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PARIS–(BUSINESS WIRE) –Retail banks face the choice of aligning their offerings with customer expectations or running the risk of losing those customers altogether, says the Global Retail Banking Report 2021 (WRBR) published today by Capgemini and Efma. As the economic fallout from COVID-19 continues, the post-pandemic disruption has sparked a new era of customer-centric banking, which the report calls Banking 4.X. To be successful in Banking 4.X, banks must embrace digital transformation and implement cloud-based Bank as a Service (BaaS)1 platform models, which use APIs2 to integrate banking into daily life, making it more accessible and inclusive for banking customers.
Over the past 10 years, the neo-3 and the challenger banks have attracted more than 39 million customers. The report finds that currently 81% of consumers said easy access and flexible banking would motivate them to switch to a new-age financial service provider, instead of their traditional bank.
Meanwhile, many traditional banks are looking to retain and grow their customer base and have already embarked on their journey of digitization and cost optimization as the COVID-19 pandemic has forced them to dramatically step up their efforts. Additionally, retail banking customers facing pandemic realities now expect fully digitized on-demand experiences, hyper-personalized services and 24-hour support. However, among those surveyed, 46% of bank executives say they don’t know how to embrace an open bank, orchestrate ecosystems, and become a truly data-driven organization. These actions are essential components of the new way of doing banking, identified by Capgemini as Banking 4.X4.
“By overcoming outdated mindsets and embracing banking as a service, financial institutions will go beyond their core banking products, create new offerings and deliver personalized experiences to their customers.” says Anirban Bose, CEO of Capgemini Financial Services and member of the Group Executive Board. “Banks need to focus on how they can add value to their customers to retain and engage them. Thanks to the platform and the exploitation of data, banks can better meet the needs of modern customers and create new sources of revenue. “
The platform defines a new era for the industry
Incumbent banks can unlock new value in open ecosystems through BaaS platforms, which provide access to new data sources and monetization opportunities. Banks need to move quickly to experience-based, platform-based approaches that integrate banking and other services into consumers’ lifestyles. On a positive note, 66% of banks say they already use a BaaS platform, while 25% are in the process of developing one.
Incumbents have several strengths in their business that they can easily monetize (e.g. reports, KYC, licensing, transaction processing, connectivity to global systems, etc.). They can also call on a range of external providers to improve their offering and best meet consumer demand for a more integrated and personalized experience. Traditional banks have recognized that accessing the capabilities of their larger ecosystem is at the heart of their new journey, and 80% of banking executives said BaaS would help them cultivate open ecosystem synergies to innovate and create new ones. banking products and services. This will allow banks to bridge the gap between their current situation and the expectations of tomorrow’s customers, which will be magnified in the era of 4.X banking. This new way of doing banking will also allow banks to become more inclusive in integrating unbanked and underbanked segments of the population through on-demand, digital and easier-to-use channels.
“Banking and non-banking businesses have the opportunity to come together and provide better customer service ”. says John Berry, CEO of Efma. “These strategic partnerships enable new, creative offerings that reflect the lifestyle, needs, wants and even personalities of customers. Banks should focus on improving support, reducing the costs of banking products and services, and delivering sustainability initiatives. The future of banking rests on a solid digital foundation and a flexible attitude to innovation. “
Data-driven approach will prioritize hyper-personalization and ensure long-term growth
As the bank enters an era where financial services are integrated into the daily lives of customers, collaboration will be the path to success. BaaS offers unprecedented opportunities to collect data across ecosystems, with over 86% of consumers saying they would share their data for a better and more personalized experience. Incumbents must develop digital capabilities to harness these data ecosystems to create, maintain and increase value in the age of 4.X banking. Big banks will keep customers at the center of their transformation journey by tracking behaviors and sentiments through intelligent data analytics.
Banks must act quickly, however. The Capgemini and Efma report found that 61% of companies do not have a dedicated Customer Experience (CX) management team to set customer roadmaps. Banks can dramatically improve their customer experience by deploying a digital CX layer and reinventing branches as experience centers, to deliver a consistent and secure omnichannel experience across all touchpoints.
Methodology of the report
The World Retail Banking Report 2021 draws on information from two main sources: the Global Retail Banking Voice of the Customer Survey 2021 and the Retail Banking Executive Surveys and Interviews 2021. senior executives of major banks and non-bank companies in all the regions. To view the animated video of the report results, click here.
For more information, please visit www.worldretailbankingreport.com.
About Capgemini
Capgemini is a global leader in partnering with businesses to transform and manage their businesses by harnessing the power of technology. The Group is guided on a daily basis by its desire to release human energy through technology for an inclusive and sustainable future. It is a responsible and diversified organization of 270,000 team members in nearly 50 countries. Building on its 50-year heritage and deep industry expertise, Capgemini enjoys the confidence of its clients to meet all of their business needs, from strategy and design to operations, fueled by the rapidly changing world and innovator of cloud, data, AI and connectivity. , software, digital engineering and platforms. In 2020, the Group achieved global sales of 16 billion euros.
Get the Future You Want | www.capgemini.com
About Efma
A global non-profit organization created in 1971 by banks and insurance companies, the EFMA facilitates networking between decision-makers. It provides quality information to help banks and insurance companies make the right decisions to drive innovation and drive transformation. 120 financial groups in 133 countries are members of Efma. Based in Paris. Offices in London, Brussels, Andorra, Milan, Stockholm, Bratislava, Warsaw, Moscow, Istanbul, Beirut, Dubai, Tokyo, Singapore, Sydney and Montreal.
Find out more: www.efma.com
1 Bank-as-a-Service (BaaS) platforms facilitate the creation and exchange of value by allowing banks to share their core capabilities and data with third parties as consumable APIs.
2 APIs, which is the acronym commonly used for Application Programming Interfaces, are intermediaries that allow applications to interact with each other. Interfacing capability enables the store to share data and capabilities within an organization as well as with third parties external to the organizations.
3 Neobanks are financial technology companies that offer financial services only over the Internet and lack physical branches.
4 Banking 4.X is an optimized banking platform based on experience, resilient to financial and non-financial threats, built around long-term sustainable growth, and where human interactions evolve from service to advice.
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