Contents 3 Preface 4 Key Findings 7 Chapter 1: Unlocking Pathways to Greater Customer Loyalty 8 Customers Express Conflicting Sentiments toward Banks 12 The Need for a Customer Experience Index 21 The Growth of Mobile Banking2 5 Chapter 2: At a Crossroads, Retail Banks Must Identify and Prioritize Core Strengths 26 The Ground Beneath Banks Is Shifting 28 Traditional Tactics Are Less Effective in the Current Environment 32 The Way Forward: Extreme Measures for Extreme Times40 Methodology41 About Us
PrefaceCapgemini and Efma are pleased to present the 2012 World Retail Banking Report.Retail banks around the world are struggling to maintain their competitiveness in the face ofsevere external challenges. Massive debt loads are threatening the global economy, while stringentregulations put in place as a result of the financial crisis of 2008 are staunching traditional revenuestreams. Customers, still distrustful of the industry, have become increasingly accepting of non-bank alternatives, and social media is giving them an opportunity to publicly explore them.More than ever, retail banks must strive to create stronger bonds with their customers. The2012 World Retail Banking Report addresses this imperative by establishing a new framework foridentifying and measuring success in retail banking. Specifically, our Customer Experience Index(CEI) offers a mechanism for accurately taking stock of the critical measure of customer loyalty.The CEI improves upon traditional measures of customer attitudes by incorporating customers’standards and expectations, alongside their channel preferences, to shed light on whethercustomers are having positive experiences in the areas most important to them. Our findings showthat positive customer experience is an extremely predictive indicator of customer loyalty.We created the CEI by beginning with a large, in-depth investigation of the many voices andopinions around the world that make up the modern bank’s retail customer base. Our Voice ofthe Customer surveys queried more than 18,000 customers in 35 countries across six geographicregions, making it one of the most detailed studies of its kind.Findings from the CEI led us to identify three models of emerging retail-banking specialists.Focusing on one or two of the models—product leader, distributor, and utility/processor—willgive banks an opportunity to stand out in today’s increasingly competitive marketplace. Banksshould prioritize the movement toward a more focused approach as a long-term goal, executed insync with efforts to improve customer loyalty.In this report, we also examine mobile banking’s role in improving the overall customerexperience. While mobile banking adoption is still low, it could become an extremely compellingchannel for large numbers of customers. Gaining a better understanding now of how to shapepositive experiences through mobile will position banks for the future.As always, it is a pleasure to provide you with our findings. We hope you continue to find value inthe World Retail Banking Report’s insights.Jean Lassignardie Patrick DesmarèsGlobal Head of Sales and Marketing Secretary GeneralGlobal Financial Services EfmaCapgemini
4 2012 World Retail Banking Report Key Findings C ustomers may be the lifeblood of retail banking, but to many institutions they remain somewhat inscrutable. Our surveys of thousands of customers across the globe have found that traditional measures of customer attitudes can yield confusing results. For example, customers say they are largely satisfied with their banking relationships, even though most do not trust their banks and half are unsure they will stay with them in the short-term. Banks recorded a global average of 65% in terms of customer satisfaction, with North American banks having the highest average levels at 80%. Despite this outcome, only 50% of customers are confident they will remain with their primary bank over the next six months. Further, only 15% have trust and confidence in the banking industry. The inability of current measures to present a coherent picture of customer expectations and behaviors is problematic, given the large number of secular changes currently impacting the industry. Globally, extremely high debt levels, political turmoil, regulatory change, and evolving customer habits are creating an environment more difficult than any the industry has experienced in decades.
Key Findings 5O ur 2012 World Retail Banking Report offers a mechanism for better understanding customers, as well as a prescription for navigating the current terrain. Our Customer Experience Indexproved to be an effective indicator of customer loyalty, which is an essential element of retaining andattracting customers. We found an almost linear relationship between positive customer experienceand the likelihood of staying with a bank.While banks modestly increased their levels of positive customer experience from last year, theystill are not delivering enough positive experiences. Just over 40% of customers are having positiveexperiences through most channels today. The mobile emerged as the channel through which thegreatest improvement in positive customer experience is likely to occur in most regions.As they seek to improve the level of positive customer experience they offer, banks must also respondto the changes occurring in the environment by developing a long-term strategic plan. Importantly,the plan should not be to “do everything.” Rather, banks should focus on a specific area of expertisewithin the distinct disciplines of product innovation, distribution, and utility/processing. A gradualtransformation, involving investment in core strengths, will help lay the groundwork for the future. Having a long-term strategy and combining it with greater insight into customer behaviors and attitudes offers a compelling argument for greater retail banking success. While banks are making progress in this area, our report suggests specific areas for further improvement.
7 Chapter 1Unlocking Pathways toGreater Customer LoyaltyLong-standing measures point to contradictory customer feelings toward banks. Customers around the world continue to have low trust and uncertain loyalty toward banks, yet overall satisfaction remains high in most regions.Globally, positive customer experience increased modestly from 35.8% in 2011 to 42.7% in 2012. Canada led all countries with the highest levels of positive customer experience, defined as satisfaction along the dimensions most important to customers. Other regional leaders were Australia, Norway, Turkey, South Africa, and Argentina.Positive customer experiences generate loyalty, but few banks consistently deliver them. Less than 50% of customers are having positive experiences through most channels today. Banks need to work harder to ‘wow’ customers as a way to strengthen relationships, as well as to improve loyalty and profitability.The mobile channel had the highest increases in positive customer experience in most regions, but the branch and internet remain the two most important channels. While mobile banking is still nascent, uptake could accelerate more quickly than internet banking adoption, despite concerns about security, consistency, and ease of usability.
8 2012 World Retail Banking Report Customers Express Conflicting Sentiments toward Banks Despite low levels of trust, confidence, and loyalty, is also the reason that many unbanked customers have customer satisfaction with banks remains high in not put their money in a bank in the first place. The most regions. lower the trust levels in banks, the wider the opportunity Satisfaction levels have little impact on loyalty. Despite for newer entrants, including non-banks, to attract overall high satisfaction, 40% of customers are not sure disenfranchised customers. they will stay with their primary bank, and 9% are likely to change in the next six months. Despite the importance of trust, the industry has struggled, especially in recent years, to provide it. Trust Canada’s banks led the world in customer satisfaction in the banking industry has been especially tenuous since at 82%, followed closely by those in Switzerland the start of the global financial crisis. Twice as many (79%), the United States (78%), India (78%), and the customers around the globe (31%) say they have little or Philippines (78%). no trust in the banking system, compared to the 15.3% Eight markets, including six in Europe, experienced who say they do (see Figure 1). The highest rates of double-digit improvements in customer experience. distrust exist in the Middle East and Africa (50%), Asia- Pacific (44%), and Latin America (38%). Despite improvements, trust levels are still low Compared to last year, some signs of improvement Trust is a fundamental element of the banking system. emerged. Banks in North America experienced a 7% Without it, consumers would have little reason to deposit increase in trust and confidence levels compared to 2011, their income into current accounts or put their retirement while those in Western Europe experienced an increase funds into long-term savings accounts. Low trust levels of 3%. These improvements are heartening, given the create a less efficient system as customers pull their funds multitude of economic, regulatory, and competitive out of banks in search for better options. A lack of trust challenges facing banks in the U.S. and euro zone. Figure 1 Level of Agreement That Banking Customers Have Trust and ConfidenceFIGURE 1 in the Banking Industry (%), 2011–2012 Level of Agreement That Banking Customers Have Trust and Conﬁdence in the Banking Industry (%), 2011–2012 Percentage Point Change Global Average Global Average Percentage Point Change 2011–12 (31%) (15%) 2011–12 -1 18% 23% 3 Western Europe 19% 20% 21% 20% -8 North America 7 29% 13% 30% 13% 6 Central Europe – 24% 13% 38% 13% -4 Latin America 6 42% 7% 50% 8% NA Middle East & Africa NA NA NA 44% 6% 10 Asia-Pacific -3 34% 9% Disagree and Strongly Disagree Agree and Strongly Agree 2012 2012 2011 2011 Note: Total may not add to 100% as the percentage of respondents with answers corresponding to ‘Somewhat Disagree’, ‘Neutral’, and ‘Somewhat Agree’ have not been shown Source: 2012 Retail Banking Voice of the Customer Survey, Capgemini, 2011, 2012
chapter 1 9Customers do not feel strong loyalty Also, as customers increasingly use the internet toIn addition to anemic trust and confidence, banks are discover information about competitive financialinspiring fairly low levels of customer loyalty, a critical offerings, loyalty may emerge as a large factor keepingelement of retail banking. Loyal customers not only buy some from switching. A significant regulatory shift inmore products over longer periods of time, they become some markets will even make it easier for customers toadvocates of a firm and inspire other people to buy its switch from one bank to another via a shared accountproducts. Especially in times of stress, as when the global database and account portability between banks (howeverfinancial crisis and the European debt crisis caused the massive inertia may still mean this is not a watershedbanks in the U.S. and Europe to experience a surge in moment, more of an erosion). In such an environment,withdrawals and a drop in loan applications, institutions customer loyalty would be essential not only to counterwith the most loyal customers benefit by having a reliable the ease of switching, but to keep retail banking frombase of individuals to supply both deposits and a demand becoming even more of a commodity than it already is.for loans. Despite the importance of having a loyal customer base,Customer loyalty will become more important as non- only 51% of customers globally are confident they willbank competitors enter the market and increase the array remain with their primary bank over the next six months.of available financial transaction options for consumers. A large group of customers do not have strong feelingsFigure 2 Customers’ Likelihood to Change Their Primary Bank in the Next Six Months, by Country (%), 2012 FIGURE 2 Customers’ Likelihood to Change Their Primary Bank in the Next Six Months, by Country (%), 2012 Global Average Global Average Total Unsure or (40%) (9%) Likely to Leave (%) China 70% 12% 82% Taiwan 76% 4% 80% Vietnam 54% 15% 69% Saudi Arabia 52% 15% 67% UAE 44% 20% 64% Germany 29% 33% 62% India 47% 13% 60% Hong Kong 56% 4% 60% Austria 25% 34% 59% Spain 45% 12% 57% Mexico 45% 11% 56% Brazil 48% 7% 55% Japan 52% 2% 54% Argentina 43% 10% 53% Singapore 47% 6% 53% Portugal 47% 4% 51% Turkey 43% 8% 51% Czech Republic 43% 7% 50% Italy 45% 5% 50% Poland 40% 7% 47% Switzerland 24% 22% 46% Sweden 38% 7% 45% Philippines 41% 3% 44% Russia 37% 6% 43% UK 34% 6% 40% Belgium 33% 7% 40% Norway 30% 9% 39% US 31% 7% 38% South Africa 29% 8% 37% Canada 31% 5% 36% Australia 28% 5% 33% Finland 30% 3% 33% Denmark 27% 6% 33% France 26% 5% 31% Netherlands 26% 3% 29% % Unsure % Very Likely and LikelySource: 2012 Retail Banking Voice of the Customer Survey, Capgemini, 2012
10 2012 World Retail Banking Report about their bank. These are the 40% of customers who Banks in Asia-Pacific were least successful in satisfying are unsure if they will stay with their bank. Another their customers, with their average of 53% putting them 9% of customers is likely to change banks in the next well below the global average. Asian-Pacific banks in six months (see Figure 2). The customers most likely to several advanced Asian markets do not appear to have switch banks are in Austria (34%), Germany (33%), and kept up with the high expectations and demands of Switzerland (22%). the sophisticated clientele in their regions. Of all the countries worldwide, Hong Kong and Japan scored the Despite low loyalty, satisfaction levels lowest, with only about one-quarter of their banking remain healthy customers expressing satisfaction. Banks have long used customer satisfaction measures to gain greater insight into how their products and Canada emerged as the country with the most customers service levels meet or surpass customer expectations. expressing satisfaction, at 82%. Canada achieved this Especially as the market has become more competitive, satisfaction level by increasing its satisfaction from last banks have attached a high level of importance, as well year by 14%. It surpassed the U.S., last year’s leader, as substantial internal resources, toward improving likely because of its solid performance throughout the customer satisfaction. These efforts appear to be paying global financial crisis, as well as increased investment off to some extent. in customer-focused technology. A quartet of countries followed in the 78% range: Switzerland at 79%; the U.S. Despite low levels of trust and loyalty, banks fared well at 78%; India at 78%, and the Philippines at 78%. in terms of satisfaction, recording a global average of 65%. Banks in North America had the most success Russia emerged as the satisfaction leader of Central in customer satisfaction, at 80% (see Figure 3). This Europe with 76% of its customers satisfied. This outcome outcome is understandable in light of the investments represented a percentage-point increase of 22.6% from in customer-focused technology North American banks 2011 and likely resulted from major service improvements have been making for some time. North American made by state-owned Russian banks, which control a banks also have had more success in identifying what is large part of the market. Mexico was the leader of Latin important to their customers compared to banks in some America at 73%, and South Africa the leader of the other regions, and some have even started partnering Middle Eastern and African nations at 73%. with social media firms to better engage their customers. Figure 3 Customer Satisfaction with Primary Bank (%) by Region, 2012FIGURE 3 Customer Satisfaction with Primary Bank (%) by Region, 2012 Global Average Global Average (4%) (65%) 2% North America 80% 3% Central Europe 71% 5% Latin America 69% 5% Middle East & Africa 67% 5% Western Europe 66% 2% Asia-Pacific 53% Dissatisfied + Very Dissatisfied Satisfied + Very Satisfied Note: Total may not add to 100% as the percentage of respondents with answers corresponding to ‘Somewhat Dissatisfied’, ‘Neutral’, and ‘Somewhat Satisfied’ have not been shown Source: 2012 Retail Banking Voice of the Customer Survey, Capgemini, 2012
chapter 1 11 Several countries experienced notable increases in loyalty. For the second year in a row, quality of service satisfaction levels between 2011 and 2012. Six of the emerged as the leading reason customers leave their eight countries that saw the highest increases were banks. Globally, more than half of customers (53%) said European, including the Czech Republic, which had the they would leave their banks because of the quality of highest percentage point increase (24%), putting it at a service they received (see Figure 4). Close behind, at 73% satisfaction level. India followed with an increase of number four, was ease of use, cited by 49% of customers. 23%, putting it at 78%, and Russia had the third-largest These findings indicate that banks able to offer high- increase (23%), giving it 76% satisfaction. quality, easily understood, and convenient services have an opportunity to differentiate themselves in the market. The European debt crisis appeared to be driving some of the results in the region. The relatively healthy nature of The second and third reasons customers leave their the Czech Republic’s banks throughout the crisis likely banks are price-related, including fees, cited by 50% of aided the large increase in satisfaction they experienced. customers, and interest rates, cited by 49%. Factors that Similarly, the crisis seemed to weigh on banks in Spain, are less important to the decision to leave include reward which at 50% had the lowest satisfaction level of the and loyalty programs at 28%, and a bank’s brand image European banks. or reputation, at 29%. Emerging relatively low on the list was a desire for personal relationships, cited by 34% Customers want high-quality service of customers. By identifying the factors that cause customers to attrite, banks can begin to make changes aimed at moving customers toward greater satisfaction, and ultimately, Factors That AffectAffectCustomers Leave a Banka(%), 2012 2011-12 Figure 4 FIGURE 4 Factors That Why Why Customers Leave Bank (%), 53% Quality of Service 55% 50% Fees 50% 49% Interest Rates 49% 49% Ease of Use 51% 44% Quality of Advice 45% 42% Accessibility / Convenience 45% 40% ATM Locations 39% 37% Branch / Bank Locations 36% 37% Product Availability 36% 34% Personal Relationship 35% 29% Brand Image / Reputation 27% 28% Rewards / Loyalty Programs 24% 22% Recommendations 19% % Responses 2012 2011 Source: 2012 Retail Banking Voice of the Customer Survey, Capgemini, 2011, 2012
12 2012 World Retail Banking ReportThe Need for a Customer Experience Index Customer experience is an effective predictor of loyalty. These findings contribute to an unclear picture of the Those enjoying a more positive experience are unlikely expectations and motivations of retail-banking customers. to change banks. They indicate a need for greater precision in measuring Customers who have been with their banks for at least retail-bank customer behaviors and attitudes, as a starting five years are at much lower risk of leaving, no matter point for better serving them. In 2011, we introduced how positive or negative their customer experience. the Capgemini Customer Experience Index (CEI), which measures customers’ banking experiences across Banks can grow profitable relationships by “wowing” 80 different touch points, as a means of gaining greater customers through positive experiences. Similarly, they insight into customer perceptions of their retail banking. risk losing customers through negative experiences. The ability to carry out day-to-day banking The CEI addresses the disconnect between measures conveniently and efficiently is more important to of customer confidence, loyalty, and satisfaction by customers than having specialized services. identifying the factors that are most important to Globally, positive customer experience levels increased customers, and then measuring satisfaction specifically modestly from 35.8% to 42.7%. At 56.2%, Canada had along those dimensions (see Figure 5). The CEI supports the highest levels of positive customer experience. in-depth views of customer experience along three The biggest improvements in customer experience came from Western European countries, including Norway with an increase of 12.3% and Netherlands Figure 5 Dimensions of Capgemini’s Customer Experience Index (CEI) with an increase of 10.9%. Central European countries followed, including Russia with an increase of 9.8%, Poland with one of 7.9%, and Turkey with one of 6.9%. ■ Current, Depository ■ Information Gathering Accounts & Payments ■ TransactingCurrent measures offer a mixed picture Cu ■ Credit Cards ■ Problem Resolution stoOn the surface, the findings of our surveys of customer ■ Loans ts ■ Account Status & History me uctrust, loyalty, and satisfaction appear to raise more rL ■ Mortgages od ife CEI Prquestions than answers. One might expect, for example, cy clethat extremely low trust levels would lead to less satisfied Channelscustomers. Yet the average global satisfaction level of65% is much higher than the average global trust and ■ Branch ■ Phoneconfidence level of 15%. One might also expect that ■ Internet ■ ATMsatisfied customers would be more loyal, yet the average ■ Mobileglobal loyalty level of 51% is much lower than the globalsatisfaction level. Source: Capgemini analysis, 2012
chapter 1 13dimensions: products (including current, savings and samples of at least 500 retail-banking customers in everypayments accounts; credit cards; loans; and mortgages); country covered. The resulting data can be segmented bychannels (including branch; internet; mobile device; a wide range of customer variables, including the region,phone; and ATM), and lifecycle stage (including country, or size of the city customers live in, as well asinformation gathering; transacting; problem resolution; their age, gender, investable assets, employment status,and account status and history). education, and other factors.The CEI is built upon Voice of the Customer data fromover 18,000 banking customers in 35 countries across sixgeographic regions (see Figure 6). Online surveys polledFigure 6 Geographic Scope of Customer Experience Index, 2012 CENTRAL EUROPE MIDDLE EAST & AFRICA ■ Czech Republic ■ Saudi Arabia ■ Poland ■ South Africa ■ Russia ■ UAE ■ TurkeyNORTH AMERICA■ Canada■ United States WESTERN EUROPE ASIA-PAcific ■ Australia ■ Austria ■ Norway lATIN AMERICA ■ China ■ Belgium ■ Portugal ■ Hong Kong ■ Argentina ■ Denmark ■ Spain ■ India ■ Brazil ■ Finland ■ Sweden ■ Japan ■ Mexico ■ France ■ Switzerland ■ Philippines ■ Germany ■ UK ■ Singapore ■ Italy ■ Taiwan ■ Netherlands ■ Vietnam WRBR 2012 New Countries WRBR 2011, 2012 CountriesNote: Austria was considered to be part of Western Europe for analysis purposes in 2012Country boundaries on diagram are approximate and representative onlySource: Capgemini analysis, 2012
14 2012 World Retail Banking ReportFigure 7 Customer Experience Index by Country, 2011–2012 2012 Global Average 2011 Global Average Point Change (72.1) (72.2) 2011–12 79.3 Canada 1.6 77.7 79.0 US 1.0 78.0 77.0 India 0.0 77.0 76.5 Australia 0.3 76.2 76.2 Norway 2.4 73.9 75.2 UK 0.8 74.5 74.7 Czech Republic 1.4 73.3 74.9 South Africa NA NA 74.6 Germany 0.4 74.2 74.6 Turkey 1.5 73.1 74.6 Philippines NA NA 73.7 Switzerland -2.3 76.0 73.4 Poland 1.3 72.2 72.7 Argentina NA NA 72.3 Sweden -1.2 73.5 72.2 Mexico 0.7 71.5 71.8 Russia 2.7 69.1 71.9 Austria -3.5 75.4 71.2 Portugal NA NA 71.2 Denmark NA NA 70.2 Vietnam NA NA 70.1 Belgium -1.7 71.8 70.0 Finland NA NA 69.7 UAE NA NA 69.5 Netherlands 1.5 68.0 69.5 Singapore -1.8 71.3 69.5 France 0.2 69.2 69.4 Brazil 0.3 69.1 68.8 Italy 0.2 68.6 68.5 Spain -2.0 70.5 67.6 China -1.1 68.7 66.8 Taiwan NA NA 65.6 Saudi Arabia NA NA 64.5 Hong Kong -0.9 65.4 63.4 Japan 1.3 62.2 0 10 20 30 40 50 60 70 80 90 100 CEI (On a Scale of 100) 2012 2011 Regional CEI LeaderNote: 10 markets were added to the Customer Experience Index only in 2012, and hence there is no 2011 data for theseSource: 2012 Retail Banking Voice of the Customer Survey, Capgemini, 2011, 2012
chapter 1 15North American markets continue to Banks are not “wowing” customerslead the CEI Banks have been much less successful when it comes toThe overall CEI, which examines customer experience delivering positive satisfaction along the dimensions mostacross all products, channels, and lifecycle stages, shows important to customers. These types of experiences arebanks doing an adequate job of delivering a positive crucial to truly delighting customers and winning theircustomer experience. As in 2011, the vast majority of loyalty. Viewed from this more in-depth perspective,countries are close to the global average CEI score of banks achieved a global positive experience average of72.1, with Canada and the U.S. still residing in the top only 42.7%. This outcome represented a modest increasespots at around 79 (see Figure 7). from the global average of 35.8% recorded in 2011.India emerged as the regional leader for the Asia-Pacific Banks in North America were likely to offer the mostbanks, scoring just behind the two North American positive customer experience levels, with Canada and theleaders with a 77. Norway was the Western European U.S. achieving 56.2% and 55.7% respectively, followedleader with a 76.2 and Czech Republic was the Eastern by Australia with 52.4%, Norway with 51.4%, and IndiaEuropean leader with a 74.7. The Latin American with 49.8% (see Figure 8). The lowest positive customercountries surfaced lower on the rankings, with Argentina experience scores came out of Asia-Pacific, with Japanthe leader in that region with a 72.7. and Hong Kong scoring 17.1% and 12.9%, respectively.Figure 8 FIGURE 8 Customerswith a Positive/ Negative Experience by Country (%), 2012 Customers with a Positive/Negative Experience by Country (%), 2012 Global Average Global Average (2.9%) (42.7%) 0.8% Canada 56.2% 1.6% US 55.7% 2.4% Australia 52.4% 3.8% Norway 51.4% 1.4% India 49.8% 3.3% Turkey 47.6% 2.8% South Africa 45.8% 2.1% UK 45.3% 2.1% Germany 45.2% 3.1% Switzerland 44.3% 4.5% Argentina 43.1% 2.0% Czech Republic 42.7% 1.9% Philippines 42.3% 2.9% Poland 41.2% 3.8% Denmark 40.5% 5.8% Portugal 39.0% 4.0% Austria 36.9% 4.9% UAE 36.8% 4.5% Netherlands 35.9% 5.2% Finland 35.8% 3.1% Mexico 35.7% 3.3% Russia 35.6% 8.5% Spain 34.6% 6.5% Vietnam 34.5% 7.0% France 33.8% 4.9% Belgium 33.8% 1.7% Sweden 31.2% 5.7% Brazil 30.1% 3.0% Singapore 28.2% 10.1% Saudi Arabia 26.6% 5.4% Italy 25.3% 7.8% China 25.2% 3.6% Taiwan 23.1% 6.5% Japan 17.1% 4.3% Hong Kong 12.9% Negative Experience Positive Experience Regional Positive Experience LeaderNote: Total may not add up to 100% as the percentage of respondents with neutral answers has not been shownSource: 2012 Retail Banking Voice of the Customer Survey, Capgemini, 2012
16 2012 World Retail Banking ReportRounding out the bottom four countries were China More customers are satisfied, than areat 25.2% and Taiwan at 23.1%. The poor performance having positive experiencesof Japan and Hong Kong may be due to the high As in 2011, general satisfaction levels are much higherexpectations that consumers in these advanced economies than positive customer experience rankings. In everyhave of their banks. These expectations have not been country analyzed, there are significantly more satisfiedfulfilled in recent years by any novel or significant customers than there are customers having a positiveinnovations in service delivery. experience (see Figure 9). In Italy, for example, banks are approaching the global average of 65% in satisfaction, butThe five countries with the biggest gains in positive have a positive customer experience of only about 25%.customer experience compared to 2011 are all European.Banks in the two biggest gainer countries—Norway, with These findings indicate that banks should proceed withan increase of 12.3% and Netherlands, with an increase caution when it comes to measuring customer satisfaction.of 10.9%—have been investing in new channels and Clearly, high customer satisfaction levels are easier tocustomer-focused technologies. Norway’s largest bank, achieve than high levels of positive customer experience.DNB, introduced a new web platform and online bank, Yet it is only through the ability to “wow” customersas well as 24/7 customer service in 2011. In Netherlands, through positive experiences that banks can expect toa critical mass of customers adopted mobile banking in generate high levels of loyalty.2011. In addition, almost all large Dutch banks are nowproviding personal financial management tools to help Banks in a handful of countries significantly improvedcustomers optimize their finances. from 2011 their levels of both general satisfaction and positive customer experience. These include banks fromThe other countries that increased their positive customer Canada, the U.S., and Australia, as well as the Europeanexperience ratings were all in Central Europe and nations of Norway, Germany, and Turkey (see Figureincluded Russia, by 9.8%; Poland, by 7.9%; and Turkey, 10). Banks in other countries, including India, Italy,by 6.9%. As in the case of satisfaction, Russian customers and Switzerland, increased overall satisfaction, but hadmay be responding to general improvements in services virtually no impact on positive customer experience (seebeing offered by state-owned banks. In addition, none of Figure 11). Banks in a few Asia-Pacific markets werethe five European gainers have been severely affected bythe European debt crisis.Figure 9 Positive Customer Satisfactiona vs. Positive Customer Experienceb, by Country, 2012FIGURE 9 Positive Customer Satisfactiona vs. Positive Customer Experienceb, by Country, 2011-2012 90% Percent of Banking Customers with a Positive Satisfaction South Africa Canada India Switzerland US 75% Czech R. Australia Average Positive France Norway Satisfaction (64.5%) Italy Sweden Belgium UK Argentina 60% Portugal Netherlands China Singapore Saudi Arabia 45% Spain Positive Satisfaction = Positive Experience Taiwan 30% Hong Kong Japan 15% Average Positive Customer Experience (42.7%) Regional CEI Leader 0% 0% 15% 30% 45% 60% 75% 90% Percent of Banking Customers with a Positive Customer Experiencea) Positive Customer Satisfaction has been defined as positive or very positive; b) Positive Experience has been defined as positive or very positiveSource: 2012 Retail Banking Voice of the Customer Survey, Capgemini, 2012
chapter 1 17Figure 10 Positive Customer Satisfactiona vs. Positive Customer Experienceb for Select Countries withFIGURE 10 Positive Customer Satisfactiona vs. Positive Customer Experienceb for Select Countries with Improved Customer Satisfaction and Customer Experience by Country, 2011-2012Improved Customer Satisfaction and Customer Experience by Country, 2011-2012 90% Percent of Banking Customers with a Positive Satisfaction 75% Average Positive US Satisfaction Australia Canada Norway Germany 60% Turkey 45% 30% 15% Average Positive Customer Experience 0% 0% 15% 30% 45% 60% 75% 90% Percent of Banking Customers with a Positive Customer Experience 2011 2012a) Positive Customer Satisfaction has been defined as positive or very positive; b) Positive Experience has been defined as positive or very positiveSource: 2012 Retail Banking Voice of the Customer Survey, Capgemini, 2011, 2012Figure 11 Positive Customer Satisfactiona vs. Positive Customer Experienceb for Select Countries withFIGURE 11 Positive Customer Satisfactiona vs. Positive Customer Experienceb for Select Countries Improved Customer Satisfaction, by Country, 2011-2012with Improved Customer Satisfaction, by Country, 2011-2012 90% Percent of Banking Customers with a Positive Satisfaction 75% Average Positive Switzerland Satisfaction UK 60% Italy India 45% 30% 15% Average Positive Customer Experience 0% 0% 15% 30% 45% 60% 75% 90% Percent of Banking Customers with a Positive Customer Experience 2011 2012a) Positive Customer Satisfaction has been defined as positive or very positive; b) Positive Experience has been defined as positive or very positiveSource: 2012 Retail Banking Voice of the Customer Survey, Capgemini, 2011, 2012
18 2012 World Retail Banking ReportFigure 12 Positive Customer Satisfactiona vs. Positive Customer Experienceb for Select Countries withFIGURE 12 Positive Customer Satisfactiona vs. Positive Customer Experienceb for Select Countries Decreased Customer Experience, by Country, 2011-2012with Decreased Customer Experience, by Country, 2011-2012 90% Percent of Banking Customers with a Positive Satisfaction 75% Average Positive Satisfaction Sweden 60% Singapore China 45% 30% Hong Kong 15% Average Positive Customer Experience 0% 0% 15% 30% 45% 60% 75% 90% Percent of Banking Customers with a Positive Customer Experience 2011 2012a) Positive Customer Satisfaction has been defined as positive or very positive; b) Positive Experience has been defined as positive or very positiveSource: 2012 Retail Banking Voice of the Customer Survey, Capgemini, 2011, 2012among the small group that experienced declines in years after becoming a customer. For customers whopositive customer experience along with only small or remain with their bank through the first five years, thenegligible increases in satisfaction (see Figure 12). probability of staying with the bank for a very long time increases exponentially.Positive customer experienceleads to loyalty One aspect of customer perception that appears toThe findings from our surveys of customer trust and have little impact on customer experience is trust andsatisfaction showed that these factors are not effective confidence. We found that customers could have highindicators of the crucial measure of customer loyalty. positive experience without having much trust in theirA much better indicator of customer loyalty is positive banks. In Australia, for example, more than 50% ofcustomer experience. In fact, the likelihood of customers customers report a positive experience, but only aboutto change their primary bank within the next six months 20% of those customers say they trust their banks.increased almost linearly as the customer experience gotpoorer (see Figure 13). Accordingly, as the experience gets Positive experience lacking inmore positive, the customer is less likely to change banks. important channelsThe most loyal customers are those who are enjoying the Channel performance is a key element of the customermost positive customer experiences. experience. That’s because delivery channels are the prisms through which customers gauge theirThese findings point to a prescription for minimizing experiences. The branch and the internet remained thecustomer attrition. Banks should ensure customers most important channels, with roughly 70% to 90% ofare having positive experiences by improving their customers in all regions citing them as so. Yet banks weresatisfaction in the areas that matter most to them. This, not effective in delivering an experience to match thein turn, should lead to increased customer loyalty, which level of importance customers placed on those channels.could also translate to more cross-selling and result in a The percent of customers reporting a positive experiencemore profitable customer relationship. through these channels ranged between only about 40% and 60% (see Figure 14).The greatest effort into improving the customerexperience should occur within the first five years of a Customers were less likely to view the phone andcustomer’s relationship. This will help ensure that over a mobile channels as important, with only 40% to 60%period of time, the bank is able to deepen the customer of customers in all regions indicating as much. Therelationship and make it more profitable by capturing exception is North American customers, of whicha larger share of the customer’s wallet. That’s because nearly 75% ranked the phone as important. Alongpeople are most likely to leave their bank one to four
chapter 1 19Figure 13 FIGURE 13 Customer Experience Index vs. Likelihood to to Change Primary Bank, Global, 2012 Customer Experience Index vs. Likelihood Change Primary Bank, Global, 2012 100 The most loyal customers were found to be the ones 90 who were enjoying the most positive customer experience The likelihood of customers Some customers who are Customer Experience Index to change their primary bank very likely to change their within the next six months banks in the short-term may 79.5 was found to increase almost do so regardless of the 80 linearly as the customer experience, because they experience got poorer may be strongly influenced 74.4 by other factors 70 68.9 69.6 65.9 64.5 64.3 60 0 1 2 3 4 5 6 7 Very Unlikely Not Sure Very Likely Likelihood to Change Primary BankSource: 2012 Retail Banking Voice of the Customer Survey, Capgemini, 2012Figure 14 Positive Experience of Channels vs. Channel Importance by Region, 2012FIGURE 14 Positive Experience of Channels vs. Channel Importance by Region, 2012 100% Percent of Banking Customers with a Positive Experience 80% 60% 40% 20% 0% 0% 20% 40% 60% 80% 100% Percent of Banking Customers Who View Channel As Important Branch Internet Mobile Phone North America (NA) Western Europe (WE) Central Europe (CE) Asia-Pacific (AP)Source: 2012 Retail Banking Voice of the Customer Survey, Capgemini, 2012
20 2012 World Retail Banking Reportwith identifying the phone and mobile channels as less A common finding of customer attitudes toward theimportant, customers also experienced considerably lower different channels is that customers are more interestedlevels of positive experience through these channels. in accomplishing a wide range of everyday banking activities, than in receiving specialized services throughGiven the importance of the branch and internet, banks those channels. In effect, banks must improve theircould benefit by improving the customer experience ability to conveniently fulfill fundamental banking needsthrough these channels. Our Voice of the Customer through all channels, before they make investments insurvey found that, in terms of branch banking, customers more advanced, personalized services.are most interested in having a knowledgeable staff(67%) and low waiting times (65%). Not as important is The mobile channel has high potential for improvingpersonalized branch service (61%) and the ability to open overall levels of positive customer experience. In everyan account in less than 30 minutes (58%). region except North America and Asia-Pacific, mobile had the highest increases in positive customer experienceIn terms of internet banking, customers are looking for compared to 2011. Positive experience in the mobilemore complete services. They most highly value the channel increased by nine percentage points in Centralability to carry out all types of transactions (70%), as Europe, four percentage points in Western Europe, andwell as have a holistic view of account information (68%). five percentage points in Latin America (see FigureThey also want to be able to find answers to all their 15). While positive experience in mobile increased byqueries (64%). Less important is having personalized four percentage points in Asia-Pacific, positive branchservice (58%). experiences in this region increased by slightly more (five percentage points).In ATM banking, basic account management emergedas the most important attribute. Nearly 47% of customers The only region where positive mobile experiencescited as important the ability to manage their accounts by did not increase was in North America. Here, positivebeing able to make payments and transfers. The ability experience levels decreased by two percentage points.to scan and deposit checks through the ATM is valuable North American banks may be having difficulty meetingfor 44% of customers, and finding answers to all banking the high expectation levels of North American customersquestions is important for 42% of customers. Less who are already accustomed to using mobile phones for aimportant is having a customized interface (39%). multitude of purposes.Figure 15 Customers with a Positive Experience by Channel and Region (%), 2011–2012 Branch Internet Phone Mobile 62% 63% 48% 37% North 3% 3% -1% -2% America 59% 60% 49% 39% 49% 56% 34% 35% Central 7% 4% 6% 9% Europe 42% 52% 28% 26% 43% 49% 31% 28% Western 1% 2% 2% 4% Europe 42% 47% 29% 24% 44% 46% 32% 34%Middle East NA NA NA NA & Africa NA NA NA NA 46% 45% 31% 31% Latin 2% 4% 1% 5% America 44% 41% 30% 26% 42% 42% 30% 30% Asia 5% 3% 3% 4% Pacific 37% 39% 27% 26% 2012 % Point Change 2011-2012 2011Source: 2012 Retail Banking Voice of the Customer Survey, Capgemini, 2011, 2012