Indian users still prefer physical banking over digital services: Study
Despite the rising popularity of digital banking in India, about 78% of consumers from different age groups still prefer having bank branches in their neighborhoods, new report shows. These physical branches are seen as symbols of stability and accessibility, with 70% of respondents relying on them for help with specific and complicated financial matters.
Accenture’s Global Banking Consumer Study recommends that bank branches should adapt to the changing environment by transforming into advisory centres. The focus should be on providing a personalised experience with a digital-first approach.
The study found that consumers' relationships with their banks were becoming more transactional and impersonal. Over 60% of respondents admitted that they primarily used mobile banking logins to check account balances. Customer service satisfaction with their main banks was rated as excellent by only 42% of respondents, and more than half (54%) experienced difficulties in accessing human support when needed.
Moreover, about 88% of Indian consumers had obtained financial services products from providers other than their primary bank, indicating a growing inclination towards seeking alternative options. The study emphasised the importance for banks to address these factors that push customers away to retain their loyalty.
Sonali Kulkarni, Lead Financial Services at Accenture in India said, “Banks in India have achieved significant digital penetration across their value chain. But they are now faced with the reality that digital channels are functionally correct but emotionally devoid. Banks need to bridge this divide by humanising and personalising digital transactions. They must leverage data and artificial intelligence (AI) to go beyond processing demographic and financial information about customers.”
The survey also highlighted challenges faced by consumers, particularly among younger age groups, in managing multiple financial service providers. Over half of the respondents (53%) admitted losing track of their financial products and services, indicating a need for a single, aggregated view.
To tackle these challenges and strengthen customer connections, the report recommends leveraging artificial intelligence, data analytics, and a digital-first approach to better understand customers' financial intents and provide more personalised interactions.
According to the report, implementing these strategies could potentially boost revenues from primary customers by up to 20%, which could mean nearly $400 per customer annually, depending on the market.
In February, a separate report by Global Market Insights revealed that the global Artificial Intelligence in the banking, financial services and insurance (BFSI) market was valued at $20 billion in 2022. It is projected to grow at a CAGR of 20% from 2023 to 2032 due to increasing investments in AI solutions and services in the BFSI sector.
On June 6, the State Bank of India (SBI) announced its plans to leverage artificial intelligence (AI), machine learning (ML), and business analytics to enhance decision-making and operations. The bank intends to deploy a NextGen Data Warehouse and Data Lake and explore partnerships with fintech and non-banking financial companies (NBFC) for co-lending.