CHICAGO—A new study indicates that a gap exists between digital consumer behavior and banking delivery—and that evolving to digital bank model could drive 5.6% more profitability.
At the BAI Retail Delivery conference here, Cisco announced the U.S. fndings from its global study of more than 7,000 consumers in 12 countries regarding digital consumer behavior.
The study indicated that while U.S. consumers are living a “digital lifestyle,” they perceive that their primary bank is lagging in the ability to deliver convenient, personalized service.
Cisco explained the divide goes beyond Generation Y, with 65% of all U.S. respondents suggesting that they would move money to a different financial institution for personalized “Internet of Everything”-enabled services, in areas such as mobile payments, branch recognition, smartwatches, real-time videoconferencing, and automated financial advice derived from deep analytics.
Cisco defines the Internet of Everything as bringing together people, process, data, and things to make networked connections more relevant and valuable
Of the 603 U.S. consumers surveyed: 41% of Generation X and 36% of Boomers expressed that their bank does not understand their needs; 43% of all surveyed believe their bank does not know them and consequently cannot deliver personalized service; and nearly a third of customers will look into alternative banking relationships because they do not believe their bank is helping them reach their biggest financial goals.
Economic analysis from Cisco Consulting Services projects that changing the customer-relationship model in the branch and other digital channels could result in a bottom-line increase of possibly 5.6% for a typical financial services firm. For a typical financial institution in the United States with $10 billion in revenue, this represents a $392 million annual profit increase.
Related links
BAI: Making Omni-Channel Experience A Reality