Banks are under-utilising a vital new source of revenue growth as many have been slow to respond to the digital innovations, according to Ciarán Kelly, financial services partner, PwC, who addressed the Irish Banking Federation Conference this week. This is despite strong digital awareness and usage among bank customers and the fact that they have shown a willingness to pay for these, he said.
Speaking at the conference, Kelly said: “Given the pressures the financial crisis has had on the banking sector, banks have understandably been slow to embrace the digital innovation customers now expect. Social media is changing customer relationships and is an irreversible cultural change. Customers are using alternative payment providers and this is becoming one of the biggest threats to banking in terms of the potential loss of access to customers and market share. Banks need to improve their digital offering fast if they are to hold on to their existing customers and attract the next generation.”
He added that despite customers’ appetite for new and innovative digital banking offerings, and the fact that they are willing to pay for these, the majority of banks still only provide basic mobile and internet banking services.
“There is a real need for banks to embrace digital transactions,” he said. “Banks need to align their business model to take advantage. They need to consider their strategy, their culture and ensure that they have the right skills. Banks need to consider strategic acquisitions or partnerships with digital innovators to secure their long-term position and market share. The banks that provide a differentiated digital experience, with advice and relationship management elements tailored to the individual customer, will secure more profitable relationships with their customers.”