Warc, 12 August 2013
SINGAPORE: Financial services brands in Asia need to adjust
their strategies as levels of customer loyalty decline and digital engagement
grows, a study by McKinsey has suggested.
The consultancy reported that retail banking revenues in the
region are set to hit $932bn in 2020, having grown by an average of 9% per year
since 2010.
Emerging markets in Asia will deliver 63% of revenues by the
end of this decade, compared with 41% at the start, suggesting significant
opportunities for banks operating in these nations.
But McKinsey warned that the sector would come under
pressure from tighter regulation, slowing growth and increasing customer
sophistication, meaning loyalty should diminish.
Over 80% of banking customers already use multiple channels,
coming in at an average of six touchpoints per person - ranging from ATMs, call
centres, direct mail and branches to online, mobile and traditional media.
Similarly, a 60% majority of account holders believe in
shopping around to find better deals, indicating a greater willingness to
switch financial services providers.
"In retail banking, as in other retail sectors,
'research online, buy offline' is the watchword that characterizes more and
more consumer behaviour," McKinsey said.
Such changes are set to gain pace, given that 65% of mobile
phone users in China go online via their devices, and mobile-only web users are
due to make up 55% of India's digital userbase by 2015.
In a further sign of this shift, average monthly usage of
mobile and internet banking tools by customers has increased by 36% in
developed Asia and by 39% in emerging Asia in the recent past.
By contrast, branch visits declined by 28% on average across
these two groups.
Customers also use up to five channels to research products
and 1.8 to manage existing ones. But over 60% respondents in emerging Asia
would prefer to consolidate with one bank - provided their service was
seamless.
Data sourced from McKinsey; additional content by Warc staff
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