In­dian Banks out­per­form con­sumer ex­pec­ta­tions with dig­i­tal pay­ments post de­mon­eti­sa­tion

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In­dian Banks per­formed ex­tremely well in meet­ing cus­tomer ex­pec­ta­tions in ar­eas of dig­i­tal pay­ments, om­nichan­nel ex­pe­ri­ence, stay­ing con­nected and in per­son ser­vice. How­ever, the ar­eas that per­formed be­low ex­pec­ta­tions were Fair­ness (trans­parency in how fees and ser­vices are priced), Re­li­a­bil­ity and Trans­parency in ser­vic­ing cus­tomer as­pi­ra­tions.

In an an­nual sur­vey com­mis­sioned by FIS in De­cem­ber 2016, dur­ing the tur­moil of In­dia’s bank note de­mon­eti­sa­tion, this year’s Per­for­mance Against Cus­tomer Ex­pec­ta­tions (PACE) re­port pro­vides a snap­shot of a unique time when the bank­ing in­dus­try was un­der in­tense stress. The re­sponse points to a dra­matic and rapid, shift away from cash as pay­ment. The scores were com­puted for ev­ery re­spon­dent based on how they ranked the im­por­tance of 18 key per­for­mance in­di­ca­tors (KPIS).

Fi­nan­cial in­sti­tu­tions in In­dia gained one point on last year’s PACE score, achiev­ing a score of 75, but seven points be­low the global PACE av­er­age.

“Rapid shift­ing of pay­ment modes from pa­per and plas­tic to mo­bile and cash­less helped banks es­tab­lish a stronger mul­ti­ple ser­vice re­la­tion­ship with their cus­tomers. The PACE find­ings also present a clear pic­ture on where In­dia’s banks need to fo­cus to re­main first in the minds of their cus­tomers” said Ra­maswamy Venkat­acha­lam, Re­gional Man­ag­ing Direc­tor, In­dia and South Asia, FIS. “In­sights from the PACE re­port high­light that the in­crease in dig­i­tal ac­cess and trans­ac­tions, in­clud­ing dig­i­tal pay­ments, is as­sist­ing in at­tract­ing and re­tain­ing cus­tomers. Op­por­tu­ni­ties ex­ist for banks to cap­ture more busi­ness and to help con­sumers be­come more fi­nan­cially healthy”.

Key Find­ings about In­dian Con­sumers

More than 60% of the re­spon­dents have used mo­bile de­vices to check their bal­ances, view re­cent trans­ac­tions, pay one or more bills, trans­fer funds be­tween ac­counts or re­ceive bank no­ti­fi­ca­tions.

Nearly 18% of the re­spon­dents use their pri­mary bank’s credit cards ex­clu­sively.

The im­por­tance of the pri­mary bank pro­vid­ing dig­i­tal pay­ment op­tions has risen year on year across all age seg­ments. More than 30% of com­mon pay­ments are done with mo­bile apps com­pared to cash, cheque or credit/debit cards.

What Gen Y in In­dia said

Con­sumers want to bet­ter con­nect with their banks at their con­ve­nience, at any time and from any­where.

The big­gest pain point, ac­cord­ing to banked Gen Y Con­sumer is get­ting time to phys­i­cally visit a branch.

Gen Y are far less sat­is­fied with their cur­rent bank­ing providers and are vul­ner­a­ble to at­tri­tion.

In­dia Re­sults

The PACE re­port of­fers in­valu­able in­sights into the view of con­sumers of fi­nan­cial ser­ help fi­nan­cial in­sti­tu­tions make sense of the con­sumers at­tributes, these are cat­e­gorised into three groups: RUN, CON­NECT and GROW.

In­sights from the re­port:

The re­port pro­vides five in­sights into the bank­ing trends in In­dia:

1. Dig­i­tal is not op­tional: The im­por­tance of the pri­mary bank­ing pro­vid­ing dig­i­tal pay­ment op­tions has risen year over year across all age seg­ments. Right now, more than 30% pay­ments are done with mo­bile apps (ver­sus cash, cheque or credit/ debit cards). Mo­bile pay­ments have gained the most trac­tion among young Gen Y, with se­nior Gen Y catch­ing up.

2.Gen Y mem­bers are driv­ing dig­i­tal con­nec­tiv­ity: Mo­bile pay­ments are gain­ing trac­tion quickly among Gen Y mem­bers, rais­ing the like­li­hood that mo­bile pay­ment adop­tion will fol­low a sim­i­lar path to mo­bile bank­ing. Se­nior Gen Y have the most num­ber of monthly in­ter­ac­tions with their bank­ing providers due to higher online and mo­bile bank­ing ac­tiv­ity.

3.Rapid shift to vir­tual pay­ments: Com­pared with the global norm, In­dia is more quickly mak­ing the shift from plas­tic to vir­tual cards. Al­ready, mo­bile pay­ments ri­val credit cards in pop­u­lar­ity and vir­tual cards are ex­pected to over­take plas­tic pos­si­bly in just a mat­ter of years.

4.Banks must tran­si­tion from Trans­ac­tions to As­pi­ra­tions: Op­por­tu­ni­ties abound for fi­nan­cial in­sti­tu­tions to help con­sumers plan and save for life events and re­alise their fi­nan­cial as­pi­ra­tions. Across the board, when asked where they would turn for fi­nan­cial as­sis­tance for a key life event, In­dia’s con­sumers over­whelm­ingly cited their pri­mary bank­ing provider as their first choice. How­ever, all too of­ten, the com­pe­ti­tion steps in and cap­tures sig­nif­i­cant ac­count share.

5.Ad­dress­ing Cus­tomer’s pain points: Bank­ing providers have nu­mer­ous op­por­tu­ni­ties to as­sist con­sumers – es­pe­cially those with im­por­tant life event. Sig­nif­i­cant per­cent­ages of Gen Y mem­bers re­port hav­ing prob­lems when try­ing to en­gage with their pri­mary bank. Com­monly, they have dif­fi­culty find­ing time to visit a bank branch and have trou­ble ac­cess­ing in­vest­ment ad­vice or as­sess­ing whether an in­vest­ment makes sense for them.

A com­plete copy of the PACE re­port for In­dia can be down­loaded from http://clos­ethe­gaps.fis­ and http://clos­ethe­gaps.fis­­try-in­sights/

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