Digital Banking Set to Take Over Branch Networks by 2015 - Survey
Digital banking is set to overtake branch networks as the main way customers interact with their bank by 2015, according to a survey of 3000 banking customers in nine developed markets carried out by PriceWaterHouseCoopers.
Most consumers are willing to pay up to £10 a month for digital banking services if they believe they offer convenience and value, according to the survey.
The research shows that there is customer demand for innovative digital offerings such as social media notifications, an electronic wallet for loyalty cards and financial tools provided by banks and that these are the products consumers are most willing to pay for.
In the UK, almost two thirds (65%) of respondents said they are willing to pay just over £4 a month for their bank to store loyalty card information and convert accumulated points into cash. This amounts to an annual fee income for banks of approximately £50 per customer.
Stephen Whitehouse, retail and commercial banking partner at PwC, said:
“Banks have generally been slow to embrace the digital innovation customers now expect from other industries, such as retail or travel. This needs to improve if banks are to hold on to their existing customers and attract the next generation, as the quality of a bank’s digital offering will become an increasingly important factor for consumers.
The research reveals that more and more consumers are using online and mobile channels to access financial products. 69% of those surveyed said they currently use the internet to purchase financial products. While a lower number of respondents (33%) currently use mobile to purchase financial products, mobile banking is expected to follow a similar usage curve to internet banking, with China, India and the United Arab Emirates currently leading its adoption.
In terms of customer profile, it is not surprising that Generation Y2 (born in the 1980's and 1990's) leads the way, with 67% of respondents saying they currently use or are considering using mobile channels for banking. Matt Hobbs, retail and commercial banking partner at PwC, said:
“Generation Y are now choosing their main banking provider and represent an important source of future value for banks. Banks need to take their digital products to the next level if they want to secure these customers as they expect a rich digital experience that is both mobile and social and integrates their banking needs with their digital lives. If banks are too slow off the mark, they risk being overtaken by new entrants or non-traditional financial services providers, who already place digital at the heart of their offerings.”
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