Consumer Connectivity Insights 2018 reveals over three fifths of 18-34 year-olds are happy for banks to share their transaction data with trusted third-parties for a more personalized experience
SAN FRANCISCO – MuleSoft, provider of the leading platform for building application networks, today released “Consumer Connectivity Insights 2018,” a survey of more than 8,000 consumers globally to analyze whether organizations are meeting customer expectations for a connected, personalized experience across industries and geographies. The report found there is a strong appetite among consumers for banking services delivered by technology firms like Amazon, Facebook, Google or Apple because they could offer greater convenience and more personalization than traditional banks. The research also reveals that many consumers feel that their bank provides a disconnected experience, and over half would consider changing their service provider as a result.
Among the key results of the survey:
Consumers look to tech giants for banking services
Overall, a third (34 percent) of global consumers would consider using the likes of Amazon, Google, Facebook or Apple for banking services rather than a standard bank.
- 52 percent of consumers aged 18-34 years old would be happy to embrace these tech giants as future banking providers.
- Those in Singapore (47 percent) and the United States (43 percent) were the most open to using these companies as banking provider, while consumers in the Netherlands were least in favor (22 percent).
- Simplicity/convenience (42 percent) and a more personalized service (23 percent) were cited as global consumers’ most popular reasons for choosing Amazon, Google, Facebook or Apple for banking services.
Open banking practices get the thumbs-up
- The report goes on to reveal that over three fifths (61 percent) of 18-34 year-olds would be happy for banks to share their transaction data with trusted third-parties if it gave them a more personalized experience – this compares to 42 percent of consumers overall.
- Geographically, consumers in Singapore (54 percent) and the US (49 percent) were most happy for banks to share their transaction data, whereas those in the UK (35 percent) and Germany (35 percent) were least in favor.
“Regulations such as PSD2 have forced banks to open up their banking systems through APIs, which in turn is creating a new wave of innovation in financial services. As the research shows, a significant number of consumers are happy for banks to share their transaction data and would even go as far as using Facebook or Amazon for banking services in the future,” said Danny Healy, client architect, office of the CTO, MuleSoft. “As choice and competition increases in financial services, traditional banks can’t afford to ignore the demands of the younger generation who expect a seamless experience across digital channels. Traditional banks have really only just scratched the service when it comes to open banking, but by taking an API-led connectivity approach, they will be able to innovate much faster and better meet customers’ digital expectations.”
Disconnected banking experiences testing customer loyalty
The research reveals that banks are currently struggling to provide a connected experience (i.e. knowing a customers’ preferences across all channels and providing access to the information they need within a timely manner).
- 55 percent of consumers believe banks provide a disconnected experience.
- 51 percent of consumers would consider changing bank as a result of receiving a disconnected experience; this number jumps to 61 percent of 18-34 year-olds.
- Geographically, consumers in the US (61 percent), Australia (61 percent) and Singapore (60 percent) were most likely to consider changing bank.
- Nearly a third (32 percent) of consumers have given up on an activity or a request when interacting with a bank as information sharing was too difficult.
Inefficient processes causing frustration
The findings highlight banks could do a lot more to improve their existing processes to make them more efficient and customer-centric.
- More than half (57 percent) of consumers believe that opening a bank account should take no longer than one hour.
- Almost half (47 percent) of consumers believe applying for a mortgage should take no longer than one day.
Many consumers report having to re-submit or re-state previously provided information when completing banking transactions, of those that have done so the areas most at fault are:
- Opening a bank account (38 percent).
- Applying for a credit card (36 percent).
- Applying for a loan (28 percent).
- Applying for a mortgage (27 percent).
New communication channels
However, the research revealed that banks can’t just concentrate on the here and now, as new technology is rapidly increasing consumer experience expectations.
- Just under half (44 percent) of consumers would like to use popular messaging services such as WhatsApp, Viber, iMessage or Facebook Messenger to securely interact with banks. The number is even higher (56 percent) amongst 18-34 year-olds.
- 25 percent of consumers have engaged with a chatbot when contacting a bank over the last 12 months. However, the UK was the least advanced in this regard, with just 15 percent of consumers having engaged with a chatbot when contacting their bank during the last year.
“Delivering a connected experience remains a challenge for many banks. As the research shows, those banks that fail to deliver a connected experience risk damaging customer loyalty at a time when it is easier than ever before for consumers to change banking provider,” added Healy. “Fintechs and challenger banks are changing consumer expectations of what is possible. Today consumers can open bank accounts in a matter of minutes and have mortgage applications processed in hours. The traditional players can no longer afford to stand still and must ensure they can speed up their processes. Banks need to be able to unlock customer data from siloed systems and integrate their existing legacy systems with new digital technologies and channels. By building an application network with API-led connectivity, banks can make this a reality and truly transform the customer experience.”
Global Banking & Finance Review
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