PA finance expert, Christian Fegler, has had a byline article published in Realtid magazine in which he highlights the need for Nordic banks to rethink what they do in order to retain their customers.
Christian outlines the results of a recent report on customer satisfaction in the banking industry which shows large banks are failing to retain customers. He sets out how traditional banks are facing major challenges from Google, Apple and Facebook as they begin to offer financial services.
The article presents findings from uSwitch.com survey that showed that one in four 18-34 years olds believe that companies like Google, Apple and Amazon would do a better job in providing financial services than their existing bank. The same survey shows that 7 out of 10 prefer to use banks' online services rather than visiting a bank´s premises. Meanwhile, the Svenskt Kvalitetsindex latest customer satisfaction report on the banking market shows huge dissatisfaction among young people and a great propensity to switch banks. Christian believes all this means that the loyalty of tomorrow's customers will primarily depend on the supplier's ability to provide digital services.
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However, he explains that the financial sector has a poor track record in ground breaking innovation. Christian highlights the findings of PA's global innovation survey that showed only one in ten leaders in the financial sector said they focused on ground breaking innovation.
Christian goes on to underline that the banks are not taking this challenge seriously, preferring to return money to shareholders rather than investing in new technologies and other meassures to increase customer satisfaction.
He then provides three alternative paths that traditional Nordic banks could follow in order to strengthen their competitive position. the first is to form strategic alliances with the most dominant technology companies or to acquire them. The second option is to create a separate mobile bank for all new customers, avoiding the costs of running expensive branch operations.
The final model is to offer personal services availability and hours that reflect the modern needs of customers.
Christian concludes that traditional Nordic banks do have two big advantages. They still have the majority of customers and those customers are very loyal; people are more likely to split up from their partners than change their bank. However, the looks set to change and once the changes start, they cannot be stopped. So today's banks need to act now.