COVID-19 has seen a sustained and permanent shift in customer behaviours. Our global research findings1 show that a new consumer is emerging – one that is financially constrained, more advanced in their use of digital technologies, more thoughtful and selective in their decision-making, and keen to see COVID-19 as an opportunity to reset values in the world.
Most notably we’re seeing:
What does the emergence of this new consumer mean for banks in Australia? And how should they shape their future channel strategies to meet these behavioural changes? We believe there are four key steps that banks should now take.
With trust in the brand being of heightened importance for bank customers1 – banking providers need to develop a sustained plan to maintain and enhance customer trust beyond their initial COVID-19 response.
Consumers have told us that banks need to focus on:
Proactive communications from their banking providers was ranked in the top three prioritiesB by 38 percent of Australian consumers. Customers continue to want simplified and clear communications from their banks. Organisations must continue to keep dialogues open with their customer base – and explain why decisions have been made, and why they are fair and reasonable. This approach saw them perform well in the early stages of the pandemic. As we move into dealing with hardship and vulnerable customers, communications to customers need to be clearer and more timely than ever.
While past barriers have been broken down as use of digital has accelerated – we see an emerging risk of a behavioural snap-back as restrictions are eased, which may undermine the sustainability of the benefits realised. The scale of this will depend on how successfully providers achieve the following:
The cost benefits to an organisation of the digitisation of customer channels have long been propounded. At an aggregate level our research shows a decrease in intent to use branches to perform standard banking activities (65 percent pre COVID-19 versus 44 percent in the new normal)1. However, nuances exist that need to be understood specific to the customer base and segments. For example, our research shows:
While the market impetus to reduce physical footprint is well understood, banking providers need to transition with a well-planned implementation to avoid alienating (or even losing) certain segments. Banks should not forget the importance of face-to-face, or at least voice-to-voice engagement channelsE – which provide an ever-decreasing opportunity to build personalised and trusted relationship with customers.
We believe now is the time for banks to look at persistent shifts in consumer channel preferences and build on their actions taken during COVID-19. Providers should stay the course with their focus on digital, investing in capabilities that will compliment a leaner branch network – notably seamless cross-channel integration and high-value transaction digitisation. Failure to do so provides an even greater opening for challenger and digital-only banksE to entice Australian customers to a more valuable proposition.
This article is part of KPMG's Major Australian Banks: Full Year 2020 Results Analysis.
A. ‘Loss Aversion’ is the tendency is to act to avoid losses, rather than capture gains.
B. Thinking about you as a customer, what type of things do you think that banks should be focusing on now? Prioritisation of vulnerable customers and key workers (39%), Provide digital security to protect my account(s) (37%), Advice to avoid online fraud and scams (38%), and Proactive communications with regards to the effect of Coronavirus on their service offering (38%).
C. Percentage proportion of consumers who rate each as important in their decision-making: 24/7 webchat (35%), Work across different devices (28%), Call-back option (27%).
D. Anecdotally we have even seen organisations see an uptick in average call handling times across many contact centres – providing further evidence that customers still see a place for social and personal interactions with their providers, as long as this is at their choice.
E. One in ten individuals are actively considering switching banks as a result of COVID-19, and of those, over half (53 percent) of Australian banking consumers are exploring digital bank alternatives1.
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