2024 retail banking trends: Achieving a unified customer experience
Chief Executive Summary
In the 2023 version of this report, we placed a strong emphasis on rebuilding trust in response to an historic fall, particularly among younger generations. I’m happy to report that the news is more positive this year with fewer signs of widespread distrust of financial institutions. A global study by Statistica found that, worldwide, customers award their banks around four index points out of five, indicating generally positive levels of trust (Statista).
Of course, if you scratch even a little under the surface, a more complex image emerges. Trust in the financial sector isn’t binary, leaving room for certain institutions to perform better than others. A Kantar report found that 58% of consumers globally believe that their national banks are more trustworthy than regional or local banks, with 42% opting for the latter (Kantar). What’s more, younger generations, both millennial and Gen Z, are also more likely to have lower levels of trust in financial institutions in general, which is an ongoing concern.
According to Forrester, the banks that are perceived to be empathic and dependable will be those that thrive. In general, the benefits of trust are well documented and accepted by banking professionals. In fact, the Forrester report lists explicitly the benefits of building trust – namely increased revenue, better engagement, willingness to forgive (product-related errors), and brand loyalty (Forrester).
Where does that leave us right now? We know that customers are willing to trust financial institutions and the benefits of securing that trust. We know that the successful institutions will be able to display the somewhat vague concepts of “empathy” and “dependability”. What’s left to be explored is how retail banks can achieve trust. I believe this is the primary question that needs to be addressed in 2024.
At Unblu, we believe that the answer lies in customer centricity built upon a unified experience. Banks need to place their customers right at the core of their business operations to forge positive, long-term relationships.
In terms of service experience, this requires leaning into enhanced digital capabilities – particularly with regard to embracing AI-powered capabilities, investing in mobile channels, and innovating with phygital experiences.
Beyond this, there is a lot of room for banks to differentiate themselves. Some of this is defensive. There is simply no room to allow cyberattacks to penetrate banking systems in the coming year as the fallout in trust is too costly. Likewise, digital transformation initiatives should be mature, with leading institutions now entering new phases to address digital service gaps.
In terms of active strategic opportunities, there are a number of developing trends, ranging from ESG and Buy Now Pay Later to niche journeys, and beyond.
Overall, 2024 is full of opportunities to improve customer centricity for the banks with the strategic vision to leverage them.
Using this report
We have divided this report into three separate sections to provide key executives and stakeholders in retail banks with strategic support based on current industry trends.
01
Part 1 has been designed to provide a general overview of the financial industry landscape, allowing readers to understand the current context and engage in soft benchmarking.
02
Part 2 covers the developments that simply cannot be ignored. Whether due to customer safety, risk level, or highly developed trends, banks that are not currently in line with the findings in Part 2 should take immediate action.
03
Finally, Part 3 focuses on opportunities for differentiation moving forward. While not all institutions may choose to incorporate each finding, they represent areas of opportunity given today’s context.