In a recent analysis by Capgemini and Efma, retail banking executives express concerns over their capacity to provide genuine omnichannel and personalized customer experiences, especially as fintech companies continue to gain traction in the market.
The latest edition of the World Retail Banking Report draws on insights from over 8,000 consumers and 142 banking leaders across 29 countries. Findings reveal that approximately 75% of customers are drawn to fintechs for their quick, user-friendly, and cost-effective solutions. Conversely, nearly half of the surveyed individuals indicated that their current banking relationships lack fulfillment and emotional connection, with 52% labeling banking as “uninspiring.”
Capgemini emphasizes that in order to remain competitive with these emerging fintech rivals, retail banks must reevaluate their business models to enhance customer engagement. However, this transformation poses challenges, as 70% of banking executives express concerns regarding their inadequate data analysis capabilities.
To bridge the gap with fintechs, many traditional banks are integrating their services with non-financial lifestyle products and exploring Banking as a Service and embedded banking solutions through partnerships with non-financial third parties. Yet, this approach carries inherent risks: 78% of banking leaders fear that collaborating with ecosystem partners may compromise their existing products, while 72% worry about potential brand dilution.
Nilesh Vaidya, Global Industry Head for Retail Banking and Wealth Management at Capgemini Financial Services, remarks, “The pathway to growth appears straightforward. Customers seek personalized experiences tailored to their digital journeys. However, the real challenge lies in execution.”
He further notes, “Retail banks must overhaul their overall business strategies, focusing on delivering the personalized, lifestyle-driven ecosystems that customers have come to expect from their digital engagements. Without addressing the noticeable gap between customers’ digital and physical banking experiences, traditional banks may find themselves outpaced by more nimble fintech competitors.”
For further insights, you can download the full report.