Consumer appetite for digital banking services continues to grow in the countries of the Gulf Co-operation Council (GCC), accelerated further by the COVID-19 pandemic, according to a new survey conducted by Backbase with YouGov.
Eighty-nine percent of respondents to the survey said that they are now more likely to opt for digital banking services rather than make a physical visit to a bank branch, with consumers saying they prefer digital self-service banking solutions delivered with the same convenience as their e-commerce, entertainment and transport solutions.
Movement restrictions or closures of bank branches in the early days of the pandemic forced consumers online, and banks responded by rapidly shifting products and services to digital platforms. The research showed that 77% of respondents say that they use digital banking services at least once a week, and 30% use services once a day or more.
The sudden increase in digital adoption has dramatically advanced the Digital Transformation agendas for many banks in the region, with banking leaders recognising online banking services as becoming critical to increasing customer retention and growing revenue streams through personalised services. Consumer expectations from digital banking has shifted from just day-to-day banking services and transactions, to also include more complex interactions, such as remote account openings or subscriptions to new products or services such as getting a loan or subscribing to insurance. However, 31% of respondents say that their bank is weak when it comes to offering seamless access to online banking services, highlighting an area where banks need to step up their performance.
According to Backbase, many banks have relied on rolling out standalone applications and self-contained systems to add new functions and services to their online banking offerings, creating fragmented systems that don’t deliver a good experience to customers. With further Digital Transformation ahead, financial institutions need to ensure that they have the right platform to manage future expansion.
“As the pandemic recedes, banks have the opportunity to provide enhanced customer engagement online, which will pave the way for physical branches to only deliver more complex, high-value activities. To make sure that they can capitalise on changing customer behaviour, banks will need to break free from siloed technology architecture and bring engagement to the forefront of their digital operations. By adopting the single platform approach to technology that other industries have already mastered, financial institutions can be leaner and more flexible, with the ability to instantly execute new digital services while also providing enhanced customer support,” said Matthijs Eijpe, Regional Vice President Sales EMEA at Backbase.
Customer experience differentiates successful digital financial services from failures with 44% of respondents citing poor customer relations as a key influencing factor in making the decision to switch to a different bank.
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