Winning through customer experience - ey.com

1 Winning through customer experienceEY Global consumer Banking Survey 2014 ContentsWelcomeExecutive summaryGlobal insights A promising, active environment The power of trust The experience is what matters Key opportunities for banksSegment insights Getting to know your customer segments Industry and institutional sentiments Opportunities for segment-driven investmentsWhy banks need to act nowConclusionResearch methodologyCountry contacts12620 34404244 WelcomeWhen EY s second global consumer banking survey was published in June 2012, the global ][gfgeq oYk kljm__daf_ lg j][gn]j Yf\ [gfkme]j [gf \]f[] af l`] af\mkljq j]eYaf]\ ]plj]e]dq dgo$ hYjla[mdYjdq af l`gk] [gmflja]k ZY\dq Y^^][l]\ Zq l`] _dgZYd fYf[aYd [jakak Yf\ alk Y^l]jeYl`&Fast forward to this new edition of our survey and the outlook for retail banking appears more hgkalan]& 9dl`gm_` kge] ][gfgea]k kladd kljm__d] lg \]dan]j kmklYafYZd] _jgol`$ l`] _dgZYd ][gfgea[ j][gn]jq Yhh]Yjk lg Z] lYcaf_ `gd\&.

2 Gfkme]j [gf \]f[] af l`] ZYfcaf_ af\mkljq ak gf l`] jak]$ Yk ak ljmkl af af\ana\mYd afklalmlagfk$ Yf\ [mklge]jk Yj] ZjgY\dq kYlak ]\ oal` l`]aj hjaeYjq ZYfcaf_ j]dYlagfk`ahk&However, the primacy of the bank s relationship with its customers is under threat as never Z]^gj]& <]eYf\k Yf\ ]ph][lYlagfk [gflafm] lg ]ngdn]$ g^l]f ^m]d]\ Zq ]ph]ja]f[]k gmlka\] fYf[aYd k]jna[]k$ Yf\ [gfkme]jk Yj] af[j]Ykaf_dq dac]dq lg \]n]dgh j]dYlagfk`ahk oal` emdlahd] hjgna\]jk& =e]j_af_ l][`fgdg_q$ Yf\ l`] af[j]Ykaf_ mk] g^ egZad] \]na[]k ^gj Zgl` ZYfcaf_ Yf\ payments, is making it easier for new entrants to challenge the status quo and exploit areas of \akkYlak^Y[lagf Yf\ mf\]jafn]kle]fl&This year s survey includes responses from more than 32,000 retail banking customers across 43 countries and, although retail banking remains a local business, it is striking how many hYjYdd]dk o] [Yf \jYo Y[jgkk eYjc]lk& Af l`ak ]\alagf g^ l`] kmjn]q$ o] ^g[mk gf l`] ^gddgoaf_ key questions: What is the role of trust in creating customer advocates, and how valuable is trust to the overall banking relationship?

3 Are banks investing in the right aspects of the customer experience ? How well are banks performing on key interactions from the basics of day-to-day transactions, lg j]kgdnaf_ hjgZd]ek Yf\ `]dhaf_ [mklge]jk Y[`a]n] l`]aj fYf[aYd _gYdk7 How similar are customer behaviors across the globe? How well are banks prepared to fend off potential new market entrants?>gj l`] jkl lae]$ o] n] \]n]dgh]\ ]a_`l _dgZYd k]_e]flk lg hgjljYq k`a^laf_ [gfkme]j k]flae]fl$ g^l]f ajj]kh][lan] g^ _]g_jYh`q& O] ogmd\ o]d[ge] l`] ghhgjlmfalq lg e]]l oal` qgm Yf\ hjgna\] [mklgear]\ f\af_k lg \]dan]j Y\\alagfYd afka_`l$ Yf\ o] n] hjgna\]\ Y dakl g^ [gmfljq [gflY[lk Yl l`] ]f\ g^ l`ak j]hgjl& Hd]Yk] nakal mk Yl ooo&]q&[ge'_dgZYd[gfkme]jZYfcaf_kmjn]q ^gj egj] af^gjeYlagf$ af[dm\af_ l`] YZadalq lg Y[[]kk Y\\alagfYd kmjn]q \YlY Yl qgmj [gfn]fa]f[]& Bill Schlich Global Banking & Capital Markets Leader1 Winning through customer experienceExecutive summary.

4 Gf \]f[] af l`] ZYfcaf_ af\mkljq ak gf l`] jak]$ Yf\ ljmkl af [mklge]jk gof fYf[aYd k]jna[]k hjgna\]jk ak `a_`& :ml [mklge]jk Yj] gf l`] egn]$ oal` mfhj][]\]fl]\ Y[[]kk lg [geh]laf_ ZYfck Yf\ lg f]o lqh]k g^ fYf[aYd k]jna[]k hjgna\]jk& :Yfck emkl ]Yjf l`] highest levels of trust in order to j]lYaf [mklge]jk$ oaf egj] Zmkaf]kk Yf\ [j]Yl] _]fmaf] dgqYdlq&The banking industry is poised for growth;gf \]f[] af l`] ZYfcaf_ af\mkljq ak j]lmjfaf_$ oal` ++ g^ [mklge]jk _Yafaf_ [gf \]f[] af l`] hYkl )* egfl`k Yf\ gfdq )1 dgkaf_ [gf \]f[]$ [gehYj]\ oal` Y ,( \][daf] af gmj dYkl kmjn]q& O`ad] em[` of the improvement may simply be a restoration of [gf \]f[] dgkl af l`] oYc] g^ l`] ?dgZYd >afYf[aYd Crisis, this improved sentiment can only help fYf[aYd afklalmlagfk Yk l`]q ogjc lg kgda\a^q Yf\ ]phYf\ j]dYlagfk`ahk oal` l`]aj [mklge]jk& L`]j] ak ka_fa [Yfl Zmkaf]kk ghhgjlmfalq Ykkg[aYl]\ with customers who are true advocates, those who are very likely to recommend their primary fYf[aYd k]jna[]k hjgna\]j H>KH!

5 & Kh][a [Yddq$ ,, of advocates opened new accounts or services at l`]aj H>KH af l`] hYkl )* egfl`k Yf\ 1 afl]f\ lg [gfkgda\Yl] ]n]jql`af_ Yl l`]aj H>KH af l`] f]pl q]Yj& Kaf[] 0- g^ kmjn]q j]khgf\]flk \] f]\ l`]aj H>KH Yk Y ZYfc$ al ak Yf ghhgjlmf] lae] ^gj ZYfck to increase advocacy and expand their customer j]dYlagfk`ahk&An improved experience is key to realizing that growthCustomers generally trust their primary providers, but the highest level of trust is a clear differentiator in creating advocacy, and customer experience ak Y c]q \jan]j g^ l`Yl d]n]d g^ ljmkl& O`ad] gn]jYdd fYf[aYd klYZadalq oYk l`] lgh j]Ykgf ^gj [mklge]jk [gehd]l] ljmkl af l`]aj H>KH$ l`] k][gf\ egkl cited response was the way I am treated, followed closely by other elements of the experience , such as communications, quality of advice and complaint `Yf\daf_&Moreover, the most common reason customers cited for opening or closing accounts in the past q]Yj oYk l`] ]ph]ja]f[] oal` l`]aj fYf[aYd k]jna[]k hjgna\]jk$ ]\_af_ gml jYl]k'^]]k Yf\ [gfn]fa]f[] Yf\ kmjhYkkaf_ ZjYf[` dg[Ylagfk Yf\ Y[[]kkaZadalq&So the experience drives not only complete trust, and thus advocacy and referrals, but also the amount of business customers are placing with their H>KH& Mf\]jklYf\af_ l`] aehgjlYf[] g^$ Yf\ l`]aj h]j^gjeYf[] gf$ kh][a [ Ykh][lk g^ l`] ]ph]ja]f[] oadd Yddgo fYf[aYd afklalmlagfk lg eYc] lYj_]l]\ afn]kle]flk&2ooo&]q&[ge'_dgZYd[gfkme]jZY fcaf_kmjn]qO`ad] [mklge]jk Yj] egkl dac]dq lg hjYak] l`]

6 Aj H>KH ^gj convenience and security, those have quickly become eafaeme j]imaj]e]flk& Em[` g^ l`] ]eh`Ykak oal`af \]n]dgh]\ [gmflja]k `Yk Z]]f gf aehjgnaf_ ljYfkY[lagfk& Dac] 9 LEk af l`] 0(k Yf\$ egj] j][]fldq$ gfdaf] banking, mobile banking was viewed initially as a point g^ \a^^]j]flaYlagf Yegf_ l`gk] fYf[aYd afklalmlagfk g^^]jaf_ al& @go]n]j$ fgo al ak ]ph][l]\$ Ydgf_ oal` l`] YZadalq lg egn] k]Yed]kkdq Y[jgkk [`Yff]dk& L`] fYf[aYd landscape is different in emerging markets, but no less [`Ydd]f_af_& L`] afl]_jYlagf g^ l][`fgdg_q$ ]kh][aYddq egZad]$ `Yk afljg\m[]\ hjgna\]jk lg Yf af mp g^ f]o [mklge]jk k]]caf_ ZYka[ fYf[aYd k]jna[]k&When asked to evaluate 31 experience elements or Z]f] lk kmjn]q j]khgfk]k hgafl]\ lg k`gjl^Yddk af meeting basic expectations, such as transparency of fees and communication, and the continued importance g^ ]^^][lan] hjgZd]e `Yf\daf_& Af Y\\alagf$ l`] j]kmdlk hjgna\]\ afka_`l aflg ghhgjlmfala]k ^gj H>KHk lg differentiate themselves by customizing products and solutions to meet customers needs and helping them Y[`a]n] l`]aj fYf[aYd _gYdk&Key improvement areas for banksTransparency of fees and simplicity of offers and communication.)

7 This is one of the most kgm_`l%Y^l]j Z]f] lk f]]\af_ aehjgn]e]fl& ;mklge]jk oYfl fYf[aYd afklalmlagfk lg Z] [d]Yj]j YZgml o`Yl l`]q g^^]j$ l`] ^]]k l`]q j] [`Yj_af_ Yf\ `go lg Ynga\ hYqaf_ ^]]k&Omni-channel experience . ;mklge]jk Yj] kYlak ]\ oal` l`] [gfn]fa]f[] g^ ljY\alagfYd banking but expectations are constantly rising as new technologies and consumer behaviors \]n]dgh& Af[j]Ykaf_dq$ [mklge]j Z]`Ynagj ak [`Yf_af_ lg afngdn] o]Z$ egZad]$ kg[aYd e]\aY Yf\ af%h]jkgf afl]jY[lagfk ^gj Y kaf_d] hmj[`Yk]& Lg klYq [geh]lalan]$ fYf[aYd afklalmlagfk f]]\ lg [gflafm] Zmad\af_ gml [`Yff]d [YhYZadala]k lg hjgna\] *,'/ j]Yd%lae] Y[[]kk lg ZYfcaf_$ k]Yed]kkdq$ Y[jgkk [`Yff]dk& More and better advice. Customers tell us they are willing to increase their accounts and ZYdYf[]k af ]p[`Yf_] ^gj ZYfck `]dhaf_ l`]e \]n]dgh l`]aj fYf[aYd hdYfk Yf\ _gYdk demonstrating the power of personalizing the experience and creating a mutual exchange g^ nYdm]& L`mk$ ZYfck f]]\ lg hjgna\] Y\na[] l`Yl ak [mklge]j%[]flja[$ ZYk]\ gf Y `gdakla[ h]jkh][lan] g^ l`] [mklge]j k mfaim] kalmYlagf Yf\ f]]\k& =imahhaf_ Y\nakgjk oal` l`] ja_`l kcadd k]lk$ af[]flan] kljm[lmj]k Yf\ f]logjc g^ kh][aYdaklk3 hgkalagfaf_ l`] ZjYf[` Yk Y kYd]k'Y\na[] []fl]j l`Yl hjgna\]k h]jkgfYdar]\ YkkaklYf[]3 Yf\ j]\] faf_ l`] jgd] g^ l`] [Ydd []fl]j Yk Y naYZd] [`Yff]d ^gj hjgna\af_ Y\na[] Yj] Ydd kljYl]_a]k l`Yl k`gmd\ Z] ]phdgj]\&Greater use of data and digital channels to empower customers.

8 Banks have access to vast data sets, both in-house and externally available, that they should leverage to h]jkgfYdar] l`] ]ph]ja]f[] Yf\ ]ehgo]j [mklge]jk lg eYc] \][akagfk& C]q l][`faim]k Yf\ lggdk af[dm\] eYcaf_ \a_alYd [gfl]fl \qfYea[ ZYk]\ gf [mklge]j hjg d]k$ k`goaf_ o`Yl [mklge]jk dac] qgm `Yn] Zgm_`l$ Yf\ hjgna\af_ h]jkgfYd fYf[aYd eYfY_]e]fl lggdk l`Yl `]dh [mklge]jk kYn]$ afn]kl Yf\ kh]f\ egj] oak]dq&Enhanced problem resolution experience . Solving problems in a way that leaves [mklge]jk n]jq kYlak ]\ oal` l`]aj j]kgdmlagf `Yk dgf_ Z]]f$ Yf\ j]eYafk$ g^ ka_fa [Yfl aehgjlYf[] af l`] j]dYlagfk`ah& O`ad] kge] hjgZd]ek Yj] k]d^%af a[l]\$ egkl kl]e ^jge Yf akkm] oal` l`] fYf[aYd k]jna[]k hjgna\]j gj Yfgl`]j [gehYfq'h]jkgf& @go l`] hjgZd]e ak `Yf\d]\ eYll]jk& L`] kmjn]q j]kmdlk km__]kl l`Yl l`]j] ak Yf Yklgmf\af_ mhka\] a^ [mklge]jk Yj] n]jq kYlak ]\ oal` l`]aj hjgZd]e j]kgdmlagf n]jkmk Y \gofoYj\ khajYd af ljmkl Yf\ l`] j]dYlagfk`ah a^ \akkYlak ]\& EYcaf_ al ]Ykq ^gj [mklge]jk lg jYak] akkm]k$ equipping the front line to handle certain problems and escalate others, explaining why the issue occurred, and following up to ensure resolution is complete are examples of ways to aehjgn] kYlak^Y[lagf oal` l`] ]ph]ja]f[]

9 &Make banking simple and clearHelp customers make the ja_`l fYf[aYd decisions in a complex environmentWork with customers when problems arise and become their advocateCustomers expect more3 Winning through customer experienceCustomers products, attitudes and preferences are not mfaim] lg Y kh][a [ [gmfljq gj j]_agf& O] _jgmh]\ l`] results of the more than 32,000 customers into eight segments that share common behaviors, expectations, hj]^]j]f[]k Yf\$ l`]j]^gj]$ kgdmlagfk& The segments vary in size, assets and willingness to pay egj] ^gj c]q Z]f] lk >a_mj] )!& L`gk] l`Yl Yj] egkl promising but view banks as having a limited competitive Y\nYflY_] gn]j Ydl]jfYlan] hjgna\]jk ]&_&$ l`] MhoYj\dq Mobile customers present the greatest challenge to traditional banks ability to retain all or part of the j]dYlagfk`ah& DYl]j af l`ak j]hgjl o] hjgna\] afka_`lk aflg l`] Z]f] lk l`Yl ]Y[` k]_e]fl nYdm]k egkl$ hj]^]jj]\ [`Yff]dk ^gj kh][a [ transactions, current products and services, engagement \jan]jk Yf\ egj]& L`] k]_e]flYlagf YfYdqkak hjgna\]k Y unique lens and highlights opportunities to consider segment-ZYk]\ kljYl]_a]k lg egj] ]^^][lan]dq afn]kl ZYfc j]kgmj[]k& O`ad].

10 ( g^ [mklge]jk \g fgl `Yn] \] fal] hdYfk lg gh]f or close any accounts in the next 12 months, this should fgl Z] afl]jhj]l]\ Yk dgqYdlq& G^ l`gk] o`g \] fal]dq intend to maintain their current relationships, 22% af\a[Yl]\ l`Yl Ydd fYf[aYd k]jna[] [gehYfa]k Yj] l`] kYe] Yf\ )/ klYl]\ l`Yl al oYk lgg \a^ [mdl gj lae] [gfkmeaf_ lg [`Yf_]& ;mklge]jk Yj] fgl Z]af_ j]lYaf]\3 afkl]Y\$ l`]q kaehdq j]eYaf Yf\ Yj] nmdf]jYZd] lg [geh]lalan] l`j]Ylk&Although traditional banks are currently seen as being af l`] Z]kl hgkalagf lg \]dan]j gf [gj] Z]f] lk km[` Yk branch and ATM access, they are most vulnerable on Z]f] lk Ykkg[aYl]\ oal` l`] `a_`]kl _jgol` hgl]flaYd$ ]&_&$ hjgY[lan]dq Yd]jlaf_ [mklge]jk lg hjg\m[lk Yf\ k]jna[]k Yf\ [mklgearaf_ l`]e lg l l`]aj f]]\k& Traditional banks scored lowest on mobile banking features vis vis the competition, and their competitive advantage in online banking features is also relatively keYdd& L][`fgdg_q affgnYlagf `Yk ]fYZd]\ \a^^]j]fl lqh]k of companies to provide banking services, particularly for transaction accounts, and banks may be on the verge of []\af_ l`]aj hgkalagf Yk l`] hjaeYjq hjgna\]j& Oal` gfdaf]