The Accenture study of more than 100 retail executives found that bankers have shifted their focus from cost reduction to growth, with 73% preferring organic growth – generated internally, rather than through mergers and acquisitions.
However, growth expectations may be outrunning reality. Fewer than 10% believe that annual growth in their retail banking market will exceed 15% in the next few years, but more than 20% believe their banks will grow by more than 15% per year.
The study emphasised three significant drivers of organic growth: marketing and product management; distribution; and service and fulfilment.
While a majority believe they need to strengthen brands, 83% believe that designing products for specific customer segments is a key growth driver. Also, 75% in the US and Europe think the branch will remain the most important distribution channel; while 75% believe they must enhance customer service to increase demand.
CAPGEMINI, ING & EFMA REPORT:
WORLD RETAIL BANKING REPORT 2006
Prices for banking services fell 1.5% for active users worldwide in the past year. The average price fell to €76 from €78 the previous year. The findings from this report cover 142 banks in 20 countries, with 41 banks expecting to make a third of sales outside their traditional high street branches by 2010, compared with 6% in 2000. It applies to all products.
Despite regional differences, the report shows significant price reductions in multiple channels and payment methods, including direct debits (-12%), call centres (-20%) and online banking (-23%). The biggest increases were for services such as stop payment services (up 22% for cheques and 16% for debit cards).
Capgemini managing director Bertrand Lavayssiere says: “Some banks are visibly trying to redefine their interactions with customers, directing them towards automated channels for common operations and reserving branches for more advanced services.
“Bankers must rethink and reaffirm their global distribution model around three key points: continue to develop competitive remote sales and services offerings; craft outbound operations with greater precision while leveraging inbound customer contacts; and adapt branches to deliver key ‘account moments’ and enhance relationships.”
