You may know this piece by Gil Scott-Heron The revolution will not be televised. Big changes often go unnoticed at first. And this would certainly be the case if customers were to leave traditional banks en masse for new players. They wouldn’t do it all at once and you wouldn’t notice right away. You wouldn’t see it live on TV. However, this is what we are certainly experiencing!
It is true that for the moment, and despite the expectations of many observers, we have not seen customers of traditional banks abandon the latter en masse by transferring their main account to an online bank, a neobank or another. Movements of this type continue to be marginal and in reality do not tend, although the crisis has led one to believe, to accelerate. However, that’s not how things are going either.
At the beginning of 2021, a study by Bain & Company, carried out among 56,000 people in fifteen countries, launched a first alert by underlining the massive nature of “hidden defection” by bank customers. The study indicates that up to half of the new financial products acquired are now purchased in a different establishment than the one that has the main account. The UK has the highest share (51% of new product purchases). They are followed by Singapore and Germany (40%). They are immediately followed by the United States (38%), Canada and France. In each of the countries considered (except apparently Italy), the percentage exceeds 25% of new purchases.
nomadic clients
According to the study, this phenomenon occurs mainly through digital channels and the new products acquired in this way are, in the United States, for example, credits (54% are contracted with a different establishment than the one with the main account) and credit cards (50%), while deposits are much less affected (22%).
In short, a true banking redistribution seems to be underway, but it corresponds to a nomadism of customers, considerably expanding their options and therefore their suppliers, without breaking with their usual establishment. This does not exactly correspond to multi-banking because it is not about having several different banks, although ultimately comparable. It’s all about getting supplies from different sources of financial products and services, even from players who have nothing to do with banks.
A survey carried out by Ipsos for Sopra Steria (“The Observatory of the digital maturity of banks”) in fourteen countries in August 2022 describes the phenomenon very well. While nearly 3 in 4 French people remain exclusive customers of a traditional bank (72% compared to just 54% in the US), close to 1 in 4 French customers say they are a customer of a traditional bank and an online bank (23%), while the exclusive customers of online banks are very minority (5% in France compared to 8% in the United States). And, in France, one in four customers also say they could open an account with players like Amazon, Uber, Apple or Microsoft if they offered attractive financial products (almost one in three customers across all European countries in the survey).
If we read it correctly, this research is decisive! It clearly says that the traditional banks are losing, perhaps have already lost, the monopoly of the relationship with the client in financial matters. This counts for much more than the figures for opening accounts and changing establishments.
end of a monopoly
Traditionally, the French first contact their bank through their branch advisor (57%), but this channel now competes directly with their store website (54%) and mobile app (41%). On average in Europe, the use of digital has even become the first channel of contact with the bank itself (54% for the web and 53% for the mobile app) and the use of an advisor is much lower (only the 46%). Overall, using an advisor to sign up for certain services is no longer desired by more than 6 out of 10 customers. In fact, only 60% of French customers would still absolutely need to speak to an adviser to sign up for a service. . In Germany, the need to use an advisor only affects one in two clients (52%) and is now in the minority in Great Britain (only 40%). In the United States, only one in two customers say they absolutely need an advisor to sign up for a service (52%).
At important moments in their lives (installation, project financing, acquisition, retirement, etc.), only a small minority of French people say that their bank contacts them to offer them the right services. Less than one in six French customers who have been in contact with their bank believe that their bank has offered them really interesting products during the most important moments of their lives. Banks’ digital tools do not generate greater satisfaction on the part of customers, whether in the follow-up of their requests, the quality of the solutions offered or the speed with which they are attended. Finally, only one in four customers who have been in contact with their bank believe that they have “really” been treated as important (24% of all customers, only 30% in Europe).
All this does not mean a rapid disappearance of the traditional banks, nor the irresistible and imminent rise to power of one or more new players. But that means the market has completely changed. Banks no longer have a monopoly there. They only count as suppliers among others in a market whose offers have become very diversified; as well as relays of information and advice for customers.
In such a context, neither the reproduction in digital format of their old offers, nor the strengthening of their traditional advisory function will be enough, although they continue to concentrate the bulk of the transformation efforts of traditional banks. Nothing is decided, but the revolution is underway and will accelerate.
Source: BFM TV
