Banks must invest in customer service or lose out to non-bank competitors, says report by The Economist Intelligence Unit

London - 13 March 2014

• New report finds top priority for digital investment is to attract new customers (31%) 
• Customer retention and customer insights are the lowest priorities for digital investments (8% and 11% respectively) 
• Banks lack the systems and skills to join digital knowledge with customer service 
• Retail banks face competition from non-financial companies with expertise in customer service 

A new report finds that retail banks risk losing out to non-financial competitors if they fail to adapt to new customer service digital strategies.

Future factors: How regulation, client expectations and technology are transforming retail banking, sponsored by Temenos, finds that attracting new customers is the priority for digital investment (31%). Retaining customers is the lowest priority (8%), just lower than gaining customer insights (11%).

Further to this lack of investment, the report finds that banks lack the systems and skills to analyse data and act on them. Pierre Janin, the chief executive of AXA Banque, interviewed for the report said: “We do not have enough digital natives and people to cope with customer needs and understand the statistics”.

With start-up banks rare, competition is likely to come from non-financial companies. This includes retailers and telecommunications firms, which have more developed digital customer service strategies.

Monica Woodley, the editor of the report, said: "If you fail to look after your customers, it’s not long until your business will fail. Retail companies know this better than most and could take advantage if retail banks falter. It's clear banking has fallen behind in the digital age, but now it needs to catch up."

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