Bangkok--3 Mar--PwC Thailand
Asia-Pacific banks lead the world in digital strategies for broadening their customer reach and improving customer satisfaction, a PwC report says
Banks must make it easier for customers to use their services across all platforms to stay competitive and better connect with customers in the digital age, PwC says.
The banking sector must work with consumers, stakeholders, and companies to develop more personalised banking products and services, according to PwC’s Global Digital Banking Survey.
The PwC study, which polled 157 senior IT banking executives across 14 worldwide primary markets, said that using an omni-channel approach — allowing customers to seamlessly interact with banks across all channels regardless of transaction type – would help banks reap the benefits of increased transactions and potentially greater customer satisfaction.
Vilaiporn Taweelappontong, a Partner at PwC Consulting (Thailand), said that consumers around the world are moving online, including in Thailand. This is prompting banks to rethink digital processes and do more than simply offering only traditional services at brick-and-mortar branches.
“The challenge for banks today is to fully embrace a digital strategy and incorporate it into their corporate strategies,” Vilaiporn said.
“With customers wanting to conduct transactions digitally on various devices, banks need to raise their game to compete, retain customers, and make long-term profits.”
The report, which provides insights on where banks stand today, showed that 30% of respondents globally see advancing customer experience as the most important digital strategy for banks over the next two years, second only to expanding market share at 41%.
In the US, online and mobile bill payments are expected to make up about 55% of all bills paid in 2016, the report said. Additional PwC research also shows that consumers are willing to pay a premium for mobile banking services.
Bank branches dead?
More customers use digital outlets for basic transactions, reserving branch visits for complicated transactions and solving problems, Vilaiporn said, citing the report.
A continued drop in branch activity is expected through to 2016, as more transactions become digital, including online, mobile and social media.
The PwC report shows that respondents expect a 25% decline in customers using branches and a 13% decrease in phone banking. On the other hand, online, mobile, and social media transactions will continue to strengthen, with mobile growth reaching 64% over the next few years.
“The role of the branch is clearly changing,” Vilaiporn said. “Customers are increasingly making simple transactions online either from their mobile devices and computers, instead of going to the bank or making calls.”
Vilaiporn said that most banks offer products and services to their customers through a variety of channels -- either online, at a physical bank, or through a call centre. However, these channels often lack consistency or aren’t sufficiently coordinated.
“To better gain a competitive edge, they need to begin moving to omni-channel banking, where customers will have a smooth and consistent experience whether accessing their bank via a mobile phone, tablet or in person at a branch.
“If the banks don’t step up to provide this omni-channel experience, they could risk losing customers to non-bank entrants including telcos, retailers, and technology companies.”
Asia-Pacific banks leading the way
Asia-Pacific banks lead the world in digital strategies for broadening their customer reach and improving customer satisfaction, the findings showed.
Unlike European and US banks, Asia-Pacific banks have a more mature digital strategy that aligns with their corporate strategies. Digital strategies are routinely included in board agendas, and employees in the region possess a higher degree of expert-related skills, from IT staff to executives and senior management.
“Despite slowing growth in China, Asia-Pacific banks still enjoy growing businesses and have the ability to fund their digital capabilities more than their global counterparts thanks to strong loan growth, relatively high reserves, and low debt levels,” Vilaiporn said.
Looking at Thailand, Vilaiporn said digital banking prospects would continue to expand, aided by a proliferation of internet usage and government support to push the nation towards a digital economy.
“Digital technology is expected to play an even more crucial role in transforming Thailand in the coming years, underpinned by the government’s digital economy policy.
“Improved connectivity, increased productivity, and lower costs will likely contribute to the country’s overall economic growth. To achieve this goal, however, the government and private sector must work together to build an effective infrastructure, boost confidence in online transactions, beef up cybersecurity measures, and expand internet access.”
Internet banking in Thailand is on the rise, with 8.9 million accounts in September 2014, according to Bank of Thailand data. This is up from eight million at the end of 2013. Mobile banking is also growing, with 3.7 million accounts in September 2014 compared with only 1.2 million at the end of 2013.
Most banks in Thailand are increasingly responding to this trend, reflected in a flow of investments in digital infrastructure, channels, operations and product design, Vilaiporn said.
“Although banks are making headway in developing digital strategies, what’s more challenging is securing long-term success.
“To stay one step ahead of rivals, banks need to always be agile with innovative changes to serve fast-changing customer behaviours. More importantly, they need to assess threats and vulnerability regularly to ensure maximum security.”