Digital experience the most important differentiator for Australian banks

New research reveals Australia’s banks deliver the best digital experience but need to do more to engage young, digitally savvy customers

New research released today from Visa, the global payments technology company, reveals digital experience plays a greater role in influencing how consumers feel about their banks than it does with other service providers like retailers and utilities.

The research, conducted with RFi Group, found digital experience plays the greatest role in influencing sentiment in banking compared to all other sectors. In good news for the financial services industry, 33 per cent of consumers rated the banks as providing their best digital experience, versus 21 per cent who indicate online retailers and 12 per cent who indicated a telecommunications provider.

Ease of experience (56%), which consumers typically define as easy navigation, user-friendliness and a logical look and feel, was identified as the greatest driver among consumers who indicate their best digital experience is with a bank.

Rob Walls, Head of Product, Visa Australia, New Zealand and South Pacific said, “As a global payments technology company, Visa sees innovation in digital banking around the world. It’s clear that Australia’s banks are leading the way both locally and globally when it comes to offering outstanding digital experiences to customers. The continual investment in the design and features of online banking apps and services is paying off.”

The digital experience challenge: Pioneers to push for innovative digital offerings

Using a mix of consumer demographics, levels of device ownership and usage, lifestyle factors and digital banking behaviours, Visa and RFi Group have identified a new way of understanding how customers engage with digital services. In this analysis, the research identified a highly digitally engaged customer that holds the most value for the banks – the Pioneer.

The Pioneer group is predominately made-up of 16-35 year olds, who have 16 per cent more than the average income, are 55% more likely to hold a personal loan and are 21% more likely to hold an investment product than average consumers.

However, consumers under age 25 are less likely to pick banks as the provider of their best digital experience, instead choosing social media and online entertainment providers.

“Sophisticated digital banking customers are increasingly having their expectations shaped by interactions with other industries. While banks are currently the leaders in digital experience, there is a risk of complacency if they don’t continually adapt and offer new features and services,” said Mr. Walls.

Reward program innovation in 2017

The evolving payments landscape in Australia will challenge the value proposition of reward programs for customers. Based on the research, the majority of consumers (62%) believe discounts, benefits or rewards on other banking products will not be a fair replacement for the reward points they currently earn.

However, the highest value customer segment, Pioneers have a different perception of value. 61 per cent of Pioneers rate the ability to control their credit card account via a mobile app highly appealing and 37 per cent say they would be highly likely to apply for a card offering the capability.

“Australian banks that appropriate the best digital initiatives from other industries and create propositions that reset the perception of value will encourage consumers to choose and engage with their products now and into the future,” said Mr. Walls.

Find out more: The Visa-RFi Group Payments Report 2016: Driving Engagement and Differentiation, and the Rise of the Digital Customer

This article was first published by Visa Australia.

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