With changing consumer expectations, increasing competition from fintech and non-bank players and emerging technologies and an evolving regulatory environment, African banks need to up their game to attain experience maturity levels demanded by today’s customers, a report shows.
The KMPG Digital Channels Scorecard Report 2022, which was launched on Tuesday, unveiled insights into the state of user experience on 26 African retail banks channels drawn from Nigeria, Kenya, South Africa, Ghana and Senegal. The featured banks have a relatively large retain customer base in their respective countries and across Africa.
It is based on KPMG’s review of 12 retail user journeys clustered into five journey groups across four digital banking channels -mobile banking, internet banking, USSD banking and chat banking. The five-user journeys include digital onboarding, payments & transfers, digital lending, self-service and customer.
Based on the reviews of the capabilities demonstrated by the banks across the five categories, KPMG ranked the banks into four distinct categories both for the user journey and the specific channel. The categories include Leader, Challenger, Follower and Late Starters.
The leader category features banks that demonstrate that they understand the expectations of today’s clients and offer a wide range of capabilities across various user journeys to facilitate a wholly digital interaction. Those in the challenger category offer effective and efficient user journeys on their digital platforms but lack key capabilities to ensure they meet user expectations and they deliver a superior user experience.
On the other hand, Banks featured in the follower category have limited capabilities on their digital channels to deliver a wholly digital interaction while those under the late starters category are yet to deliver digital capabilities for user journeys on one or more channels. Gaps in their digital channels often result in a high user abandonment rate for the impacted customer journeys.
The report found out that only 1 bank out of 26 consistently appeared in the leader category for the 5 anchor journeys; while another 5 banks appeared in the Leaders category for 2 or 3 anchor journeys. In other words, only 6 (approximately 25 per cent) of the 26 banks are operating at the experience maturity levels demanded by the new generation of consumers. The remaining 75 per cent have work to do particularly on digital onboarding, self-service and customer care.
The report established that only 12 of the 26 banks have scheduled (or recurring) payment features on mobile and internet banking. The number drops significantly when we consider those analytics to drive the adoption of recurring payments.
50 per cent of the 26 banks are yet to embrace the transparency paradigm for fees and charges on the digital channels. The report called on banks to be more deliberate and transparent in communicating transaction costs to users.
Less than 50 per cent of the banks were found to have implemented lending capabilities on at least one digital channel and therefore passing a significant opportunity to address financial inclusion issues, especially on retail lending.
On self-service, the report established that only 34 per cent of the banks have implemented comprehensive card-control functionalities on mobile.
“Nearly 60% of the banks do not provide customers with prompt feedback on issues experienced,” the report says.
The report warned traditional banks that they would lose their market share to new players as customers expect banks to focus on creating experiences that are functional, responsive, intuitive and delightful.
“As new Fintechs and Neo-banks begin to scale on the continent, the window of opportunity to attain experience maturity levels demanded by today’s customers may be closing faster than imagined for retail banks. To attain these experience maturity levels, retail banks need to be more intentional with product design, journey optimization, leveraging analytics to provide more personalized offerings and building resilient digital channels, “ the report states.