REPORT Digital Channels III Internet and financial services in Europe In collaboration with:
CONTENTS INTRODUCTION 03 Foreword 04 Methodology and acknowledgements 05 Executive summary 06 The banking and digital landscape remains mixed FIXED AND MOBILE INTERNET 09 Fixed and mobile internet: explosive usage growth 09 Fixed internet banking at the stage of maturity 09 Mobile internet: increased use among the European panel 12 Improved customer satisfaction CUSTOMER JOURNEYS ARE MORE DIGITAL 14 Customers journeys are more digital, but with an increasingly strong bank presence 14 Digital channels are used frequently, but for transactions which remain straightforward 15 A pre-sales process boosted by commercial proactivity 17 Online purchases are already part of the landscape 18 Customers are frequently contacted, but offers aren t always relevant NEW BANKING PLAYERS 20 New banking players: still very limited awareness and use of services 20 GAFA & neo-banks: still little enthusiasm despite their emergence at European level 20 New uses with which internet users are still not familiar 22 Social networks CONCLUSION 23 What lessons can be drawn by banks? INTERVIEWS 24 Antoine Pichot, Co-Head of Strategy, Digital and Customer Relations, Société Générale 28 Marco Bragadin, CEO, ING Italy 31.Katarzyna Prus-Malinowska, Digital Banking Director, Bank Zachodni WBK 34 Nazim Erdogan, Head of Digital Banking, TEB 37 Luca Vanetti, Digital & Omnichannel Banking, Banco BPM SpA 2 Digital Channels III: internet and financial services in Europe
Foreword The Digital Channel survey, carried out in collaboration with Efma, provides an overview of the main trends as regards the use of digital banking channels. An eighth country, namely Spain, has been added to the survey, which now covers a broad spectrum of diverse banking relationship models: France, Germany, Italy, the Netherlands, Poland, Spain, Turkey and the United Kingdom. The first two editions, published in 2011 and 2013, had highlighted the strong growth in the use of digital channels in the banking relationship. How do customers connect to their banks today? Which channels do they use? How often? What is the role of digital channels in the banking relationship? What do customers do when they log on remotely? How are digital channels used to purchase financial products? What types of products are purchased via these channels? How are social networks integrated into digital strategies? How are they perceived by customers? In 2017, for the third edition, new topical issues facing European banks are addressed. What is the role of digital relationship marketing and how is this integrated into the customer digital journey? What is the most appropriate level of customer autonomy in after-sales management? How far have innovative services been appropriated (means of payment, Fintech platforms, etc.)? How are online banks and new entrants perceived? This survey, based on the answers of more than 4,000 respondents and interviews with senior banking executives, reveals significant differences in utilisation rates, usage, satisfaction and expectations among internet users vis-à-vis their bank. Several topics which are currently major marketing and commercial issues for banks are addressed in this report. We hope that the findings of this survey will shed light on the expectations of your customers and help you anticipate the impact of the quickening pace of digital development. Vincent Bastid CEO, Efma Philippe Derambure President Founding Partner Exton Consulting 3
INTRODUCTION Methodology The conclusions of this survey are based on an online survey conducted in November 2016 involving 4,000 respondents (500 in each of the eight countries) aged between 18 and 74. Definitions: The 8-countries average corresponds to the unweighted average of the eight countries surveyed. The term internet users refers to the whole of the population having internet access, that is to say the population covered by the survey. The term mobile internet users refers to the whole of the population having a mobile phone and/or internet-enabled tablet. Technical note: As the figures represent a population of internet users, the structure of the samples is not systematically representative of the country s population as a whole. The data therefore reflect the trends of a population of internet users. Acknowledgements We wish to thank the following contributors in particular for their testimonies: Antoine Pichot, Co-Head of Strategy, Digital and Customer Relations, Société Générale Marco Bragadin, CEO, ING Italy Katarzyna Prus-Malinowska, Digital Banking Director, Bank Zachodni WBK Nazim Erdogan, Head of Digital Banking, TEB Luca Vanetti, Head of Digital & Omnichannel banking, Banco BPM And the following Exton Consulting authors: Philippe Vervloedt, Partner Martin Tixier, Partner Jocelyne Amegan, Principal Anne-Séverine Calandreau, Manager 4 Digital Channels III: internet and financial services in Europe
Executive summary Increasingly digital customer journeys, but with banks increasingly present France, Germany, Italy, the Netherlands, Poland, Turkey, the United Kingdom and Spain: digital channels are popular in each of these countries. Branches continue to feel the effects of the digitalisation of banking practices, with branch networks having shrunk by 7% on average between 2012 and 2016 in the eight countries surveyed by Exton consulting*, except for Poland and Turkey where the density of branch networks has increased. However, this shrinking of brick-and-mortar networks has not been accompanied by a decrease in the accessibility of personal relationship managers, since the current rate of 39% is two percentage points higher than in 2012. France is almost an exception with 89% of internet users declaring that they have access to a personal banking advisor at their main bank. The use of internet banking continues to increase: 87% of internet users log on at least once a quarter and 28% are heavy users who log on daily. Mobile banking has recorded exponential growth. The change in the number of connected smartphone and tablet owners has a huge and direct impact on the use of mobile internet banking: the number of users has doubled, they log on between 2 and 3 times a week, and more than half of them have downloaded their bank s app (x2 vs. 2012). Lastly, satisfaction with mobile banking has now bridged the gap with fixed internet banking with an NPS (net promoter score) up by 30 percentage points. Once they have logged on, users mainly carry out simple everyday banking transactions. In this regards, the types of internet and mobile banking uses are very similar. Nevertheless, the proportion of complex, participatory transactions has increased by around 10 percentage points, driven by the under-40 age group. Upstream of transactions, 66% of internet users prefer to search online for information on a financial product. When it comes to purchasing products, 37% prefer to purchase simple products online. Nevertheless, there are still significant cleavages: in France, where the relationship model is based on access to a banking advisor, only 21% of internet users say that they have purchased a financial product online, compared with more than 30% in the United Kingdom and Turkey. So, how can banks move things forward? First of all, the customer journey must reflect a rapid, simple, practical experience with customer support along the way: Half of internet users appreciate being recontacted following an internet search, preferably by email (49%) or by telephone (37%) and 43% want to have the support of a banking advisor when finalising their purchase. Upstream, these journeys need to be better promoted and more closely targeted: more than 50% of respondents said that receiving promotional offers or personalised pre-selected offers would encourage them to purchase products moreover, one-third of respondents consider that the offers received from their bank are unfortunately not relevant. At this time, more than a quarter of internet users would be willing to open an account with a new digital entrant (Google, Amazon, Facebook, Apple) and are prepared to test new Fintech offerings. Respondents in France and the Netherlands are the most cautious: only 21% and 11% of internet users would be willing to open a bank account with these digital players. This playing field could enable Fintechs and neo-banks to increase their market share in some specialised products and services. On 5
the other hand, there is still a significant image problem: two-thirds of internet users have not heard of crowdfunding platforms, only 10% of them use an account aggregation service and fewer than 5% of them use an investment platform. What lessons can banks learn from this? First of all, the need to treat mobile banking as a preferred relationship channel. Beyond the established success of banking apps, banks need to enhance their mobile offering: videoconferencing, chat advisors, customisable alerts and notifications, etc. Next, improving the actual experience by redesigning the customer journey, across all channels, in order, for example, to natively integrate compliance, share dematerialised documents and propose remote support (tutorials, dynamic FAQ, chatbot, etc). Lastly, new player offerings enable internet users to buy and construct their financial services according to the best offers (price, service, technical features, etc.). The challenge facing banks is therefore to strike an economic balance for each type of product, to use the services and offerings of niche players while remaining the preferred contact point in the customer relationship. Integration or partnership? The optimal model is still a work in progress. 6 Digital Channels III: internet and financial services in Europe
The banking and digital landscape remains mixed In all countries customers are increasingly likely to have multiple financial product providers Against a backdrop of a very high bank account penetration rate, which is close to 100% in all countries, except for Turkey, and almost one-third of multi-banked customers, the number of customers having purchased financial products from different financial institutions is increasing. Turkey and the United Kingdom have the highest proportions of customers having several financial product providers: 59% and 57% respectively. Banking and digital landscape of eight countries UK 99%é 41% ê 57% 176ê Netherlands 99%= 32% ê 52% 110ê Germany 99%é 28% ê 52% 436ê Poland 78%é 30% ê 46% 372é Average 89% 34% 49% 377 France 97%= 25% ê 42% 568ê Turkey 57%é 45% ê 59% 161é Spain 98%é 44% 54% 690ê Italy 87%é 28%= 37% 501ê Bank account penetration rate Multi-banked (Customers having current accounts with more than one bank) Multi-financed (Customers having current accounts with more than one bank) Branch density (Number per 1 million inhabitants Change versus 2012 More than 3% é ê Less than 2% = but the situation differs as regards their brick-and-mortar networks The digitalisation of banking practices is having a direct impact on branch networks, with an average decrease of 7% in branch density in the eight countries surveyed between 2012 and 2016, except in Poland and Turkey where the density of networks has increased. With 372 branches per one million inhabitants, Poland is now close to the average of the countries surveyed (377), while Turkey lags behind with 200 branches per one million inhabitants. 7
However, this shrinking of brick-and-mortar networks has not been accompanied by a reduction in the availability of personal banking advisors, since the current rate of 39% is two percentage points higher than in 2012. France is almost an exception with 89% of internet users declaring that they have access to a personal banking advisor at their main bank. Rate of access to a personal banking advisor at the customer s main bank 83% 85% 60% 49% 46% 37% 30% 32% 35% 32% 24% 37% 39% 17% 17% 11% 11% France Germany Italy Netherlands Poland Spain Turkey UK Average 2012 2016 8 Digital Channels III: internet and financial services in Europe
About us A global non-profit organisation, established in 1971 by banks and insurance companies, Efma facilitates networking between decision-makers. It provides quality insights to help banks and insurance companies make the right decisions to foster innovation and drive their transformation. Over 3,300 brands in 130 countries are Efma members. Headquarters in Paris. Offices in London, Brussels, Barcelona, Stockholm, Bratislava, Dubai, Mumbai and Singapore. www.efma.com Founded at the end of 2006, Exton Consulting is a strategy and business management consulting firm specialising in financial services, with an emphasis on providing senior executives with support in addressing their growth and transformation issues. The firm, which is structured as a partnership, has the necessary independence to ensure that its recommendations are completely objective. Exton Consulting currently has four offices: in Paris, Casablanca, Milan and Munich. With dynamic growth objectives, the firm has a twofold ambition: To become a European benchmark among strategy and management consulting firms To offer its teams industry-recognised attractive, fulfilling and personal career paths. For that, Exton Consulting guarantees the excellence of its services and develops a relationship of trust with a select number of clients, based on: Its strong client commitment Its professionalism Its sector-specific expertise And, above all, its continuous quest for concrete results. Exton Consulting stands out by its values, its vision of the consulting profession, its approach and its entrepreneurial spirit. 41
Digital Channels III Internet and financial services in Europe October 2017 www.efma.com In collaboration with: