4 charts

4 charts on obstacles getting in the way of banks’ digital transformation efforts

  • With consumers’ relationships with their banks constantly changing, banks need to have a solid digital transformation plan to keep up with these shifts.
  • Banks are putting in the hours, but obstacles still abound.

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4 charts on obstacles getting in the way of banks’ digital transformation efforts

Banks continue to zero in on their digital transformation strategies. Still, according to Capgemini’s world retail banking report for 2022, several obstacles continue to stand in the way of their efforts – from the classic lack of hold on data to the more insidious blurry customer lifecycle. 

In four charts, here are some of the biggest challenges banks are facing in modernizing their services:

Thoughts on channels

Source: Capgemini

For the most part, execs and consumers seem to be of the same mindset when it comes to the importance of different channels in terms of bank interactions. For example, 80% of execs and 79% of consumers agree websites are an important part of communicating with banks. Meanwhile around 50% of both execs and consumers see social media as a viable form of communication with their financial institutions.

Still, there are some interesting differences of opinions between the two groups; most notably – 52% of consumers see wearables as, at the very least, a groovy way to communicate with their banks, whereas 93% of execs are more in the ‘I don’t think so’ state of mind when it comes to this channel.

Another day, another data problem

Source: Capgemini

With so much happening this year, a lot of things have remained surprisingly similar: A tomato is a fruit, fish don’t blink, and banks are still facing data troubles.

Banks’ efforts to get ahold of their data continues – but unfortunately, with not a lot of results. 95% of banking executives say that legacy systems and outdated core banking technology continue to get in the way of making improvements to data storage and use, according to the report.

And when it comes to top data dilemmas, 80% cited reliability within their top five concerns. It shouldn’t be a surprise then that the second concern most likely to make it to the top five involves difficulty generating insights. 

A not-so-lively customer lifecycle

Source: Capgemini

Troubles with data seem to be seeping into banks’ experience across the customer lifecycle, as well. For example, 82% of respondents say they have difficulty identifying new customer segments. 

Then, in terms of conversion, 55% of bank execs say they struggle to provide an easy onboarding process, while 49% say they’re not meeting expectations in terms of delivering personalized content within the right channels.

Finally, when it comes to actually engaging customers, 61% of execs admit they’re falling short, while 51% claim organic customer growth is not where it should be at the moment. 

Platform plans fall flat

Source: Capgemini

A platform business model could help banks fill demand gaps and innovate at a pace that allows them to keep up with shifting demands.

But these companies still have some bugs to work out before they can actually get the full benefits of a platform model. 

The biggest obstacle banks are dealing with when it comes to incorporating a platform model, according to the report, is product cannibalization. Just under 80% of execs say they’re trying to figure out how to make sure an ecosystem partner’s product doesn’t eat away at their own revenue. 

Another issue banks are tackling is brand delusion. Over 70% of execs say they’re facing this challenge – trying to figure out how to keep their brand identity from falling into behind-the-scenes status, while ecosystem partners get the spotlight.

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