Bain: China’s Retail Banking Industry Customer Experience Transformation Is Now Time
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Bain & Company released the “China Digital Retail Banking Report (2023)” on February 1, which shows that in recent years, the digital retail banking business in the Mainland and Hong Kong, especially the mobile banking business, has developed rapidly, and retail banks must build an omni-channel business strategy. Focus on experience to stay competitive and win customers.
This study conducted surveys on 1,800 mainland retail banking customers and 1,400 Hong Kong retail banking customers. The results show that in the past year, respondents of different ages and asset levels all indicated that mobile banking and online banking were the most frequently used channels. In Mainland China, the average number of times respondents use mobile banking apps is about 15 times per quarter, five times higher than the number of times they visit offline outlets. In Hong Kong, the penetration rate of mobile banking is close to 80%.
Liang Guoquan, global partner of Bain & Company, said, “China’s retail banking customers are changing the way they use banking services. With superior customer experience, digital channels have won their favor. This means that mobile banking and online banking are no longer secondary channels. Or value-added services, but has become the first choice of more and more customers.”
Mobile banking experience has the greatest impact on the overall customer experience of retail banking, surpassing online banking and traditional channels. Mainland customers value the functions of mobile apps the most—in addition to convenience, they hope that mobile banking will have more functions, better benefits and more life services. Hong Kong retail banking customers pay more attention to the fluency of mobile apps, the transparency of terms and the protection of privacy.
In Hong Kong, the digitization of payment and consumer financial products is faster than wealth management and insurance products, but many customers are ready to embrace digital wealth management and insurance products. In this survey, interviewed customers who purchased mutual funds and insurance products from banks said that 45% of mutual funds and 40% of life insurance policies (calculated by amount) were purchased through bank mobile apps.
At present, compared with traditional channels, financial technology platforms give priority to digital experience or provide pure digital experience, so they are more intuitive, concise and more inclusive. In addition, financial technology has broadened the financial service market, and many institutions provide a series of investment services such as robo-advisory services through digital wealth management platforms.
“Financial institutions use digital capabilities to reach more customers and provide them with high-quality services. Traditional banks must optimize their digital capabilities while providing a convenient digital experience.” said Cui Yun, global partner of Bain & Company.
Echoing the vigorous development of financial technology in the mainland is the rapid rise of virtual banks in Hong Kong: virtual banks put customer experience at the core, thereby creating a more unique and attractive value proposition. Compared with some traditional banks, virtual banks have faster loan approval, lower loan interest rates, more flexible repayment terms, and easier-to-use consumer financial product platforms.
A good human service experience is an excellent opportunity for banks to convert customers into recommenders, because human services often involve complex or important scenarios that can affect customer emotions, especially in mortgage loans, wealth management and large-value transfers, customers prefer Get human support. In this regard, Bain suggested that banks need to improve their omni-channel capabilities to provide a more consistent high-quality customer experience, including helping customers seamlessly switch between online and offline. To enhance omnichannel engagement, banks can also include or embed digital experiences in offline branches.
Traditional banks maintain a long-term cooperative relationship with customers and know the customer situation in detail. However, in the process of “customer-centric” transformation, they often face challenges in many aspects such as organization, system and capability. Bain suggested that banks can follow the three development stages of continuous improvement of customer experience: first, establish customer insight and segmentation capabilities; second, create seamless customer experience; finally, optimize human-machine collaboration and create personalized interaction.
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