Indian Retail Banking Industry Still to Adapt Mobile Banking

Despite the impetus provided by demonetization, digital banking is not yet  a pervasive experience in India. The branch continues to dominate banking channels, with 94% of retail banking customers having visited the branch/store at least once in the past 12 months, according to the 2017 Oracle J.D. Power India Retail Banking Study released recently.

The study measures customer satisfaction across urban and rural India on the product and service provided by their main financial institution. The study measures overall satisfaction in five factors: account activities (39%); account information (18%); facility (17%); product offerings (14%); fees (12%). Overall customer satisfaction is measured on a 1,000-point scale.

“Most banking relationships still begin and continue at the branch,” said Gordon Shields, senior director J.D. Power. “However, there is great potential for banks to move more into the digital space. Only 51% of retail banking customers have a reliable online banking experience with their main financial institution".

While overall customer satisfaction with mobile banking is markedly higher (693) than with In-Person Branch interaction (676),  only 9% of India retail banking customers use mobile banking for everyday transactions. It is vital that retail banks ensure that customers feel at ease with using digital banking channels.

“Amongst the 48% of customers who have yet to download a banking app, one-fourth state lack of security is a key reason for non-usage,” said Shields. “The success of digital banking rests clearly on its ability not only to engage with customers but to do so in a secure and trusted manner. Once such concerns are addressed, there is scope for huge improvement on this front. It is essential that content, user experience and security be revisited holistically as opposed to launching digital assets in a piecemeal manner.”

Fundamentally, communication is key to achieving higher customer satisfaction. Nearly three-fourths (73%) of customers believe their financial needs were not fully understood before they were offered new products, with only 7% having had fees and pricing of products explained. A stronger understanding of features and benefits of a main account can increase satisfaction by 100 points, with customers who do not or only partially understand product features (82%) less satisfied (659) than the 18% who completely understand the product features (759).