All rights reserved. • Removal of questions of outdated functionalities • Question that in most banks are default • Merging or clarifying questions • Accessibility and inclusion • Remote advisors • Ecosystems • E-commerce • Investing Sources: Deloitte’s 2021 Digital Banking Consumer Survey; The Deloitte Center for Financial Services Global Outlook Survey POTENTIAL NEW AREAS / FUNCTIONALITIES POTENTIAL CHANGES TO CURRENT QUESTIONNAIRE Functionalities UX • UX Banking Playbook • Virtual Data Room • Global community • International collaboration • Collaborative design of methodology • Most outstanding user flows, made better BEST BANKING UX PRACTICES COMPENDIUM ACCELERATOR FOR FINANCIAL INDUSTRY DESIGN 2022 Digital Banking Maturity survey is launched Digital Banking, Acceleration and Challenges 8
- 9. © 2022 Deloitte Central Mediterranean. All rights reserved. Italy Luxemburg Netherlands Norway Poland Portugal Romania Russia Serbia Slovakia Slovenia Spain Germany Greece Hungary Ireland Czech Republic France Belgium Bulgaria Croatia E U R O P E Peru Uruguay Canada Mexico N O R T H A M E R I C A Argentina Chile Colombia S O U T H A M E R I C A DBM2020 covered 39 countries; in 2022 we aim to go global and include key world markets, e.g., USA, India, Brazil, China A U S T R A L I A Kuwait Qatar Saudi Arabia United Arab Emirates Singapore Sweden Switzerland Turkey United Kingdom A S I A Japan Digital Banking, Acceleration and Challenges 9
- 10. © 2022 Deloitte Central Mediterranean. All rights reserved. Will you drive the changeor be drivenby it? Feel free to reach us for more information: GeorgeGialitakis Senior Manager Core Business Operations Consulting ggialitakis@deloitte.gr © 2022 Deloitte Central Mediterranean. All rights reserved. Digital Banking, Acceleration and Challenges 10
- 11. Thank you!
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