Global Consumer Banking Survey 2012 The customer takes control

Transcription

1 Global Consumer Banking Survey 2012 The customer takes control Key messages August 2012

2 Ernst & Young s Global Consumer Banking Survey 2012 The customer takes control This is Ernst & Young s latest survey of retail banking customers around the world. It builds on our previous global consumer survey in 2011 and our European survey in 2010, and examines the views of more than 28,560 banking customers in 35, gathered in March The survey places particular emphasis on answering the following questions: How likely are customers to change banks, and if so, why? Is customer behavior towards their banks changing, and if so, how? How are customers using different channels, and what do they expect from them? What is driving customers satisfaction, and what improvements do they want to see? What steps can banks take to enhance customer loyalty and advocacy? Global Consumer Banking Survey 2012 Results - The customer takes control 1

3 Essentially, survey results are telling us that customers are taking control of their banking relationships. Customers are taking control They are changing banks. They prefer turning to other sources other than their bank for financial advice and to find the best deals. They want to play an active role in tailoring their products and services. They want better value and improved service. They want to be able to choose between different products, channels, and service levels. Global Consumer Banking Survey 2012 Results - The customer takes control 2

4 Survey results Customers are increasingly likely to use other banks Attrition % of customers planning to change bank Multi-banking % of customers with one versus multiple banking relationships Why customers are changing banks Top reasons for attrition. % of customers +70% 3 or more banks 32% 50% High fees or charges 2 banks 37% Poor branch experience 30% Poor rates on accounts 7% 1 bank Lack of personalized contact/service Customers are becoming less loyal. The proportion of customers planning to change banks has increased from 7% to since Multi-banking is on the rise globally. Only one-third of customers have a single banking relationship. Sensitivity to fees and charges is the leading driver of attrition. Global Consumer Banking Survey 2012 Results - The customer takes control 3

5 Survey results and non-banking providers are gaining ground Provider preferences % of customers who use their main bank versus other providers for the following products Checking/current account Savings Personal loan Car loan Credit card Mortgage Investments Retirement Insurance products 19% 7% 28% 8% 19% 18% 17% 32% 11% 17% 22% 28% 18% 22% 60% 73% 72% As expected, the majority of customers turn to a bank when making product choices about checking accounts, savings and credit cards. Customers are increasingly likely to choose a non-banking institution for non-core products such as car loans, retirement and insurance products. Main bank Another bank Non-bank Global Consumer Banking Survey 2012 Results - The customer takes control 4

6 Survey results Customer advocacy and word of mouth is gaining power Sources customers turn to for advice Top sources valued by customers to keep them informed on banking products Interacting with the bank via social networks % of customers who use social networking to perform the following banking activities Friends, family and colleagues 71% Learn about products and services 4 Financial comparison sites 6 Access their account¹ 33% Financial advisor 60% Comment on the level of service 32% Media reports 57% Online network/communities 5 Share your budget and spending patterns 29% Competitor advertising 43% Share great banking-related offers 17% Customers prefer turning to other sources than their bank for financial advice and to find the best deals. Comparison websites, relatively unknown five years ago, are now a major source of influence The use of social media as a source of banking information is amplifying customers voices, giving them greater power as advocates or critics * In emerging markets - China in particular - many customers are accessing their accounts via social networking sites whereas this is uncommon in mature markets Global Consumer Banking Survey 2012 Results - The customer takes control 5

7 Customers want to play an active role in tailoring their products and services Survey results Tailored offerings % of customers who say their bank adapts the products and services to meet their needs Personal information % of customers willing to provide their bank more personal information Update frequency How often customers would be prepared to update their information for their bank 37% 4 70% Yes 4 When circumstances change Every six months 2 Every year 19% Yes No Not Sure 30% No 6% Only at the beginning of the banking relationship The majority of customers do not feel that products and services are customized to meet their needs. Only 4 of customers feel they are provided tailored offerings. Customers are embracing the benefits that come from providing personal information. 70% of customers are willing to provide more information in order to receive more personalized service. Moreover, a significant proportion of customers are willing to actively maintain their personal information with their bank. In return, they expect to receive tangible improvements in the suitability of products and services they are offered. Global Consumer Banking Survey 2012 Results - The customer takes control 6

8 Survey results They want the flexibility to shape the relationship, contacting their bank whenever and however they choose Channel preferences Preferred channel for different types of products, services and activities Advice on products and services by age group Access to account information 62% 55 and over 58% Advice on products and services Simple transactions 42% 47% % 29% 33% Complex transactions 71% Internet Branch Across all age groups, customers prefer online channels for simple transactions, but also demand high quality personal service for more complex transactions and advice. Internet Branch Interestingly, when seeking advice on banking products and services people aged below 25 only marginally prefer using a branch instead of the internet (33% versus 29%). Banks need to let customers personalize their distribution choices, with different cost and accessibility options. Global Consumer Banking Survey 2012 Results - The customer takes control 7

9 Survey results Customers want better value, improved access and less frustration Actions that would increase customer satisfaction % of customers listing the answer option as high priority Triggers of customer frustration Areas with the highest dissatisfaction % of customers being unsatisfied or very unsatisfied Changes to fees and charges structure Online banking/ mobile banking 22% 33% Transparency of fees Access to a branch Dealing with a life changing event Payments 9% 8% 8% 22% Contact bank to deal with an issue or ask for advice Products and services that meet requirements Fraud or lost/stolen card Complaint handling Call Centre experience Current account opening or closing Refinance application Mortgage application Appeal against credit refusal Change of your account details Adding Bill Payees Moving your account 7% 6% 3% 3% 3% 3% Not surprisingly, customers want lower fees and charges. Customers want to see improvements in current online and mobile banking experiences. Despite the increasing attention in the past few years, 1/3 of customers globally are dissatisfied or very dissatisfied with the transparency of fees. Contacting the bank is a frustrating experience to over of customers globally. Global Consumer Banking Survey 2012 Results - The customer takes control 8

10 Survey results and they believe that their loyalty should be rewarded Loyalty program enrolment % of customers enrolled in a bank loyalty program 18% +50% Globally, only 1 in 4 customers are enrolled in a loyalty program However, enrollment rates have increased notably since last year s survey Customers perspective on loyalty If you actively use three or more products with a bank that loyalty should be rewarded with lower fees or higher rates on deposits that loyalty should be rewarded with better service % of customers who agree or strongly agree 91% 86% % who would switch to a bank that offered it 70% 60% What customers value most from a loyalty program Cash back on credit/ debit cards Price reductions on bank products and services Gifts Premium services from the bank? Price reductions for partnerships (cinema, retailer ) Airmiles/hotel points 11% 9% 7% 33% Customers strongly believe that loyalty to a bank should be rewarded. 70% of them would switch their primary bank if rewarded with lower fees or higher rates on deposits for product holding. Most customers want bank loyalty programs to offer tangible financial rewards. However, preferences vary suggesting that flexible rewards programs would be compelling. Global Consumer Banking Survey 2012 Results - The customer takes control 9

11 What it means for banks As customers are taking control, banks should adapt and embrace the shifting balance of power Customers are taking control. What are the implications for banks? Embrace the shifting balance of power Ernst &Young believes that there will be increasing presence of differentiated banking models that serve specific customer needs, such as low cost or high accessibility. However, for large full-service banks, choosing where and how to compete is a complex challenge. They need to deliver personalized products and services to a broad customer base, while lowering costs and generating sustainable profitability. There is no simple solution, but looking across the industry Ernst & Young believes that the future winners are the banks that are able to successfully grow sustained and profitable customer relationships. Give customers flexibility to choose. Make pricing and service promises transparent, offer segmented levels of service and seamless omni-channel distribution Help customers shape their experience. Encourage customer self-service, shift marketing from push to pull, and develop flexible loyalty programs Shape the business model around customer needs. Make low cost digital channels customers preferred choice, prioritize investments on critical customer interactions, and use innovative technology to deliver the retail bank of the future. Global Consumer Banking Survey 2012 Results - The customer takes control 10

12 What it means for banks Give customers more flexibility 1 Make pricing and service promises transparent Pricing is critical to customer satisfaction, and customers want to be able to choose between different costs, service and levels of functionality. Transparency over pricing and service promises is vital if banks are to deliver something customers value. It is also critical for banks to rebalance fee structures to achieve the clarity and sustainability demanded by regulators and investors. 2 Offer segmented levels of customer service Customers should have the option to buy into certain products and services, and the ability to earn upgrades through loyalty, whether in terms of longevity, share of wallet or the value they generate. 3 Move from multichannel to omnichannel distribution Customers care more about convenience than about channels. Banks need to look beyond multi-channel towards a fully integrated banking experience that melds the advantage of physical branches and in-person interactions with the information-rich digital channels. Marketing offers are customer-segment specific, not channel specific, and allows customers to purchase a product in one channel that they had researched or seen promoted via another channel. Global Consumer Banking Survey 2012 Results - The customer takes control 11

13 What it means for banks Help customers to shape their experience 4 Encourage customer selfservice To regain influence over customers decisions and their own revenue streams, banks need to improve the way they provide information and advice. They need to target self-directed customers, encouraging greater self-service. Examples include financial planning tools, demonstrations of how people like you are investing or ranges of product and pricing bundles. 5 Shift marketing from push to pull The growing importance of word of mouth and the waning power of direct selling have implications for banks marketing strategies, which needs to shift from push to pull. Banks should aim to recruit their satisfied customers as advocates and online affinity groups as marketers by letting them select and shape the marketing they receive. 6 Develop flexible loyalty programs Banks need to capitalize on customers growing enrollment in loyalty programs Most customers want financial rewards. These are costly, but offer huge potential benefits in loyalty and advocacy. Banks should tailor programs for affinity groups, and let customers choose rewards depending on customer preferences, and the size and share of wallet they give the bank. Example of SmarterBank SmarterBank is an online US bank targeting student communities. It has a loyalty program specifically designed to help customers repay their student loans. The SmarterBucks rewards program uses rewards for debit card use to pay down student loan balances. Family members can also directly contribute loan payments. Global Consumer Banking Survey 2012 Results - The customer takes control 12

14 What it means for banks Shape business models around customer needs 7 Make low-cost digital channels customers preferred choice Banks should encourage customers to use digital channels whenever possible. Banks should understand which services customers want to handle through branches, and encourage not force - other transactions to move to digital channels, if necessary by using price incentives. 8 Prioritize investment on critical customer interactions Customers identify a number of bank interactions as being particularly important. Banks focusing operational improvements on these areas will optimize the resulting impact on attrition, dormancy and loyalty. They will also achieve a benefit in terms of their costs to serve. Banks recognize the importance of operational investment, but they will need to carefully target their limited capital spending budgets for maximum effect on customer satisfaction. Based on research conducted in 2011, Ernst & Young identified ten critical customer interactions: Changes to fees and charging structures Account switching Account opening or closing Life events (e.g., marriage) Change-of-account details Complaint handling First time into the debt collection process Lost or stolen card Setting up a payment Buying a new product 9 Use innovative technology to deliver the retail bank of the future The use of cutting edge technology is vital to all of the other implications we identify. This includes breaking down silos, creating omni-channel distribution, developing innovative rewards for loyalty and giving customers the ability to personalize their products and services. Technology can also help to maintain intimacy as customers move towards digital banking and greater self-service. To achieve this, banks will need to partner with technology innovators. Global Consumer Banking Survey 2012 Results - The customer takes control 13

15 Appendix

16 World 11 World 12 EU Non EU US Canada Australia Lat Am Brazil India China Japan Rest Asia South Africa 2 28% 30% 4 33% 51% 59% 52% 1 33% 22% 72% 9% 9% 69% 59% 43% 4 39% 39% How has customer confidence changed towards the banking industry? Overall customer confidence in banking continues to fall, with of customers losing trust in the industry over the past year and only 22% gaining confidence. How has your confidence towards the banking industry changed over the past 12 months? Decrease Increase No impact Global Consumer Banking Survey 2012 Results - The customer takes control Mature economies remain the most impacted by financial crisis, with trust levels still low. While the US and Australia saw a slight recovery in confidence since last year, Europe suffered a dip. Many institutions are struggling to rebuild reputations that have been severely damaged by the financial crisis. Since last year, confidence levels fell in all European - particularly in those heavily impacted by the financial crisis (Greece, Spain, Italy and Belgium). This was mainly due to the ongoing macroeconomic situation/ Eurozone crisis and continued dissatisfaction with the bonus culture of banks in light of government intervention. Canada and Japan have experienced the least change in customer confidence levels since Emerging economies (specially India), Latin America and Asia Pacific (specially Indonesia & Malaysia) have either witnessed an increase in customer confidence levels or no impact at all, chiefly in Latin America. Trust levels in the banking industry have improved in all Latin American, specially in Panama and Peru, where approximately 60% of customers say their confidence has increased. More personalized, innovative service offerings is key reasons, in addition to clarity communication on banks offering. There has been a slight decrease in trust levels in Brazil where more than half of respondents are dissatisfied with the quality of the service and advice offered. 15

17 Customers are more likely to use other banks

18 World 11 World 12 EU 11 EU 12 US 11 US 12 Canada 11 Canada 12 Lat Am 11 Lat Am 12 Brazil 11 Brazil 12 India 11 India 12 China 11 China 12 Japan 11 Japan 12 South Africa 11 South Africa 12 How have attrition levels risen in the past year? Attrition rates are up in several major markets. There is a significant increase in the number of customers planning to change their bank. Have you ever changed your main banking provider? % % 7% 7% 9% 3 39% 37% 50% 57% 50% 58% 51% 53% 51% 9% 7% 33% 33% 29% 46% 6 60% 76% 19% 11% 17% 72% 2 8 3% 48% 56% 10% 3 39% Yes No, but I am planning to change No Globally, more than a half of customers who changed their main bank, did so in last 5 years. The number of customers planning to change banks has grown comparatively since 2011 from 7% in 2011 to in This proportion is significantly higher in China, India and several Latin American. Attrition rates have grown in several key markets, mainly driven by high fees. In both the US and Canada the number of respondents who have changed their main bank has increased. On the contrary, Japanese, Singaporean and Indians banks seem to have the lowest attrition rates. The main driver of attrition is the dissatisfaction with high fees, cited by 50% of respondents. The figure rises even higher in many mature. Poor branch experience and poor interest rates are other leading drivers of attrition. Global Consumer Banking Survey 2012 Results - The customer takes control 17

19 7% 7% 7% 6% 11% 1 11% 30% 2 18% 19% 22% 22% 19% 1 19% % 18% 2 18% 17% 22% % 29% 30% 29% 19% 19% 19% 22% 19% 18% 29% 29% 30% % 29% 28% 32% 32% 32% 3 32% 37% 37% 39% 39% 33% 32% 3 50% 49% 48% 48% 57% 5 53% 52% 57% 59% 70% What are the key drivers of attrition? Customers are becoming increasingly sensitive to high fees or charges. Pricing is the single most important driver of attrition followed by a poor branch experience. What are the main reasons for attrition? World EU Non EU US Canada Australia Lat Am Brazil India China Japan Rest Pac South Africa High fees or charges Poor rates on accounts Lack of personalized contact / service A specific service failing Poor range of products and services Proximity of branches Poor branch experience Poor customer call centre experience Poor internet / mobile banking experience Poor Financial Advisor s competencies Poor Brand image / reputation 50% of the customers who changed their main bank did so due to high fees or rates. Poor branch experience is also a key global driver of attrition. Poor rates on accounts is an important factor in mature economies (US, Canada, Australia and Europe) Lack of personalized contact or service is a key factor in emerging economies (Lat Am, Brazil, India) Global Consumer Banking Survey 2012 Results - The customer takes control 18

20 World 11 World 12 Eu 11 Eu 12 US 11 US 12 Ca 11 Ca 12 Lat Am 11 Lat Am 12 Br 11 Br 12 In 11 In 12 Ch 11 Ch 12 Ja 11 Ja 12 SA 11 SA 12 17% 6% 7% 6% 46% 43% 51% 42% 48% % 46% 37% 42% 33% 29% 46% 43% 47% 33% 37% 39% 43% 29% % % 11% 7% 8% 2% World EU Non EU US Canada Australia Brazil Lat Am India China Japan Rest Asia- Pacific South Africa Is multi-banking on the rise? Globally, multi-banking is growing rapidly. Customers are increasingly active in their search for the best rates, products and services. How many banks do you bank with? World 8% % 39% 29% 43% 37% 33% 42% 29% 37% 42% % 6% 6% More than 3 How many banks do you bank with? Evolution % Multi-banking is increasing as customers search more actively for the best rates and products. Customers have an increasing desire to maximize the value of their banking relationships Although customer dynamics vary between different markets, there are underlying consistent trends: Multi-banking is clearly on the increase in mature markets such as US, Australia, EU, and Latin America. The number of customers with only one banking relationship has fallen in these, whilst the proportion with three or more has grown. China, India, Turkey, Russia, Japan, and Asia Pacific traditionally have tended to bank with multiple providers. This often reflects the desire to diversify deposits and reduce exposure to the risk of bank failure. Consolidation among domestic banks is the major factor reducing multi-banking in markets like Spain More than 3 Global Consumer Banking Survey 2012 Results - The customer takes control 19

21 10% 9% % 19% 18% 17% % 28% 29% % 30% 33% 33% 30% 28% 17% 29% 2 33% 32% 30% % 37% 43% 47% 48% 42% 43% 47% 47% What is driving multi-banking? Customers are now more willing than ever to shop around for the best rates and the best products and services. If you bank with more than one bank, why is this? World EU Non EU US Canada Australia LatAm Brazil India China Japan Rest Asia South Africa To spread your deposits in case of bank failure To ensure the best rates/fees for each product To ensure the best product/service in each category Trying another bank before switching all services History always used different providers for different things Globally, the growth in multi-banking is being driven by a desire to obtain the best rates and to receive the best product or service. Customers have an increasing desire to maximize the value of their banking relationships. In mature economies, customers choose more than one bank to obtain the best rates for each product and the best product / service in each category. Specifically in India, Japan and Asia Pacific, a large proportion of customers are banking with multiple institutions in order to spread their deposits in case of bank failure. Global Consumer Banking Survey 2012 Results - The customer takes control 20

22 3% 1% 2% 3% 2% 2% 3% 1% 2% 2% 2% 3% 7% 8% 7% 8% 6% 7% % 10% 18% 22% 2 22% 28% 60% 73% 72% What are customers buying from secondary financial providers? Customers remain wary of non-financial providers, but the potential threat from new entrants offering better rates, more personalized products and services, stronger technology or better rewards is very real. Which organization do you use for the following products and services? Checking/current account Savings Personal loan Car loan Credit card Mortgage Investments Retirement Insurance products Main bank Another local bank Another foreign bank Financial advisor Non-bank As expected, the majority of customers turn to a bank when making product choices about checking /current accounts, savings and credit cards. Customers are increasingly likely to choose a non-banking institution for non-core products such as car loans car loans, retirement and insurance products. For insurance and retirement products, customers even prefer non-bank providers over their main bank. Global Consumer Banking Survey 2012 Results - The customer takes control 21

23 7% 22% 19% % 22% 30% 18% 19% 30% 28% 19% 17% 37% 32% 30% 28% 2 32% 32% 30% 30% 29% 32% 4 42% 43% 42% 46% 43% 39% 39% 33% 4 42% 42% 42% 39% 39% % 49% 48% 47% % 39% 37% 46% % 46% 43% 48% 46% 52% 53% 57% 60% 60% 69% Why are customers using non-financial providers? Non-financial providers and new entrants are competing with better rates, more personalized products and services, better technology and/or attractive loyalty programs. Which has convinced/would convince you to choose a non-financial banking provider for some or all of your banking service and products? World EU Non EU US Canada Australia Lat Am Brazil India China Japan Rest Asia- Pacific The provider has better rates on their accounts The provider s products are a better match for your needs The provider offers a more innovative approach than traditional banks The provider has an attractive loyalty/rewards scheme The provider has a brand you trust The provider has lower fees on their accounts The provider has a more personalized service which meets your needs better The provider has a service offering that is easy to understand The provider offers better technology to meet your banking needs South Africa Economic factors are most likely to draw customers to non-financial institutions, implying that firms able to offer better rates or lower fees than incumbent banks could gain market share. Worldwide, there are also other important factors that would encourage customers to use non-financial entrants: A better product offering and more personalized service A trusted brand Better technology to meet customers needs (particularly in emerging economies) Attractive loyalty programs Innovative approaches to banking offered by non-financial companies, such as technology/internet/media or retail companies is becoming an important force of change, specifically in emerging markets like India, China and South Africa. Global Consumer Banking Survey 2012 Results - The customer takes control 22

24 Customer advocacy is gaining power

25 37% 48% 4 33% 29% 43% 42% 60% 6 57% 5 51% 47% 5 50% 47% 5 52% 57% 56% 53% 6 66% 71% 62% 67% 71% 72% 63% 70% 69% 62% 62% 77% 77% 73% 67% 60% 69% 82% 62% 71% 66% 63% 67% 63% 59% 67% 72% 68% 76% 7 76% 7 77% 73% 72% 72% 71% 6 59% 63% 76% 8 81% Where do customers look for advice? The majority of customers rely on personal peer groups for banking information. In addition, financial comparison websites are increasing in importance as customers seek to find best deals. What sources do you value to keep yourself informed on banking products with your main bank? World EU Non EU US Canada Australia Lat Am Brazil India China Japan Rest Asia South Africa Financial Advisor Financial comparison websites Media reports Competitor advertising On line personal network / Trusted communities Face-to-face discussion with friends/family/ colleagues/? Globally, the majority of customers rely on personal peer groups for banking information. Online word-of-mouth is also increasingly powerful. 71% of customers prefer a face-to-face discussion with family, friends or colleagues as the main source to keep them informed. Customers place the greatest value on information and advice that comes from sources they personally know and trust. However, customers behavior varies per region: In emerging economies customers are more likely to keep themselves informed through on-line personal, network/ trusted communities, as well as use media reports. Mature economies, especially the US, and Japan have lower rates of customers using in face-to-face discussion compared to the global average. Financial comparison websites, relatively unknown 5 years ago are used by 6 of customers, eclipsing financial advisors and enabling customers to take control of their own research and decision-making. These websites are playing a crucial role in customers growing desire to seek the best deals. Comparison websites have achieved great popularity across regions as diverse as the EU, Latin America and Asia Pacific, although they are relatively less popular in some mature markets such as US, Canada and Australia. Global Consumer Banking Survey 2012 Results - The customer takes control 24

26 10% 17% 2 10% 8% 19% 7% 18% 7% 10% 18% 11% 8% 10% 8% 1 33% 29% 32% % 43% 4 50% 4 47% 46% 50% 53% 46% 46% 42% 57% 57% 61% 67% 6 68% 70% 81% 73% How do customers interact with their bank via social networking sites? Social networks are increasingly important sources of information, and magnify banking customers ability to act as influential advocates or critics. Do you use social networking sites in relation to you banking activities to... World EU Non EU US Canada Australia Lat Am Brazil India China Japan Rest Asia South Africa Find out more about their products and services Access your account Share your budget and spending patterns Share great banking-related offers Comment on the level of service you've received In relation to their banking activities, 4 of customers use social networking sites to source information on banking products and services, followed by commenting on the level of service they have receive and sharing great banking-related offers. Countries across the globe follow this trend, but social networking sites are more commonly used in emerging economies. China provides one of the most notable examples of this trend. 81% of Chinese customers use social networks to find more about banking products, 73% to access their accounts and 70% to comment on service received. In mature economies, the use of social networking is rather low, particularly in US as well as in Japan. Global Consumer Banking Survey 2012 Results - The customer takes control 25

27 Customers want greater personalization and flexibility

28 Do banks tailor their offerings to meet customers needs? Customers in emerging economies are more likely than customers in developed economies to say that their banks adapts its products and services to their financial needs as they change. Does your bank adapt the products and services it offers you as your financial needs change? 37% 42% % 39% 19% 22% 17% % 1 6% 18% 4 39% 50% 39% 51% 5 61% 60% 43% 43% World EU Non EU US Canada Australia Lat Am Brazil India China Japan Rest Asia South Africa Yes No Not sure In India, China and Brazil a larger proportion of customers feel that product and services are customized to meet their financial needs, compared to the global average. On the contrary, customers in Japan, Europe, US, Asia and South Africa feel that customization is low. Global Consumer Banking Survey 2012 Results - The customer takes control 27

29 Would customers be willing to provide more personal information in return for better customization of products? Customers want personalized products and services, and most would be happy to give more personal information to their bank in exchange for a more tailored service offering. Would you be willing to provide your bank with more information about yourself, and/or your family, if it helped your bank to recommend a more appropriate account or deliver a better service for you and your family? 30% 30% 32% 28% 19% 1 28% 53% 10% 70% 70% 6 68% 73% 72% 73% 81% 86% 72% 47% 73% 90% World EU Non EU US Canada Australia Lat Am Brazil India China Japan Rest Asia South Africa Yes No Customers value personal service. This is evident from the fact that globally, 70% of customers are willing to provide their bank with more information if this leads to greater personalization or better service. The majority of customers in every country surveyed with the notable exception of Japan would be happy to disclose personal information in this way. Levels are particularly high in emerging economies, with customers in South Africa, India, and Brazil among the most willing to provide more personal information to their banks. Global Consumer Banking Survey 2012 Results - The customer takes control 28

30 2 28% 2 18% 2 How often are customers willing to update their information? Globally, customers preference is to update their information at their own pace as and when circumstances change. How often would you be prepared to update the information for your bank? 4 48% 42% 46% 50% 39% 4 46% 43% 52% 49% 30% 22% 2 10% 10% 6% 3% 3% 3% 1% World Europe USA Canada Australia LatAm Brazil India China Japan Rest Pac. South Africa Verify it s correct every six months Verify it s correct every year Update at my discretion when circumstances changed Only provide at the beginning of the banking relationship Just over a quarter of customers would be willing to provide their bank with personal information twice a year, and a similar number would be willing to do so annually. This far outweighs the minority who are only happy to provide personal information at the start of their banking relationship. Customers in a number of European, North American and Asia-Pacific markets would prefer to provide updates at their own discretion. Global Consumer Banking Survey 2012 Results - The customer takes control 29

31 How do customers use different banking channels? Internet banking is preferred for simple transactions and accessing account information. While complex transactions and advice are still preferably dealt with at branches. What is your preferred method of dealing with your bank for different types of products, services and activities? Accessing account information Advice on products and services 62% 42% 2% 10% 3% 11% 3% 2% Branch visit Call centre Mobile app Internet Postal mail ATM Branch visit Call centre Mobile app Internet Postal mail ATM Simple transactions Complex transactions 47% 71% 2% 3% 3% 2% 2% 3% Branch visit Call centre Mobile app Internet Postal mail ATM Branch visit Call centre Mobile app Internet Postal mail ATM Global Consumer Banking Survey 2012 Results - The customer takes control 30

32 Customer Satisfaction

33 30% 39% 42% 4 42% 49% 5 51% 49% 5 60% 58% 53% 5 52% 5 52% 52% 49% 5 49% 52% 6 62% 60% 60% 57% 5 52% 53% 60% 58% 69% 71% 63% 80% 77% 76% 71% 68% 72% 62% 72% 6 61% 67% 63% 71% 67% 68% % 68% 66% 71% 72% 72% 70% 68% 69% 81% 78% 79% 79% 82% 79% 77% 81% 7 76% 81% 78% 7 71% 71% 8 82% 81% 76% 83% 79% 79% 71% 76% 78% 70% 73% 66% 70% 6 60% 73% 71% 69% 78% 7 82% 78% 90% 87% 87% 8 87% 8 83% 81% 86% 89% 83% 8 83% 80% 90% 86% 91% How satisfied are customers? And what are they frustrated about? Customer satisfaction with internet and branch banking is high. Poor mobile banking and call center experiences, as well as a lack of transparency of fees are the main triggers of customer frustration. Thinking about the different aspects of your banking relationship, how satisfied are you with your bank at the moment? (Very satisfied & Satisfied) World EU Non EU US Canada Australia LatAm Brazil India China Japan Rest Asia South Africa Branch experience Products / services to meet requirements Call center experience Internet site experience Contacting your bank to deal with an issue or ask for advice Mobile banking services Quality of advice Transparency of fees Complaints management Globally, 87% of customers are satisfied or very satisfied with their main bank. Customer satisfaction is strong for internet banking and branch banking. It is lower for call centers and mobile banking (58% satisfied), but these figures are distorted in some markets by the number of customers who do not use these channels. It is also notable that customer satisfaction has improved significantly since 2011 for call centers (from 50% in 2011 to 60% in 2012) and mobile banking (from 4 in 2011 to 58% in 2011). Transparency of fees has low satisfaction rates, specially in emerging economies. Low satisfaction for complaints management is due to a high percentage of respondents answering not applicable. Global Consumer Banking Survey 2012 Results - The customer takes control 32

34 How to improve customer satisfaction? Pricing and service quality remain critical to customer satisfaction. Besides clearer fee structures and better interest rates, customers want to see improvements in digital banking. Which of the banking activities would you most like your bank to improve/make easier to increase your satisfaction with the service they provide? World Changes to fees and charges structure Online banking/ mobile banking Access to a branch Dealing with a life changing event Payments Fraud or lost/stolen card Complaint handling Call Centre experience Current account opening or closing Refinance application Mortgage application Appeal against credit refusal Change of your account details Adding Bill Payees Moving your account 3% 3% 3% 3% 7% 6% 9% 8% 8% 22% Not surprisingly, pricing is the single most important driver of customer satisfaction. Improving online and mobile banking is the second most important driver for increasing customer satisfaction, cited by of respondents worldwide. Customers are yet to accept mobile banking as a trusted distribution channel. Banks need to focus on improving availability and service quality of this channel. Globally, 67% of customers would use mobile banking if they felt confident about its security. Other priorities include improving basic customer interactions such as dealing with a life-changing events or handling the loss or theft of a bank card. Global Consumer Banking Survey 2012 Results - The customer takes control 33

35 1 11% % 22% 28% 28% 2 29% % 42% 42% 46% 43% 48% 47% 46% 52% 50% 48% 56% 56% 5 58% 52% 56% 60% 60% 60% 67% % 70% 70% 72% 69% 69% 67% 72% 71% 71% 77% 77% 7 77% 7 73% 80% 78% 77% 78% 76% 86% 83% 81% 78% 83% 9 92% 9 89% 91% 87% 86% 8 82% 81% 8 91% 89% 87% 8 91% 96% 97% % 92% 93% 91% 96% % 93% 92% 90% % 9 91% 91% 92% 92% 97% Customer attitudes on what services banks should provide Do you agree with the following statements? World EU Non EU USA Canada Australia LatAm Brazil India China Japan Rest Pac. South Africa You would pay extra to speak to a relationship manager If it was cheaper you would accept restrictions with how you could communicate with your current/checking account You would be prepared to pay a separate fee to access a call centre that was not off-shored Banks should have staff available to help in branches If you actively use three or more products with a bank, that loyalty should be rewarded with better service If you actively use three or more products with a bank, that loyalty should be rewarded with lower fees or higher rates on deposits You would use your mobile phone/device for (more) banking activities if the bank could demonstrate it was secure You would use your mobile phone/device to make payments in a shop if the bank could guarantee security You would use a non-traditional banking provider to make payments, such as a mobile wallet capability Global Consumer Banking Survey 2012 Results - The customer takes control 34

36 2 32% 37% 33% 39% 33% 43% 46% 48% 4 42% 51% 51% 37% 39% 4 46% 46% 43% 48% 51% 5 48% 56% 57% 56% 56% 57% 49% 63% 62% 6 62% 58% 58% 5 67% 52% 6 47% 49% 53% 47% 51% 46% 4 46% 4 50% 50% 56% 5 57% 60% 58% 58% % 49% 60% 61% 60% 62% 58% 63% 62% 66% % % 6 61% 6 70% 70% 70% 68% 66% 62% 63% 6 61% 72% 77% 73% 77% 73% 71% 73% 72% 78% 76% What factors would encourage customers to switch banks? Rewards for loyalty will boost retention and attract new customers. For the statements that you agreed or strongly agreed with, would you switch your primary banking relationship to a bank that offered them? (Switch) World EU Non EU USA Canada Australia LatAm Brazil India China Japan Rest Asia South Africa You would pay extra to speak to a relationship manager If it was cheaper you would accept restrictions with how you could communicate with your current/checking account You would be prepared to pay a separate fee to access a call centre that was not off-shored Banks should have staff available to help in branches If you actively use three or more products with a bank, that loyalty should be rewarded with better service If you actively use three or more products with a bank, that loyalty should be rewarded with lower fees or higher rates on deposits You would use your mobile phone/device for banking activities if the bank could demonstrate it was secure You would use your mobile phone/device to make payments in a shop if the bank could guarantee security You would use a non-traditional banking provider to make payments, such as a mobile wallet capability Customers across all regions identify tangible rewards for loyalty as a leading factor that would persuade them to switch their bank. Global Consumer Banking Survey 2012 Results - The customer takes control 35

37 Customers want to be rewarded

38 18% 1 30% 19% 18% 18% % 82% 73% 79% 79% 86% 70% 81% 6 82% 82% 76% % 6 73% % Do loyalty schemes work for banking? Rewards for loyalty will boost retention and new customer acquisition. Have you enrolled with a bank loyalty/rewards program? 73% 77% 77% World EU Non EU 70% 6 30% 7 82% 18% 6 US Canada Australia Lat Am Brazil India China Japan Rest Asia South Africa Yes No Have you enrolled with a bank loyalty/rewards program? Evolution World Europe US Canada LatAm Brazil Yes India No 52% 48% China Japan SA Asia Pac Most customers expect bank loyalty programs to offer tangible financial rewards, typically cash back offers on credit or debit cards and price reduction on products and services. In Indonesia and Vietnam gifts are preferred, but this is a rare exception. Enrollment in loyalty programs is growing rapidly, especially in emerging markets. Globally, of customers have enrolled in a bank loyalty program, but this varies between. Enrollment rates are high in emerging markets particularly in India and South Africa. The rate of enrollment has picked up rapidly since 2011, specially in Asia Pacific, China and US which have nearly doubled. In contrast, enrollment rates in some European are low by global standards. Also, Latin American and Japanese customers are less engaged in loyalty programs. Global Consumer Banking Survey 2012 Results - The customer takes control 37

39 3% 3% 3% 3% 3% 3% 3% 2% 3% 2% 6% 6% 7% 7% 9% 8% 8% 8% 9% 8% 11% 11% 1 1 8% 9% 1 10% 7% 6% 7% 7% 8% 9% 8% 10% 11% 11% 11% 9% 10% 1 18% 19% 17% 17% 18% 28% 29% 33% 32% 30% 32% 37% 37% 42% 4 52% 57% How do customers want to be rewarded? Most customers want bank loyalty programs to offer tangible financial rewards. However, preferences vary, suggesting that flexible reward programs would be compelling. What do you or would you value the most from a loyalty program? World EU Non EU US Canada Australia LatAm Brazil India China Japan Rest Asia South Africa Gifts Airmiles / hotel points Price reductions on bank products and services Nothing, I don t pay any attention to loyalty/rewards programs in banks Premium services from the bank? Cash back on credit/ debit cards Price reductions for partnerships (cinema, retailer ) Global Consumer Banking Survey 2012 Results - The customer takes control 38

40 Survey Demographics

41 Methodology In total, 28,560 participants were surveyed in March 2012 using an internet questionnaire. The breakdown of the participants by country is as below: 11,501 Europeans (500 Belgium; 500 Czech Republic; 1,000 France; 1,000 Germany; 500 Greece; 500 Hungary, 1,000 Italy; 500 Netherlands; 1,001 Nordics; 500 Poland; 500 Portugal; 1,000 Russia; 1,000 Spain; 1000 Turkey; 1,000 UK) 3,529 Latin Americans (500 Argentina; 504 Chile; 500 Colombia; 1,023 Mexico; 500 Panama; 502 Peru) 1,019 Brazilians 2,002 US 1,000 Canadians 1,000 Indians 1,002 Japanese 500 South Africans 2,004 Chinese 1,000 Australians 4,003 Asian Pacific (1,001 Indonesia; 500 Vietnam; 502 Hong Kong; 500 Malaysia; 500 Singapore; 1,000 South Korea) Global Consumer Banking Survey 2012 Results - The customer takes control 40

42 Farmer Selfemployed Executive Intermediary profession Employee Unemployed Retired Student Less than to to to More than Prefer not to say Less than to to to to More than Prefer not to say Demographics The survey covered participants of all ages, within varied income brackets and from a variety of professions. Gender Age Population (place of residence) % 50% 30% % Male Female 1 0% or older < 2,000 2,000 to 100,000 > 100,000 Occupation Annual income Asset 60% 50% 30% 10% 0% 1% 8% 10% 9% 60% 50% 30% 10% 0% 17% % 50% 30% 10% 0% 10% 7% 3% 2% Global Consumer Banking Survey 2012 Results - The customer takes control 41

43 Asia-Pacific EMEIA Americas Country aggregations Countries were grouped based to behavioral criteria and geographic proximity US Canada Latin America Brazil Argentina Chile Colombia Mexico Panama Peru Venezuela US Canada Latin America Brazil Argentina Chile Colombia Mexico Panama Peru Belgium Czech Republic India South Africa Europe Belgium France Germany Hungary Italy Netherlands Nordics Poland Spain UK India South Africa EU France Germany Greece Hungary Italy Netherlands Nordics Poland Portugal Spain UK Non EU Turkey Russia China Japan China Japan Australia Rest of Asia-Pacific Hong Kong Indonesia Malaysia Singapore South Korea Vietnam Global Consumer Banking Survey 2012 Results - The customer takes control 42

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