Banks caught offguard in fending off fintech threat – report

63% of the customers are currently using fintech products or services, and 55% are much more likely to refer friends and family to their fintech provider than to their bank (38%), according to the 2016 World Retail Banking Report (WRBR), released by Capgemini, a consulting corporation, and Efma, a global non-profit organisation, globenewswire.com reports.

96% of banking executives agree that the industry is evolving towards a digital banking ecosystem but only 13% say they have the systems in place to support it. 82% of consumers consider FinTech service providers easy to use, 81% consider they offer fast service, and 80% consider they provide a good user experience. However, only 36% of banks agree that fintechs offer fast service and only 40% agree that fintechs provide a good experience.

Globally, banks improved their customer experience performance by 2.9 points on Capgemini`s Customer Experience Index (CEI), with gains in more than 85% of the countries surveyed. However, this advancement did not translate into retention, referrals and cross sales. Only 16% of customers said they are likely to purchase an additional product from their bank.

70% of banks view trust as their greatest strength, whereas fintechs reach 88% level of trust among the consumers across all regions. Despite the concern of 90% of banking executives, less than one quarter feel they have an advantage over fintech firms in terms of agility or ability to innovate to address these challenges.

Moreover, only two-thirds of bank executives view fintechs as partners and less than one-fifth (18%) plan to acquire fintech firms or their technology. The bank development strategies takes the form of collaboration (46%) and investment (44%).