Neobanks, majors and the upper hand in open banking
Neobanks entering the market cannot steal the march on incumbents by just winning on product-based relationships with consumers. They must make the main bank relationship their sole focus and here is why.
With the Consumer Data Right now passing legislation and open banking becoming a reality, it’s well worth having a look at where trust sits now with the banks.
In a column for AB+F, RFi Group chief product officer Alan Shields writes that the last 18 months have been a significant test for the financial services community in Australia.
Long-established and well-regarded brands have been dragged through the media and subjected to the court of public opinion as the Banking Royal Commission unfolded.
Board members and executives lost their jobs and the industry took a long hard look at itself – along with everybody else.
Over this time, RFi has tracked consumer perspectives on trust. We even launched the RFi Trust Index, to enable banks to track and monitor customer trust.
Why do we care about trust? Because it sits at the very heart of customer experience. Trust is directly correlated to satisfaction and NPS and indirectly correlated to intention to switch. In particular, this is true when one focuses on the primary transactional banking relationship – the main bank relationship
So where does trust sit now?
RFi’s Group’s June 2019 survey of a nationally representative group of 2,000 Australian adults shows us that the news is not necessarily bad.
In fact, the trust that consumers have in their primary transaction account provider has been going up over the last year (as measured by taking those that give a score of 8, 9 or 10 for trust on a 0-10 scale).
At an industry level we have seen trust in the primary transactional banking relationship increase steadily from 60 per cent in Jun-18 to 64 per cent in Jun-19. I
ING leads the way – awarded the most trusted bank by RFi Group - having seen trust rise from 69 per cent to 80 per cent over the same period. The big four banks have also seen rises and now are more trusted than they have been during the last year.
RFi’s research on open banking has shown that the main banks are in the box seat when it comes to garnering their customers’ agreement to share personal data. Other organisations – even other banking organisations are at a clear disadvantage. Clearly this trust then is critical for success going forward.
The full report if featured in the September edition of AB+F.