Pattie Lovett-Reid: Big banks strive to give better digital financial advice
In today's environment, anyone can call themselves a financial expert, develop a financial app or offer saving tips to those who are eager to take control of their financial situation. The challenge for consumers is that not everyone is qualified to do so, nor has the expertise to warrant being listened to – and yet Canadians are desperately seeking advice and guidance.
So who do they most often turn to? Eighty-seven per cent of respondents to a recent survey say they are interested in receiving financial advice from their banks, while just 33 per cent say they actually get it.
J.D. Power’s 2018 Canada Retail Banking Advice Study examined the five largest Canadian retail banks, comparing retail banking customer satisfaction, retail bank-provided advice and the account opening process.
Before delving into the results of J.D. Power’s study, it’s important to note that the big point of differentiation between the retail banks isn't product; it is all about the service. If you want to capture market share and a bigger share of the household wallet, service is the game changer.
It is no longer enough to offer great service in one channel in a personalized way. Consumers now expect seamless customer service across all channels, from inside a branch, to a bank’s website and mobile app.
Here are a few key findings from J.D. Power’s study:
- 87 per cent of retail bank customers want guidance. Forty-seven per cent of respondents say they seek investment-related advice, 45 per cent want quick tips to help improve their financial situation, and 42 per cent look for retirement-related advice
- Customers believe they benefit from advice: 90 per cent of those who receive advice/guidance believe they have benefited from the information.
- Times are changing and there will be more disruption in the financial services industry. Restructuring at financial institutions has been happening fast and furiously as fewer people line up to see a teller and more embrace a “banking anywhere, anytime” time mentality. However, given the pace of change, as big as the financial institutions are, they can't afford to drop the ball in areas of digital advice.
- The key takeaway is that banks are struggling to deliver advice digitally. Sixty per cent of customers who received advice face-to-face said they felt it completely met their needs. However, the number falls to 37 per cent among customers who received advice digitally and to 35 per cent who received advice via email.
- The race for increased market share lies in the 58 per cent of customers who want to receive advice through their bank's website and mobile app, but only 10 per cent of them say they have received advice in this manner.
- Here’s how the banks stack up when it comes to customer advice satisfaction, according to J.D. Power: RBC leads the pack, followed by CIBC, BMO, Scotiabank and rounding out the top five, is TD Canada Trust.