When it comes to customer convenience, most banks can give themselves a pat on the back.
They get high marks from customers for providing anywhere, anytime access through digital channels including mobile and online banking. Customers see them as doing a good job of facilitating digital payments. Omni channel initiatives—providing consistent account information across all points of contact—have largely met customer expectations.
Those are the some of the positive findings in the inaugural FIS Performance Against Customer Expectations (PACE) Index survey, which analyzed data from 9,000 banking customers in nine countries: U.S., U.K., Brazil, Canada, France, Germany, India, Netherlands, and Thailand. The survey measured bank customer satisfaction with 18 banking service attributes that FIS believes are essential to developing relevance and trust with customers. The 18 attributes are in four categories: basic banking requirements; convenience, choice, and access; needs fulfillment and empowerment; and support to achieve goals.
So much for what customers liked …
What disappointed customers
However, in the areas of security, transparency, and fairness, many customers say their banks are falling short of expectations. Customers also fault banks for not doing enough to help them achieve their financial goals or intuitively anticipating their future needs.
Bottom line is that 77% of bank customers worldwide believe that their bank is not meeting expectations.
So while banks are forging ahead with solutions that focus on access and convenience, they are ignoring some of the foundations of the bank/customer relationships.
“Banks are providing transactional convenience to their customers,” explains Paul McAdams, senior vice- president, Thought Leadership, FIS. “Banks need to build on that strength and provide customers with greater control over their finances, more transparency, and sound money management.”
“Customers are used to exceptional experiences in the digital world outside of banking and those expectations influence what they want from their bank,” McAdams continues. “There is a big opportunity to banks to move beyond basic transactions and deepen customer relationships.”
Variations by country
The PACE index measures, on a scale of 1 to 100, how financial institutions are performing against customer expectations.
Bank customers in more developed nations scored higher on the index, although no country’s banks earned a perfect 100. German banks scored best, with an index performance of 83, followed by the U.S. at 80, and the U.K. at 79. The lowest scoring countries were Thailand (62), Brazil (64), and India (68).
Although the survey results point to localized differences, from an overall perspective, customers in each of these nine countries want essentially the same thing, says McAdams.
“Globally, customers are very happy with convenience, but they want their bank to be fair and reliable,” says McAdams. “For global banks, this implies that a consistent strategy across countries can work.”
While U.S. banks hit the 80 out of 100 reported above, they scored much lower than their counterparts in other countries when it comes to security, with more U.S. customers saying that they don’t feel banks are doing enough, particularly in protecting customer identities.
While part of the low score could be attributed to U.S. customers’ skittishness from high-profile merchant security breaches such as Target and Home Depot, a more likely cause is the lack of EMV-compliance credit cards in the U.S., says McAdams. “Security experts continue to warn that the U.S. is a target of card fraud because of our lack of EMV infrastructure.”
Variations by institution type and size
Index scores reported also varied by type of institution.
• Credit unions received a score of 91, driven mostly by high ratings of attributes related to in-person service, transparency, and fairness.
• Community banks, with an index score of 84, did well in in-person service but the score was brought down by lower ratings in customer loyalty and rewards, customized products, and helping customers achieve their financial goals and gain control of their finances.
“Community banks underperformed on rewarding customers for their business,” says McAdams. “These banks should look at reward and loyalty programs to decrease the gap between customer expectations and bank performance.”
• Large and mid-sized banks were the worst performers at an index of 71. These banks scored well in convenience and choice, but underperformed in safety, security, trust, and helping customers achieve financial goals.
“Large banks excel at mobile, online banking, and digital payments,” according to McAdams. “But there are gaps in customer perceptions around fairness and transparency.”
What banks should do
While banks have focused on their digital offerings and anytime/anywhere access, they should consider taking a step back and focusing on the basics.
“Honesty, fulfilling promises, and keeping customers’ best interests in mind are the building blocks for meeting customer expectations,” says McAdams. “Customer expectations are constantly evolving, but the basic foundation of trust and relevance will always remain.”
To improve performance, FIS recommends that banks:
1. Streamline and optimize the front and back office to deliver predicable service safely and at a low cost.
2. Scrutinize the customer journey. Look at processes such as account opening and problem resolution through the eyes of the bank customer to understand the gaps between what customers expect and what the bank is actually delivering.
3. Include the personal touch.
Even digital millennials still use in-person banking services, particularly when they are looking for help with daily financial activities and life events, says McAdams.
4. Focus on creating and sustaining high-value and highly engaged relationships. McAdams notes that customers are willing to pay for high quality services so banks should clearly communicate to customers the value of the services they provide.
Download FIS report “Consumer Banking Expectations Index: Understanding The Consumer Expectation Gap” [Registration required]