Banks can ride a wave of digital transformation to deliver better services and improve customer relationships. Those are some of the key findings of new research by BT and Avaya. 

The research, Youbiquity Finance, is based on a survey of 3,000 consumers in Germany, Spain and the UK and builds on previous studies published in 2012 and 2014. It finds that consumers’ growing use of technology for financial products and services is coinciding with a warming of their relationships with their banks and insurance companies. 

Thirty-five per cent of UK consumers now say that they have a strong relationship with their bank, up from 29 per cent in 2014. In Germany, the figure stands at 59 per cent, while in Spain it’s 40 per cent.  

The improving relationship between banks and their customers is also evident in the number of people who say that their bank puts customers at the heart of their business. In the UK, this figure grew from 19 per cent in 2014 to 33 per cent in 2016.  In Germany and Spain the figures for 2016 are 50 per cent and 34 per cent respectively.

In the same period, consumers’ use of technology for financial services has become widespread. The research finds that 46 per cent of UK consumers now use a PC or MAC once a week or more to check balances, while 27 per cent of those surveyed use a smartphone banking app. This is similar to numbers in Germany at 51 per cent and 17 per cent respectively and in Spain at 54 per cent and 35 per cent respectively.

This familiarity with technology is giving people the confidence to try more complex banking interactions digitally. Twenty nine per cent of all respondents say that they have applied for mortgages online, versus 17 per cent in 2014. And in the same period, the number of UK consumers applying online for current accounts rose to 31 per cent from 25 per cent, while in Spain the number grew from 19 per cent to 22 per cent.

Similar confidence can be seen in the use of digital technology for complex insurance enquiries with 37 per cent of people saying that they’ve tried to make an insurance policy change online. Twenty eight per cent of those making a car or a home insurance claim now turn to online channels first and 42 per cent of those reviewing their personal pension start online too.

Paradoxically, financial services firms should be most mindful of the need to retain person-to-person support for younger customers. Despite being the most adept age group in their use of digital technology, the research finds that only 47 per cent of 16-24 year-olds say that they are confident in making their own financial decisions, versus 66 per cent of people aged 55 years or more. 

Video chat may help.  Fifty-five per cent of all consumers surveyed agree that having conversations with advisors by video conference would help them better understand the information being given. This rises to 63 per cent of 16-24 year olds. Overall, 62 per cent of people said that video chat could help improve trust compared with 70 per cent of 16-24 year olds.

The increasing appetite for new channels, such as video, has not been at the cost of more traditional digital contact methods. The proportion of consumers who would choose email to get help from their financial service provider rose between 2014 and 2016. Web-chat has become more popular too, with demand from consumers up by more than 100 per cent across Germany, Spain and the UK since 2012 (24 per cent in 2012 to 62 per cent in 2016).

Despite the clear benefits that technology offers their customers, financial services firms need to be aware of growing challenges presented by the digital consumer. Two in three people surveyed expect web chat conversations to start right away and three in four people want their phone calls answered within 30 seconds.  For email, people want a response within three hours.  And 57 per cent of people say that they expect a full response within three hours to a tweet or Facebook post.  

Ashish Gupta, president, UK and global banking & financial markets, BT’s Global Services division, says: “Youbiquity Finance clearly shows the possibilities of digital technology in transforming customer relationships. With 24-7 access to online and automated services, and companies now offering person-to-person engagement via video, phone or web chat, it’s easy to see why trust in financial services firms is beginning to grow again.  At BT, we see call this ‘digital possible’.”

Steve Rafferty, UK managing director, Avaya, says: “The Youbiquity Finance research contains an encouraging message for financial services firms but it also highlights new challenges. Firms must act now if they are to continue to satisfy the rising expectations of digital consumers. They need to build digital contact platforms around the customer and ensure that they’re integrated across each channel. If they do this, the research suggests that they will continue to nurture improving relationships with their customers.”