Banks have encouraged consumers to engage with them through digital channels. Migrating low-value and process-driven interactions to digital channels while retaining high value and more complex client activity in branches meant they saved costs while protecting personal relationships with customers. This has led to a gradual 3-4% shrinking of branch networks in much of the developed world, although in some markets closures have been more extensive. Although banks had some success, customer adoption of digital channels was slow for all but the most basic banking activities. Certain customer segments still visited their branches for things they could easily do online and even the most tech-savvy customers still liked the comfort of opening new accounts, resolving issues, or receiving advice about complex products face to face.
As much as 50% of consumers now interact with their banks through mobile apps or websites at least once a week; 2 years ago, this was just 32%. The volume of in-branch transactions in the US has decreased by 30-40%. Digital engagement across all consumers is significantly higher than at pre-pandemic levels. Digital migration also accelerates commoditization and jeopardizes trust for banks that sudden upswing in digital engagement could be both a blessing and a curse.
PERSONALIZATION
Customers value price competitiveness while dealing with their banks, and insurance customers have ranked value for money in the first place. Some 2 years ago, value for money was only in 5th place. And although primary bank account switching activity is low, those who have switched in the past 12 months are most likely to say that a better price or value was their main reason for doing it. For the people who have not switched, price and value are the main factors that might cause them to do so in the next 12 months.
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