Research centered around BCG’s Retail Banking Consumer Study illustrates that 66 percent of Saudi Arabia’s banking customers are actively looking for new banking offers but more than 56 percent struggle to identify differentiation between most banks.
Riyadh, September 21, 2020— The expectations of consumers across the Kingdom of Saudi Arabia’s (KSA) banking segment continue to increase, and the number of people open to changing their bank is rising, according to a new report by Boston Consulting Group (BCG).
“We surveyed over 2,000 respondents in KSA to understand the changing consumer sentiment and behavior in banking. The results suggest that c ustomers have multiple banking relationships and switch banks easily. Over the past year, 20 percent of customers have already changed banks. Limited product selection and poor customer service were the key drivers behind the attrition. This was even more prominent in the affluent segment, where more than 30 percent of customers changed their bank in the past 12 months,” said Mustafa Bosca, Managing Director and Head of Financial Institutions Saudi Arabia, BCG . “ The results also suggest that while the preference towards digital banks is becoming more prominent, branches do remain important especially for the more complex banking products such as mortgage or investments.”
“Excellent customer service, a respected brand, and a top-notch digital experience are the primary reasons why customers have recommended and chosen new banks in recent times,” said Bhavya Kumar, Partner, BCG. “Customer demands and expectations are high, especially regarding the functionality of digital channels. Clients would like to buy new products in 2 or 3 clicks without having to visit a branch. The study shows that 89% of respondents would be willing to open an account with a completely branchless bank.”
Despite the strong appetite for digital banks among consumers, many also believe there are areas for improvement across traditional channels, including telephone banking, branches, and ATM services. Although online and mobile banking is a growing trend and easy bill payments, instant transfers, and personalized offers are attractive propositions, branches and in-person visits remain an integral element of the banking sector.
“The evolving consumer behavior trends that we are witnessing mean banks must explore new avenues to upgrade their services across channels – it is not about investing in digital at the expense of branches but rather about being able to manage the omnichannel experience consistently,” said Martin Blechta, Project Leader, BCG. “At present, top banks still have a stable customer base, and 50 percent of higher-income customers have been with the same bank for five years or more. The onus is now on banks to meet evolving consumer demands and invest to make necessary changes to retain their business and provide ease and convenience that customers demand.”
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