Capgemini has again warned Australian banks of the need to put the customer first, with traditional bank alternatives ready to scoop up unhappy punters.
In the World Retail Banking Report 2018, Capgemini says that competition is no longer just coming from financial services startups, rather the big end of tech town is also making its presence known.
"Australian banks are interested in collaborating with fintechs and bigtechs to make this happen, with 58 percent of banks beginning to think of their business as a platform. The bank of the future will look nothing like the bank of the past," Capgemini Australia and New Zealand Head of Financial Services Philip Gomm said.
According to Capgemini, 32.3 percent of customers would consider turning to large technology firms for financial products and services, especially as younger, more tech-savvy customers are looking for options that suit them most.
Loyalty to a bank is also less important to consumers.
The financial services sector in Australia is largely dominated by four major banks, which combined have significant pricing power and higher than average returns on equity and large market shares; they also hold a 95 percent share of the entire Australian finance industry.
The report says that barely half of customers have positive banking experiences across all channels -- 51.1 percent in branch, 46.9 percent on mobile, and 51.7 percent on internet banking -- despite continued technology investment by the likes of the big four attempting to making these channels better.
The report says at length that banks must respond to soaring customer expectations and offer more personalised services, noting 49.1 percent of customers were more satisfied with their bank where they had been offered personalised digital experiences proactively than those who had not.
Gomm said that one area of focus this year was around Australian customers' likelihood of purchasing non-banking services from their bank.
"These once far-fetched ideas are now in experimentation," he said.
"For example, the bank is one of the first places you let know you are travelling, we increasingly rely on our cards working overseas. So once consent is provided, why can't they broker additional products and services based on your data? We acknowledge this is early days, but we might not be that far off from this."
The report comes in the wake of the Banking Royal Commission that found the Commonwealth Bank of Australia (CBA), Westpac, the National Australia Bank, ANZ bank, and AMP, had taken more than AU$220 million from clients for services they never intended to provide.
CBA's executive GM of IT Delivery and Availability Nick Giles previously said that although the words "digital transformation" and "disruption" get overused, they are very important in the digital space that Australian financial institutions now find themselves in.
While the industry has focused on the smaller, more "agile" players emerging as fintech firms, Giles is equally as concerned with the threat the larger players pose.
"The digital gorillas -- Amazon and Google -- who perhaps haven't put their foot into the ring in a large way just yet, but we recognise that they can make that choice and they have very deep pockets," he said. "From our perspective, it's about how do we continue to be as relevant for our customers."
- CBA preparing for 'digital gorillas' to join fintechs as competitors
- CUA partnering with startups to bring AI to members
- ANZ kicks off smartphone and wearable-based cash withdrawals at ATMs
- Citi Australia's Silicon Valley approach to out-banking the big four
- Capgemini: Banks must embrace 'open banking' evolution or risk disintermediation
- Why Westpac is making 'frenemies' with fintechs (TechRepublic)