Digital Channels III Internet and Financial Services in Europe
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REPORT Digital Channels III Internet and financial services in Europe In collaboration with: CONTENTS INTRODUCTION 03 | Foreword 04 | Methodology and acknowledgements 05 | Executive summary 06 | The banking and digital landscape remains mixed FIXED AND MOBILE INTERNET 09 | Fixed and mobile internet: explosive usage growth 09 | Fixed internet banking at the stage of maturity 09 | Mobile internet: increased use among the European panel 12 | Improved customer satisfaction CUSTOMER JOURNEYS ARE MORE DIGITAL 14 | Customers journeys are more digital, but with an increasingly strong bank presence 14 | Digital channels are used frequently, but for transactions which remain straightforward 15 | A pre-sales process boosted by commercial proactivity 17 | Online purchases are already part of the landscape 18 | Customers are frequently contacted, but offers aren’t always relevant NEW BANKING PLAYERS 20 | New banking players: still very limited awareness and use of services 20 | GAFA & neo-banks: still little enthusiasm despite their emergence at European level 20 | New uses with which internet users are still not familiar 22 | Social networks CONCLUSION 23 | What lessons can be drawn by banks? INTERVIEWS 24 | Antoine Pichot, Co-Head of Strategy, Digital and Customer Relations, Société Générale 28 | Marco Bragadin, CEO, ING Italy 31 | Katarzyna Prus-Malinowska, Digital Banking Director, Bank Zachodni WBK 34 | Nazim Erdogan, Head of Digital Banking, TEB 37 | Luca Vanetti, Digital & Omnichannel Banking, Banco BPM SpA 2 Digital Channels III: internet and financial services in Europe Foreword The “Digital Channel” survey, carried out in collaboration with Efma, provides an overview of the main trends as regards the use of digital banking channels. An eighth country, namely Spain, has been added to the survey, which now covers a broad spectrum of diverse banking relationship models: France, Germany, Italy, the Netherlands, Poland, Spain, Turkey and the United Kingdom. The first two editions, published in 2011 and 2013, had highlighted the strong growth in the use of digital channels in the banking relationship. • How do customers connect to their banks today? Which channels do they use? How often? • What is the role of digital channels in the banking relationship? What do customers do when they log on remotely? • How are digital channels used to purchase financial products? What types of products are purchased via these channels? • How are social networks integrated into digital strategies? How are they perceived by customers? In 2017, for the third edition, new topical issues facing European banks are addressed. • What is the role of digital relationship marketing and how is this integrated into the customer digital journey? What is the most appropriate level of customer autonomy in after-sales management? • How far have innovative services been appropriated (means of payment, Fintech platforms, etc.)? • How are online banks and new entrants perceived? This survey, based on the answers of more than 4,000 respondents and interviews with senior banking executives, reveals significant differences in utilisation rates, usage, satisfaction and expectations among internet users vis-à-vis their bank. Several topics which are currently major marketing and commercial issues for banks are addressed in this report. We hope that the findings of this survey will shed light on the expectations of your customers and help you anticipate the impact of the quickening pace of digital development. Vincent Bastid Philippe Derambure CEO, Efma President – Founding Partner Exton Consulting 3 INTRODUCTION Methodology The conclusions of this survey are based on an online survey conducted in November 2016 involving 4,000 respondents (500 in each of the eight countries) aged between 18 and 74. Definitions: • The “8-countries average” corresponds to the unweighted average of the eight countries surveyed. • The term “internet users” refers to the whole of the population having internet access, that is to say the population covered by the survey. • The term “mobile internet users” refers to the whole of the population having a mobile phone and/or internet-enabled tablet. Technical note: • As the figures represent a population of internet users, the structure of the samples is not systematically representative of the country’s population as a whole. • The data therefore reflect the trends of a population of internet users. Acknowledgements We wish to thank the following contributors in particular for their testimonies: Antoine Pichot, Co-Head of Strategy, Digital and Customer Relations, Société Générale Marco Bragadin, CEO, ING Italy Katarzyna Prus-Malinowska, Digital Banking Director, Bank Zachodni WBK Nazim Erdogan, Head of Digital Banking, TEB Luca Vanetti, Head of Digital & Omnichannel banking, Banco BPM And the following Exton Consulting authors: Philippe Vervloedt, Partner Martin Tixier, Partner Jocelyne Amegan, Principal Anne-Séverine Calandreau, Manager 4 Digital Channels III: internet and financial services in Europe Executive summary Increasingly digital customer journeys, but with banks increasingly present France, Germany, Italy, the Netherlands, Poland, Turkey, the United Kingdom and Spain: digital channels are popular in each of these countries. Branches continue to feel the effects of the digitalisation of banking practices, with branch networks having shrunk by 7% on average between 2012 and 2016 in the eight countries surveyed by Exton consulting*, except for Poland and Turkey where the density of branch networks has increased. However, this shrinking of brick-and-mortar networks has not been accompanied by a decrease in the accessibility of personal relationship managers, since the current rate of 39% is two percentage points higher than in 2012. France is almost an exception with 89% of internet users declaring that they have access to a personal banking advisor at their main bank. The use of internet banking continues to increase: 87% of internet users log on at least once a quarter and 28% are “heavy” users who log on daily. Mobile banking has recorded exponential growth. The change in the number of connected smartphone and tablet owners has a huge and direct impact on the use of mobile internet banking: the number of users has doubled, they log on between 2 and 3 times a week, and more than half of them have downloaded their bank’s app (x2 vs. 2012). Lastly, satisfaction with mobile banking has now bridged the gap with fixed internet banking with an NPS (net promoter score) up by 30 percentage points. Once they have logged on, users mainly carry out simple everyday banking transactions. In this regards, the types of internet and mobile banking uses are very similar. Nevertheless, the proportion of complex, participatory transactions has increased by around 10 percentage points, driven by the under-40 age group. Upstream of transactions, 66% of internet users prefer to search online for information on a financial product. When it comes to purchasing products, 37% prefer to purchase simple products online. Nevertheless, there are still significant cleavages: in France, where the relationship model is based on access to a banking advisor, only 21% of internet users say that they have purchased a financial product online, compared with more than 30% in the United Kingdom and Turkey. So, how can banks move things forward? First of all, the customer journey must reflect a rapid, simple, practical experience… with customer support along the way: • Half of internet users appreciate being recontacted following an internet search, preferably by email (49%) or by telephone (37%) • and 43% want to have the support of a banking advisor when finalising their purchase. Upstream, these journeys need to be better promoted and more closely targeted: more than 50% of respondents said that receiving promotional offers or personalised pre-selected offers would encourage them to purchase products… moreover, one-third of respondents consider that the offers received from their bank are unfortunately not relevant. At this time, more than a quarter of internet users would be willing to open an account with a new digital entrant (Google, Amazon, Facebook, Apple) and are prepared to test new Fintech offerings. Respondents in France and the Netherlands are the most cautious: only 21% and 11% of internet users would be willing to open a bank account with these digital players. This playing field could enable Fintechs and neo-banks to increase their market share in some specialised products and services. On 5 the other hand, there is still a significant image problem: two-thirds of internet users have not heard of crowdfunding platforms, only 10% of them use an account aggregation service and fewer than 5% of them use an investment platform. What lessons can banks learn from this? First of all, the need to treat mobile banking as a preferred relationship channel. Beyond the established success of banking apps, banks need to enhance their mobile offering: videoconferencing, chat advisors, customisable alerts and notifications, etc. Next, improving the actual experience by redesigning the customer journey, across all channels, in order, for example, to natively integrate compliance, share dematerialised documents and propose remote support (tutorials, dynamic FAQ, chatbot, etc). Lastly, new player offerings enable internet users to buy and construct their financial services according to the best offers (price, service, technical features, etc.). The challenge facing banks is