The Customer Experience in Banking has “Stood Still” for Five Years
FintechOS, the global technology provider for banks, insurance and financial services companies, today revealed new research that shows 63% of UK consumers believe the customer experience (CX) in banking has “stood still” for five years. After better financial terms, consumers will switch banks in pursuit of a better customer experience, especially Gen Z (18-24 years old) and Millennial (25-39 years old) generations. The data comes from a survey of 1,000 UK consumers in November 2020.
CX has “stood still” in banking for the last five years
- Nearly two-third of respondents (63%), across all generations, believe the banking customer experience has stood still for five years.
- Gen Z was the most positive group. 45% of Gen Z respondents said the banking CX had improved in the last five years, vs just 24% of Baby Boomers (56-74 years old).
- 10% of Baby Boomers also thought the banking CX had got worse in the last five years.
Consumers will switch for a better customer experience
- After better financial terms (33%), consumers will switch banks in pursuit of a better customer experience (17%). This rises to 25% for Gen Z and Millennial generations, highlighting the growing importance of CX for younger generations. Why?
- The arrival of digital-first banking providers has dramatically changed consumers’ expectations around CX with but only for Gen Z (72%) and Millennials (54%).
- For Gen Y (40-55 years old) and Baby Boomers, the arrival of digital-first banks hasn’t altered their CX expectations. These generations care more about getting the best-priced service (44%) over a great customer experience (31%).
Loyalty, responsiveness, and personalization tops the list of frustrations
- Consumers are loyal to their banking provider (7.5 years on average), but they’re frustrated that they aren’t rewarded for this loyalty.
- 45% of all respondents say not being rewarded for loyalty is the aspect of CX that needs improving most urgently.
- And 46% of consumers vented frustration with responsiveness, saying “I’m simply not willing to wait or queue to access services” which rose to 61% for Gen Z consumers
- And a quarter of consumers (25%) “expect personalized services” and expect “guidance and advice specific to them” from their bank.
Consumers are sympathetic around Covid-19—but that doesn’t mean they won’t leave
- When it comes to the Covid-19 pandemic, 69% of consumers believe their banking CX has remained the same during this time.
- When asked if they agree with the statement “The Covid-19 pandemic has changed how people want to access and use services and it’s inevitable that it will take time for the customer experience to improve” 57% of Gen Z consumers agreed, demonstrating sympathy.
- Although they are sympathetic, this doesn’t mean they’ll stick around—62% of Gen Z respondents said that the pandemic has made them more likely to switch providers.
- Baby boomers are least sympathetic, with only 39% agreeing with the statement. But ironically, they’re most likely to stick with their provider given the pandemic (70%).
“As if a decade of razor-thin margins and reputational issues weren’t enough, the mix of challenges facing banks – from regulation to technology debt – makes it easy to see why so many now voice a commitment to improved customer experience as a legitimate differentiator in an increasingly competitive environment,” said Teo Blidarus, Co-Founder & CEO at FintechOS. “Critical to delivering a great customer experience is data and insight. Banks need to understand what their customers want and how they behave before they can hope to deliver a customer experience they will love. Each generation from Gen Z to Millennials to Gen Y and Baby Boomers think and act differently, and the customer experience must be tailored to their specific wants and needs.”