Corporate Banking Customer Satisfaction Survey 2010 - in Financial Services ... 2 Corporate Banking Customer Satisfaction Survey 2010 ... Corporate Banking Customer Satisfaction Survey 2010

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  • Market intelligence report - November 2010

    Market intelligence report October 2010

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    Corporate Banking Customer Satisfaction Survey 2010

  • Market intelligence report - October 2010

    BackgroundLast year Finextra and Pegasystems conducted a survey of banks and corporates focusing on the inefficiencies both sides faced in account opening and client on-boarding, and the adoption of an electronic bank account management (EBAM) standard.

    Feedback on the EBAM report at Sibos in Hong Kong was positive, and many banks found the survey report useful in building their own business cases for investment and benchmarking their efforts against their peers. But feedback since has indicated an interest in extending the scope of the survey this year to look at account maintenance, inquiry and request management, customer service satisfaction and corporate clients switching.

    Providing a positive on-boarding experience gives a customer a good first impression. But if banks cant maintain their clients, keep them happy and extend their business with them, there is no point. So thats why weve chosen to extend the theme this year into a more holistic survey that touches on some of the hottest topics in corporate banking these days customer service.

    In July and August 2010, Finextra and Pegasystems surveyed corporate treasuries and banks worldwide receiving 61 survey responses from 38 banks, and 37 from corporates, for a total of 98 respondents.

    Pegasystems in Financial ServicesPegasystems has been providing business solutions to the financial services industry for more than 27 years. Leading banks and financial services institutions work with Pegasystems to provide solutions for payment

    investigations and SWIFT E&I, client on-boarding and electronic bank account management (EBAM), client inquiry and request management, CRM, know your customer (KYC) and sanctions management. Pegasystems solutions are used by ten of the top ten global banks, and seven of the top ten credit card issuers. Pegasystems technology also supports 60% of the worlds payment investigations. Headquartered in Cambridge, MA, Pegasystems has offices in North America, Europe and Asia.

    Visit us at www.pega.com

    About FinextraFinextra Research is the leading newswire and online community for the global financial technology industry, with 3 million page views and 110,000 unique visitors per month. More than 26,000 financial technology professionals worldwide receive our free daily and weekly e-mail newsletters. Finextra additionally operates its own annual conference and exhibition for the capital markets industry, Finexpo, and collaborates with the Euro Banking Association to produce the annual pan- European payments conference EBAday. Finextra is also the official online news partner for Swifts annual financial technology conference Sibos.

    Finextra additionally hosts an online professional networking and blogging service for the global financial technology industry.

    www.finextra.com/community

    2 Corporate Banking Customer Satisfaction Survey 2010 2010 Finextra Research Ltd. 2010

  • Market intelligence report - November 2010

    Executive summaryKey findings from the survey were:

    The competition is hotting up to attract and retain increasingly sophisticated corporate clients. But its not simply about the fees anymore. More corporates are willing to pay higher fees for better client service:

    62% of corporates said they would consider switching to a different bank for better customer service around on-boarding, account maintenance and query handling (up from 44% last year). 57% have increased business with one or more of their banks within the past 12 months. Quicker turnaround time for requests and enquiries and better access to service and information channels were the primary reasons. 57% said they would be willing to pay higher fees for a sophisticated web portal that enabled them to manage their entire portfolio through the web and 46% would pay higher fees for a consistent client service across lines of business, regions and channels.

    Banks are missing a key back to basics message from corporate clients that consider service levels and ease of access to channels as being far more important than product innovation:

    For corporates, ease of access to service and information channels was considered the number one criteria for selecting a bank. But only 18% of banks saw this as their best selling point, highlighting an opportunity for other banks to increase their capabilities and marketing in this area. 63% of banks say they have lost corporate business due to inadequate products and services. But of the 35% of corporates to have decreased business with one or more bank in the past 12 months, none gave this as a reason.

    Inconsistent customer service across channels, regions and lines of business; and poor access to service and information channels were the two most common reasons corporates decreased business with a bank.

    But more banks are investing in automating client on-boarding, inquiry management and channels, and they expect to see a healthy return on their investment:

    Investment by banks to improve and automate on-boarding and service processes has increased dramatically. In a similar survey last July-August (http://www.pega.com/content/summary.asp?ci=494) we found 26% of banks budgeted for this in 2009, and that only 21% had already committed money in this area for 2010. But when budgets were allocated and investments prioritised in 2010, on-boarding and service processes were deemed to be more import to the business than previously thought. This year we found that 64% of banks actually invested in this area in 2010. And a massive 84% of banks say they will spend money in this area in 2011.

    When asked where their client service improvement budget was most likely to be spent, the top three areas were: on-boarding process automation (42%); end-to-end enquiry management system (21%); and a sophisticated corporate portal (21%).

    When banks were asked about their operational costs associated with on-boarding and customer service and what kind of cost reduction they think is possible from better automation, 44% said they could save more than 30%.

    Corporate Banking Customer Satisfaction Survey 2010 Finextra Research Ltd. 2010 3

  • Market intelligence report - October 2010

    Corporates will pay for better service and change banks to find it

    The period of time immediately following the sale is critical to the long-term profitability of a customer. It is during this on-boarding period that process challenges often appear that can delay time to revenue, generate customer satisfaction issues and decrease share of wallet.

    In last years survey we looked at the impact of on-boarding inefficiencies in the corporate/bank relationship. We asked whether corporates would consider switching to a different bank for better customer service around on-boarding, account maintenance and query handling and found that 44% would.

    This year we have extended our study to go beyond initial on-boarding processes and into the customer service operation that has to repair and maintain the long-term customer relationship. But again we asked how many corporates would switch banks for better service, and found this year that 68% would consider it.

    But switching does not necessarily entail finding a brand new bank to service a corporates needs, it can often take the form of increasing or decreasing their portfolio with their existing banks.

    Our survey found that 56.8% of corporates have increased business with one or more bank in the past 12 months.

    Of those, 48% said the value of the business increase was in the 11%-20% range. But 39% said they had increased the value of their business with one or more banks by more than 30%

    Interestingly, the main reasons that banks got more business from their corporate customers were: quick turnaround time for requests and enquiries (52%); ease of access to service and information (channels) (48%); and consistent customer service across channels, regions and lines of business (43%).

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    Corporates: Would you consider switching to a different bank for better customer service around on-boarding, account maintenance and query handling?

    YES

    NO68%

    32%

    0.0 0.1 0.2 0.3 0.4 0.5 0.6

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    0.0 0.1 0.2 0.3 0.4 0.5 0.6 0.7 0.8

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    0.0 0.1 0.2 0.3 0.4 0.5

    0.0 0.2 0.4 0.6 0.8 1.0

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    Corporates: Reason for increased business with bank

    Quick turnaround time for requests and enquiries

    Ease of access to service and information (channels)

    Consistent customer service across channels, regions and lines of business

    Geographic coverage and reach

    Interest rates and fees

    Innovative and adequate products & services

    Financial stability/strength

    52%48%

    43%29%29%

    19%10%

    4 Corporate Banking Customer Satisfaction Survey 2010 Finextra Research Ltd. 2010

  • Market intelligence report - November 2010

    Interest rates and fees were considered less important reasons than a banks ability to use technology well to serve its clients.

    This may stem from increased expectations of consumer technology that has become increasingly easy to use. These expectations have spread to the corporat

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