Boost for consumers as banks recognise room for improvement on service and delivery
An international study of over 1,000 senior professionals in banks, lenders, PFMs, investment companies and retailers, by leading open banking provider Yolt Technology Services (YTS) has revealed that 42% of banks recognise the need to improve their service offering and boost customer satisfaction levels in the year ahead.
In particular, bankers noted shortcomings in their organisation’s ability to manage and process payments, with just 47% currently happy with their abilities in this space.
Banking professionals’ dissatisfaction with current services comes during the COVID-19 pandemic, which has seen millions of customers start to use digital financial services in the absence of branches, causing banks to face more online requests and applications than ever before. Naturally, customers still expect an accessible and convenient service from banks, who are competing with neo-banks better equipped to keep up with customer demands during the pandemic, largely due to being designed to offer super-fast digital services.
As a result, adoption of open banking technology is well underway among banks, who see it as a solution to stay competitive and deal with the accelerated digitisation of financial services. Banks led adoption among previously analogue sectors when it comes to investment in at least one form of open banking technology, with nearly two thirds (63%). Only personal finance management tools were higher with 68%, which is expected given their strong fintech credentials.
The research also revealed how banks expect to deliver the much-needed improvements. A majority (55%) recognise open banking’s ability to improve efficiency overall, a much-needed enhancement given the concern over processing speeds. In areas such as applications and payments, widespread adoption of Open Banking by banks would allow consumers to know about whether a loan or mortgage had been approved in minutes, rather than days or even weeks.
Alongside this, 44% of bankers expect Open Banking to improve the customer experience, a boost for consumers who can expect more personalised offerings and the ability to find out more about their finances in one place through services such as data enrichment.
To support these businesses and the remaining 37% who are yet to adopt, in delivering the required improvements through open banking, Yolt Technology Services has recently launched a series of guides to Unlocking the Value of Open Banking, available to download here: https://yts.yolt.com/whitepapers/value-open-banking
Leon Muis, Chief Business Officer at Yolt Technology Services comments:
“What consumers and businesses look for from their financial service providers has transformed dramatically in recent years, and many of the larger banks have been blindsided by the pace of change and as a result now find themselves out of step with what their customers need. The COVID pandemic and resulting lockdown period has served to bring this growing gap into sharp focus and, as our research shows, the banks themselves are increasingly recognising the need to change.
“Many banks understand that Open Banking offers substantial opportunities for them, including cutting costs, and for their customers, particularly the ability to provide a more personalised and faster user experience that allows them to access more of their financial footprint in one place.
“The specific issues banks have identified within their operations, such as weaknesses in the management and processing of payments, can be tackled with Open Banking technology. Payment Initiation Services (PIS) have the power to transform banks’ ability to cost-effectively execute and analyse payments on behalf of consumers, and are made possible thanks to PSD2 Open Banking legislation.
“Whilst some may be hesitant of investment during these times, Open Banking technology can boost efficiency, create a smooth digitisation process and cut costs at a time when these things have never been more important for businesses and their consumers.”