Research commissioned by 10x Banking, founded by Antony Jenkins, former Group CEO of Barclays, reveals a direct correlation between the rate of a bank’s digital transformation and its ability to win and retain customers.
London, UK. 12.06.2023: Global banks are losing one in five (20%) of their customers due to poor customer experience, having overlooked what truly matters, according to new research by 10x Banking.
The landmark study commissioned by 10x, the transformational cloud-native SaaS core bank operating system founded by former Barclays CEO Antony Jenkins, revealed that banks in key markets across the globe are shedding large numbers of their customer base to rivals. One in eight banking leaders (12%) state they have lost 30-40 per cent of their existing customers for this very reason.
Surveying more than 150 senior decision-makers and more than 150 product managers, business analysts and project managers, across eight markets (UK, South Africa, the Nordics, Australia, New Zealand Germany, India and Vietnam), 10x’s study sought to understand the decision-making process within the world’s leading banks when it comes to digital transformation, specifically their ability to adopt new technologies, respond to market change, roll out new products, and prioritise resource appropriately.
Commenting on the findings, Jenkins said: “Over my career I have learnt banking is about customers, but the reality is most of the banking industry has overlooked what matters, taking a product-focused approach rather than focusing on the customer. Banks need to think about solving problems in a way that makes customers’ lives easier. This is a good thing for the bank and the customer, who will be more loyal over time as a result.
“Banks often mistake transformation for innovation. Innovation is a linear series of marginal improvements, whereas true transformation is a non-linear step-change in improvements, beginning with a material improvement in customer experience. Many banks might convince themselves that releasing an app or going digital means they have been on a journey of transformation, but the reality is that very few banks are undergoing true change at their core.
Banks are museums of technology, with every generation of software and hardware, much of it now off support and towards end of life. Prioritising digital transformation is critical if they want to stay relevant and compete effectively.”
Not only do senior decision-makers within banks recognise they are losing valuable customers, but an alarming two-thirds (64%) admit that their slow rate of digital transformation has directly resulted in them missing out on winning new customers.
This direct impact on banks’ bottom lines, coupled with the current economic uncertainty within the banking sector, has resulted in three quarters of banks (74%) attempting to accelerate their digital transformation this year, which offers some encouragement that decision-makers are seeking to address the issue.
“The findings from our study reflect exactly what we are hearing in conversations with customers and prospects,” added Dr Leda Glyptis, Chief Client Officer at 10x. “While innovation is flourishing, true transformation is hard to come by, and the customers of some of the world’s leading banks are becoming frustrated.
“There are many human and structural obstacles to digital transformation. To overcome these, bank leaders need to embrace a fresh mentality to bring about the changes in banking and financial services that consumers increasingly demand.”
This research is part of 10x’s latest industry report, Global banks and their digital transformation challenges: perception or reality?