In modern society, which is characterized by speed, traditional banking services in the EU and US encounter the challenge of meeting the changing needs of customers. While there is a wave of technological advancement going on, banks still seem to be behind when it comes to customer-oriented services. Let us explore the critical areas where banking institutions go wrong in serving their customers, presented using recent figures, real-life cases, and product insight.
- Digital Accessibility: While the Internet and mobile banking have become mainstream, not every bank can provide an unbreakable digital experience. According to a recent survey by [Accenture] (https://www.accenture.com/us-en/insights/banking/consumer-banking-survey), 43% of consumers in Europe and the US say they find it hard to navigate the bank's digital platform. Such difficulties frequently become a source of irritation, especially among older users and those who are not technology literate at all.
- Outdated Infrastructure: While there are still many traditional banks that stick with their old IT systems and, thus, expose themselves to cyber threats and system failures, the infamous case of the [2012 RBS computer glitch] (https://www.theguardian.com/business/2012/jun/26/rbs-natwest-ulster-bank-customers) is a manifestation of the danger of trusting in outmoded technology. Such examples not only disrupt service, but also diminish trust in the banking system as a whole.
- Slow Payment Processes: Notwithstanding that there are fast payment solutions, cross-border transactions, and international payments can be delayed only by a few days with traditional banks. The lagging here may be painfully felt by business entities undertaking global trade or by individuals who may be compelled to send money as quickly as possible. As per [McKinsey] (https://www.mckinsey.com/industries/financial-services/our-insights/the-payments-journey-to-a-digital-future/), McKinsey research shows that the origins of inefficiency lie in the payment processing system. Europe and the U.S. can save billions annually by eliminating these financial intermediaries.
- Limited Product Offerings: Traditional banks usually provide an old-school range of items, including savings accounts, loans, and credit cards. Nonetheless, they face the challenge of being creative and fitting in with the dynamics of customers' expectations. For example, fintech companies like [Revolut] (https://www.revolut.com/?), [N26] (https://n26.com/), and other digital banks have been able to prosper thanks to their advanced features that provide instantaneous spending notification, fee-free currency exchange, and budget monitoring—services that traditional banks haven't shown much interest in implementing.
- Poor Customer Service: Contrary to what is preached about putting customers first, the typical bank may often fail to pursue individualized and timely support. Frustrating not being able to speak with a person, get a helpful response, and fill in forms that nobody understands: these problems bring about a feeling of being undervalued and neglected. According to a study by [J.D. Power] (https://www.jdpower.com/business/press-releases/2022-canada-and-us-banking-satisfaction-studies), the most recent studies carried out jointly by J.D. Power and Associates in 2019 paint a worrying picture for retail banks in Europe and the US as both sectors have seen their scores dropping over the last few years (www.jdpower.com/business/press-releases/2022-canada-and-us-banking-satisfaction-studies). This shows the need to improve service delivery.
By observing the area of customer experience in US and European banks in terms of straightforward financial services, a higher degree of the weakness of conventional banking is happening in this case. Customers are normally not facilitated by the old infrastructure that banks possess, which is slow to process their payments and lacks digital accessibility in their trade services. Traditional banks will keep being competitive, and to survive in the digital and customer-oriented environment, they should focus on innovative activities, apply technologies, develop their digital skills, and put the customer experience first. The very business venture can imply that the market moves to even more agile and customer-focused competitors, and you don’t pay enough consideration to a customer, so you lose a share.
