Nearly half of millennials have considered switching banks for better digital experience

MuleSoft today released a new global report titled Customer Experience and the Connectivity Chasm. Based on a survey of more than 9,000 consumers, the report analyzes whether organizations are meeting customer expectations for a connected, personalized experience across industries and geographies. Disconnected experiences — the failure to personalize consumer data across touch-points and inability to provide information in a timely manner — were a recurring source of frustration for consumers.

Digital experiences are tipping the customer loyalty scales

The Customer Experience and the Connectivity Chasm report found that there is a growing willingness amongst millennials to switch banking providers in pursuit of better digital experiences. The report also highlights that in the era of open banking, millennials are the most willing to allow financial services providers to share their personal data with third parties to receive a more personalized experience.

• Almost half (49%) of consumers aged 18-34 say they have switched or considered switching banks in the last 12 months in order to receive a better digital experience.

• This compares to an overall global average of 27%, indicating that the appetite for digital experiences is generational.

• More than a quarter (27%) of consumers say they have replaced or considered replacing their traditional banking provider with an online or mobile-only banking provider. This figure climbs to almost half (46%) amongst 18-34-year-olds.

• Of the customers who say they have switched or considered switching banks for any reason, dissatisfaction with their current provider (42%), ease of opening an account (29%) and wanting a better mobile experience (24%) emerge as the top factors.

Open banking becomes more widespread

The report revealed that the use of open banking services is becoming more common, and consumers are willing to share more personal data with financial services providers to receive a more personalized experience.

• More than a third (39%) of consumers say that they have used an app to view bank balances or transactions from multiple accounts held with different banks or other financial services providers. This trend is lower in the U.K. (26%) and Germany (28%).

• Nearly half (46%) of consumers say they would be willing for financial services providers to share their relevant personal information if it meant they receive a more personalized experience.

• This varies by generation: 61% of 18-34-year-olds note they would be willing for their data to be shared for personalization, compared to just 32% of consumers aged 55+ years.

“Personalized experiences are highly valued among consumers, and consumers are willing to share more information to receive better services,” said Danny Healy, financial technology evangelist, MuleSoft. “This willingness is paving the way for open banking to truly take off, but many banks have yet to fully embrace the opportunities that are available to them. To maximize the potential of open banking and meet the demand for better digital experiences, banks must build an application network using APIs to collaborate with third parties, unlock siloed customer data and innovate faster. With this approach, banks will be able to harness open banking to deliver the personalized and digital experiences that customers crave.”

Disconnected experiences continue to hinder customer experience

The research reveals that financial services providers continue to struggle to provide a connected experience (e.g., knowing a customer’s preferences across all channels and providing access to the information they need within a timely manner). The industry is also battling against inefficient processes, which negatively impact the consumer experience.

• 55% of consumers feel that they currently receive a disconnected experience from financial services providers. Among those who feel they are receiving the most disconnected experiences are consumers in France (61%), Australia (58%) and Singapore (67%).

• More than half (57%) of consumers revealed they would consider changing financial services providers due to a disconnected experience.

• Geographically, consumers in the U.K. (60%), U.S. (62%) and Australia (71%) are the most likely to take their business elsewhere.

• Consumers cited applying for a mortgage as the most complicated (43%) and time-consuming (82%) task when engaging with a financial services provider.

• This was closely followed by applying for a loan, which 36% cited as complicated and 67% cited as time-consuming.

• 33% of customers also cited applying for an insurance policy as complicated and more than half (57%) said it was time consuming.

“These findings are a clear warning that banks that fail to deliver connected experiences risk damaging customer loyalty and worse losing business to other providers who can meet these expectations,” added Healy. “With a growing number of consumers valuing the convenience of connectivity, traditional players must prioritize speeding up and simplifying their services. By building application networks using APIs, banks can unlock data from silos and integrate legacy systems with new technologies. This API-led connectivity approach will empower banks to truly enhance the customer experience.”

Research Methodology

This global survey was commissioned by MuleSoft and independently carried out by Opinium Research. The total sample size was 9,030 adults: UK (2,002 adults), US (2,003 adults), Germany (1,000 adults), France (1,002 adults), Australia (1,000 adults). Singapore (1,010 adults) and Japan (1,013). Demographic split 18-34-years-old (2,084 adults), 35-54-years-old (3,410 adults) and 55+ years-old (3,536 adults). Fieldwork was undertaken online between 15-22 August 2019. The figures have been weighted and are representative of adult populations (aged 18+).