Retail banks fail to make the most of sales opportunities, says new Booz Allen global study (page 1 of 4)

The comprehensive study, which used customer research and mystery shopping to assess 100 banks across 17 countries (including 12 banks in the GCC), looked at what customers want from their banks, how banks are performing and best practices to drive profitable growth. Based on the findings of this research, the Booz Allen Revenue Enhancement (BRE) Index was developed, taking into account performance across branches, call centers, online, mobile sales forces and a multi-channel index.

Consumers prefer purchasing in branches, but affluent customers are leading a trend towards online

Despite technological advances, globally customers still prefer banking in branches - 63% choose to use a branch for purchasing current and savings account products and 54% choose their branch to purchase mortgages. The preferences of GCC customers are almost identical to the global average. However, branch importance is in relative decline.

For purchasing less complex products, such as credit cards, globally over half would now use an alternative channel with 21% purchasing online and 16% by telephone. The situation is inverted in the GCC where 18% of customers prefer purchasing by telephone compared to only 11% who preferred purchasing online. Globally, online channel usage is rising and is preferred over phone, particularly for simple products and transactions; however, this is taking place at a slower pace in the GCC. The trend away from the branch is being led by affluent consumers, who tend to be time poor and are 30% more likely to prefer using online services.

"The branch is declining in importance, but banks are failing to capitalize on the enormous potential of key growth channels such as online and mobile sales forces, because the performance of these channels does not meet customer needs and expectations," said London based Booz Allen vice president Alan Gemes.

Retail banks are performing best in branches and online, but call centers and mobile sales forces do not meet key requirements.

Across all channels there is a significant difference between the performance of the best banks, which show near excellent service, and the rest of the pack. The top performing GCC banks achieved the highest scores at near the global average, across most channels; whereas, the remaining banks had a wide performance variation across the various channels. The study found that the need for differentiated offerings for affluent customers was a common theme across all channels. This is particularly important for the GCC where differentiation is limited to branches.

Banks still need to get the basics right in branches - Privacy, staff knowledgeable about products, query resolution and waiting times are the most important criteria for customers in branches. This is particularly relevant for GCC banks whose branch performance - with very few exceptions - scored, on average, 20% less than the global average.

"For many customers in the GCC, the branch is the first point of contact, yet many banks fail to get the basics right. Branches are characterized by long queues, poor parking facilities, and low levels of customer service,"

said Beirut based Booz Allen vice president Peter Vayanos.

Whilst these requirements seem basic, banks still need to work on their consistent delivery.