Retail banks are facing pressure to transform as new entrants focused on customer experience gain significant market traction, according to the World Retail Banking Report 2020 published by Capgemini and Efma.As the pandemic environment is moving consumers to interact more digitally with their banks, platform models offer agility and scalability during uncertain times. The report found that platform-based banks find it up to two-times easier to increase operating profits, unlock new sources of value and improve operational efficiencies.
The report shows that the global financial sector is in the midst of a historic transformation as nimble, digitally native non-traditional players continue to champion customer experience and redefine long-held principles to gain significant market traction.
With over half (57 per cent) of consumers now preferring internet banking, up from 49 per cent pre-Covid-19 and 55 per cent preferring banking mobile apps compared with 47 per cent previously, the stakes have risen further as the Covid-19 context continues to move consumers towards digital banking.
“Traditional banks are being challenged to meet these expectations given that digitally native new entrants focus on customer experience from day one,” said Anirban Bose, CEO of Capgemini’s Financial Services and Group Executive Board Member.
“Banks that invest now in modernising their core technology and evolve it to a platform-based experience will simultaneously delight customers and grow profitably,” he said.
CEO of global non-profit organisation Efma John Berr said Covid-19 has put a spotlight on the digital banking experience. “The modernisation of legacy systems must be prioritised by banks looking to accelerate their growth as customer expectations are ever-increasing and those that neglect this risk falling behind.”
The World Retail Banking Report 2020 draws on research insights from the 2020 Global Retail Banking Executive Survey, executive interviews and the Capgemini Open X Readiness Index. The report includes insights from focused interviews and surveys with over 80 senior executives of leading banks across regions.