Visa & RFi Group reveal new target for banks: The Digital Customer

06/25/2015

Research commissioned by Visa reveals digital customers who interact with their bank via their mobile are a bank’s most valuable customer

New research released today from Visa, the global payments technology company, shows customers who use mobile banking are more loyal, satisfied and stronger advocates of their bank than customers who do not use digital banking channels.

The research, conducted with RFi Group, also found digital customers on average hold more products (2.8 products) with their main bank than people who don’t bank online or on their mobile at all (2.2 products) and are more likely to approach their primary bank for additional products such as mortgages and loans.

According to Stephen Karpin, Group Country Manager for Visa in Australia, New Zealand & South Pacific, “Technology is changing the customer banking relationship and this research shows it is the digital customer that holds the most value for financial institutions. In particular, the opportunities for cross-sell across the bank to loans and mortgages is significant.”

While digital customers are doing more of their banking via their mobile, this doesn’t come at the expense of face-to-face interaction. According to the research, 70 per cent still view the branch as their most important banking channel.

Digital customers on average use more than twice as many channels (three channels) to interact with their main bank as non-digital customers (one channel), challenging Australia’s financial institutions to deliver a comprehensive omni-channel experience.

The quality of the omni-channel experience is crucial to preventing churn with eight per cent of digital customers reporting they intend to switch their bank in the next 12 months due to low satisfaction with customer service.

“Financial institutions that deliver the best customer service and digital experiences across all channels will be rewarded with a larger digital customer base, made up of people who are more likely to take out more products, be more loyal and be greater advocates,” said Mr Karpin.

Alan Shields, Managing Director Advisory at RFi said, “Banks know that digital is a key channel for customers, but for the first time this research shows that their digital customer is actually their most valuable. This should prompt all banks to consider what’s driving this change and whether their digital strategy goes far enough to meet the expectations of this new breed of digital consumer.”

The research also found that a customer’s relationship with its main bank starts with their payment card.  Once banks hold the primary credit and debit card relationships, their customers are more likely to take out other products and to engage digitally.

“Australia’s financial institutions are all in the race for the digital account.  It’s no longer about having the payment card top of wallet, but it needs to be top of device, platform and merchant,” said Mr. Karpin.

Additional findings from the research, which indicate the importance of payments to the banking relationship, include:

• Customers who hold a primary card with their main financial institution (MFI) have longer mortgage tenures (7.19 years) than those that do not (6.68 years)
• 17 per cent of MFI customers without a primary card are likely to leave their bank in the next 12 months  compared to just 7 per cent of MFI primary card holders

Find out more:  The Visa-RFi Group Australian Payments Report: The changing payments behaviour of Australian consumers and the impact on banking relationships.

 

About Visa
Visa Inc. (NYSE: V) is a global payments technology company that connects consumers, businesses, financial institutions, and governments in more than 200 countries and territories to fast, secure and reliable electronic payments. We operate one of the world’s most advanced processing networks — VisaNet — that is capable of handling more than 56,000 transaction messages a second, with fraud protection for consumers and assured payment for merchants. Visa is not a bank and does not issue cards, extend credit or set rates and fees for consumers. Visa’s innovations, however, enable its financial institution customers to offer consumers more choices: pay now with debit, ahead of time with prepaid or later with credit products. For more information, visit www.visa.com.au, visacorporateau.tumblr.com and @VisaNewsAU.

About the Visa/RFi Group research
The Visa-RFi Group Australian Payments Report is based on an online survey of over 2,000 Australian consumers. This survey has been conducted annually since 2011, and was most recently conducted in February 2015.  

Media contacts:
Seamus Horan
Fuel Communications on behalf of Visa
02 8217 6500 / 0421 924 367
visa@fuelcommunications.com.au

Jillian Friant
Visa
02 9253 8811 or 0450 739 035
jfriant@visa.com