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Visa Consulting & Analytics

October 2022

 

2 - 3 Minutes

Where Next for Retail Banking?

If there is one thing the diverse countries of the CEMEA region have in common, it is that the vast majority of customers have already embedded digital technologies into their everyday lives. Banks are eager to follow the trend and take advantage of it.

In order to better understand the trends in behavior of retail bank customers in the Central and Eastern Europe, Middle East, and Africa (CEMEA) region, Visa has conducted research across ten regional markets looking at: overall usage of digital technologies, customer preferences between digital and traditional banking channels, customer experience drivers for digital channels, and perception of digital banks.

Retail customers are more digital than ever

Visa Consulting and Analytics’ (VCA) research reveals that most bank customers in CEMEA already use digital technologies in their everyday lives and expect a high-level digital experience from their key partners, including banks. Digital adoption accelerated in the wake of COVID-19 lockdowns and the advent of remote working. And this extends to banking as well, with up to 80-95% of customers across CEMEA regions already using digital or mobile channels to interact with their banks.

Moreover, the adoption of digitally active clients is more attractive to banks, with VCA’s research demonstrating that they are more profitable, providing greater opportunities for banks to sell other products and strengthen customer loyalty.

Appetite for cashless payments takes center stage

Customers are more willing to use cashless payment methods, both online and offline, with some notable regional sub-differences such as favoring debit card use in Eastern Europe, pre-paid cards and e-wallets in the Middle East and mobile money in Africa.

Mobile is king: A high-quality mobile channel is a must for any successful retail banking business

Customer research reveals, however, that channel transformation in banking is still ongoing, leaving plenty of room for CEMEA players to develop more effective banking channels and fully match customer expectations.
VCA’s research elaborates on these consumer preferences, highlighting that in many CEMEA markets customers are “mobile dominant”, when it comes to banking channel preference. This being said, research also shows that there is a case to be made for focusing on the quality of mobile banking apps, as customers tend to engage more with higher quality apps, affording these banks another opportunity to use each interaction to cross-sell or boost customer loyalty.

Customer expect even more from bank’s mobile channels

Mobile banking technologies have progressed a long way to become the dominant mode of interaction between banks and their customers. However, there is still a significant gap between customer expectations and the actual offering. While each region in CEMEA has specific demands of the mobile banking experience, our research reveals four common patterns where customer expectations are still not met to a large extent.

Competition for customers is fierce and digital banks are in it to win

Competition for customers is getting more intense – a majority of customers already have several banking relationships and mobile banking apps. Purely digital banks are doing well in capturing customers seeking better digital services. Though incumbents still have a major opportunity to join the game and play on par, through digital transformation and innovation of their offering. They also benefit from a high level of established trust with customers and unmatched breadth of services offered.

For more insights, please read our full Opinion Paper. For help addressing any of the questions raised in this paper, please reach out to your Visa Account Executive to schedule time with our Visa Consulting & Analytics team, email VCA@Visa.com or visit us at Visa.com/VCA.

All brand names, logos and/or trademarks are the property of their respective owners, are used for identification purposes only, and do not necessarily imply product endorsement or affiliation with Visa.

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