With banks facing increased competition from tech firms, our latest Customer Loyalty in Retail Banking Report examines how the banks can focus on what customers value most.
November 14, 2018
26 min readIt’s no secret that banks are under attack from many quarters. Insurgents have been attacking the weak points—picking off individual aspects of the banking experience and delivering better value propositions. In payments, for instance, nonbank providers have become strong and even dominant in many countries, including Brazil, Hong Kong, Germany and India. Unless banks sharply improve the convenience and quality of the experience, insurgent competitors will continue to gain converts and win new customers.To be sure, earning customer loyalty is harder than ever, as powerful trends benefit the insurgents. Regulators have been granting nonbank companies access to existing payment networks, which has spurred rapid growth of providers such as KakaoPay in South Korea. Open data rules, launched in the UK, give challengers such as Monzo and Mint access to core customer data they can use to expand, and will spread to other countries. Combined with looser licensing restrictions, open data has spawned about 20 new banks in the UK over the past few years, the most since the late 19th century.