Ernst & Young (EY) have released the findings of their global commercial banking survey called ‘Advancing service in a digital world’ which outlines what banks should be doing to better serve customers.
According to the survey, which identified what services banks should be providing to customers, banks must raise their market penetration by increasing the market share of their products and must also partake in share of wallet (SOW), which is the amount of the customer’s total spending that a business captures in the products and services that it offers. A cheaper way of boosting revenue is for companies to increase the share of a customer’s wallet that they receive, rather than increasing market share. Due to rising costs and a larger focus on regulatory compliance, it has become increasingly important for banks to focus on strengthening customer relationships in order to find new sources of growth and protect against competition from other banks and non-traditional financial services.
Statistics show that 8 out of 10 commercial customers are using online banking and 7 out of 10 are using mobile banking on a weekly basis, but security is still a concern. 59% of the survey respondents said that enhanced security would be beneficial, 44% wanted transaction tracking and 40%, electronic signature and submission.
49% of respondents stated that security was an issue for them and slow speed (31%) and poor functionality (26%) were also major drawbacks for customers who were reluctant to make the transition to online banking.
Paul Battista, EY’s Canadian Financial Services Advisory leader explains that because banks operate under strict regulations, “non-banks are taking advantage of their lighter regulatory burden to expand their financial service offerings.”
“These providers can’t replace traditional banks, but executives are increasingly turning to them for a wide range of products and services,” Battista said.
46% of customers also describe their first experience with their bank as a frustrating and in order for this to change, processes should be made less confusing and banks should be adaptable to change in technology and new regulations.
Battista concludes that “the banks that succeed will utilise advanced analytics to both reduce the risk of customer errors in their processes as well as enhance the personalisation of commercial banking products and advice.”
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