Banking terms pdf 2016

Banks can reap a significant payoff by accelerating the migration of customers from high-cost branches and contact centers to self-service mobile and online. We are known for banking terms pdf 2016 holistic perspective. We cross boundaries with our clients to create value.

Delight customers, and costs will drop out. It might sound counterintuitive, but this approach can change the trajectory of profits for large, traditional retail banks that have been frustrated by the slow pace of taking out costs. 4 billion annual opportunity for the 25 largest US banks. That’s because mobile interactions are far more likely to delight customers than interactions at branches or through contact centers. Dutch banks began to reconfigure their branch networks a decade ago, as the country’s strong broadband infrastructure and shift to cashless commerce enabled consumers to adopt mobile banking early on. Is the Bank Branch Dead? The payoff is not only customer loyalty, but reduced costs as well.

4 cost of a teller or call-agent interaction. As interactions migrate to mobile, a bank needs fewer tellers and call-center agents. Loyalty thus points the way to profitable growth. Of course, earning loyalty is not easy. The locus of loyalty has shifted in recent years from friendly service at the branch to other attributes, especially simplicity and convenience. And those features depend largely on creating strong digital channels, then teaching customers how to use them.

This constitutes a sea change for banks, particularly for midsize or smaller regional banks that have relied on local knowledge and branch service to attract and keep customers. Top loyalty scores for an excellent branch experience miss the main point: Mobile channels have become the new way for busy consumers to do their banking. Banks that expect people to travel to the branch or wait in the queue for a phone agent for routine transactions are wasting people’s time. Senior managers who understand this shift have a massive opportunity within their grasp, if they can wrangle their organizations to harness the mobile revolution.

They would earn greater customer loyalty by developing simple, digital channels that customers embrace. As more customers adopt digital, the level of routine or avoidable transactions in high-cost branches and call centers will go down. Subsequent staff reductions and reassignments to higher-value activities will lower variable costs. Banks can then close branches and increase digital sales, which expands profitability.

Realizing the fruits of the mobile revolution will require new management techniques. Most banks will have to become more aggressive and thoughtful about guiding customers to mobile self-service. Banks also must improve their mobile apps to make them truly easy and convenient. Bain’s new global survey of 137,034 consumers in 21 countries suggests where banks should focus their efforts, and practical ways to sequence that process. Why do customers keep visiting tellers and calling the contact center?

Globally, direct banks continue to lead in Net Promoter Scores in most countries. These branchless institutions generally offer simpler product lines and streamlined operations, which appeal to many consumers who get overwhelmed by too much choice. Tangerine Bank, the loyalty leader in Canada, offers just one type of checking account online, compared with four to six at the major traditional banks. Some of the largest global and regional banks have borrowed a page from the playbook of direct banks, as they simplified products and improved their digital operations. In the UK market, for example, Santander has steadily improved its relative Net Promoter Score over the past five years. That simple proposition made it much easier for new customers to buy products and for bank agents to sell them. Critically, Santander migrated its entire back book of existing customers to the new system, even though the higher rates compressed its margins.

The bank recently reduced its interest rates, as the runaway success of 123, combined with record-low central bank rates, have made the program prohibitively costly to run in light of the new Brexit circumstances. Santander also accelerated the development of its digital channels ahead of some other traditional banks, so that a customer now can refinance a mortgage online. Smaller national or regional banks, by contrast, are getting squeezed in the middle. Many of them remain rooted in their branch experience and have not pushed as hard to build out their digital presence. Their past loyalty advantage that centered on the branch experience has waned.

For the first time in our annual survey, mobile growth has moderated, and in some countries appeared to be approaching the top of the classic S curve for technology diffusion. Transactions on smartphones and tablets, however, did continue to displace those on desktop and laptop computers, with nearly all countries now showing more mobile than online transactions. Mobile adoption has been highest among the youngest consumers, but there is still ample room for growth among those in their 50s and older. Too often, this group has been overlooked by banks, which typically neglect to give older consumers guidance or even much information about the benefits of using mobile apps. Despite the rise of mobile, high levels of routine transactions persist at branches and call centers.