According to the company’s eleventh annual World Retail Banking Report, more than 25 percent of countries reported a decrease of more than 10 percent in the share of customers with positive experiences, a significant reversal from last year, when many countries saw increases of more than 20 percent. The findings underscore the need for banks to fully understand evolving customer preferences and the expectations of Gen Y consumers.

“One of the biggest concerns we noted was the gap between what customers claim they are looking for in terms of social media banking capabilities and that which banks say the plan to implement in the future,” said Bill Sullivan, head of global financial services market intelligence at Capgemini.

“For example, customers ranked access to account information via social media as most important, but less than 1 percent currently receive that functionality,” he said. “And in fact, 58 percent of banks interviewed noted they have no plans to offer account information through social media. 

“Additionally, 42 percent of banks say they have no intention of offering transactional capabilities through social media.  The reality is customers, especially Gen Y, are looking for greater levels of convenience with regards to the banking needs.”

High expectations
The growing prominence of Gen Y, the tech-savvy population born between

1980 and 2000, is an important reason behind the overall decline in this year’s customer experience ratings, the report found. Gen Y consumers comprise one-quarter to one-third of the population in many markets.

In particular, this group’s expectations of how banks should serve their customers, particularly via digital platforms, are significantly higher than those of the general population, according to Capgemini. These consumers are also considerably less likely to have positive experiences with their banks.

The situation is particularly noticeable in North America, where only 41.7 percent of those between 18 and 34 years cite positive experiences, compared to 63.4 percent of those of other ages.

In other regions, positive experiences for Gen Y lag those of other age groups by anywhere from 7 percent to nearly 10 percent.

An important take away from the report is the need for banks to develop social media strategies, with 89 percent of bank customers today having a social media account. Additionally, more than 10 percent of customers say they already use social media at least once a week to interact with their bank.

Early stages
Most banks are still in the very early stages of developing a plan for social media.

According to the report, 42 percent of banks say they have no intention of offering transactional capabilities through social media and 58 percent say they will not offer account information.

Banks are implementing some social media functionality, with 32 percent of banks currently offering collaborative functionality and another 51 percent planning to do so soon. Additionally, 56 offer information gathering and 48 percent offer servicing.

The report also found a correlation between positive customer experiences and increased profits, with customers who have positive experiences more than three times more likely to stay with their bank than those who have negative experiences. These customers are also three to five times more likely to refer others and purchase another product.

“Overall customer experience levels decreased for the first time in three years,” Mr. Sullivan said.  “This marks a potentially dangerous inflection point where banks need to respond. 

“Customers are increasingly looking for more capabilities from their banks via mobile and even social,” he said. 

“The demand is largely driven by Gen Y.  And the reality is Gen Y are much more difficult to satisfy.”

Final Take
Chantal Tode is associate editor on Mobile Commerce Daily, New York