The 2019 State of Digital Sales in Banking report, created for the fourth consecutive year by Avoka, (now part of Temenos), has shown up some impressive results. The report evaluates the capability that financial institutions have, for taking up a new business with online and mobile sales strategies.

The study measured the sales readiness of 60 large and mid-size banks in North America, Europe, and Australia, alongside some small and mid-sized banks in the US. This was done mainly for comparison by the size of the organization.

Today, it is possible to buy everything with just a click or a tap on a screen. With increasing numbers of customers getting onboard mobile and digital banking, it has become even more crucial to have the best UI and easy navigation, to ensure success. There is a vast scope for improvement in this customer facing digitization in the banking industry. The advantage there is, the brands that create a differentiator right now, will get much better traction from the market in the days to come.

 The report that directly examined the respondent bankers’ websites and mobile banking apps to study easy navigability and operability based on evaluation against specific parameters. For this purpose, they used Avoka’s Transaction Effort Score methodology which, by the way, is pending patent.

The 2019 research has some exciting findings. These are encouraging but also ring some alarm bells:

  • The largest US banks lead the world in digital sales adoption for Personal Banking
  • These banks are up to 75% mobile-enabled.
  • For digital account opening ability, there is only a 10% difference between mobile and digital desktop provision
  • There is not much of skew between the large and smaller banks in terms of Mobile account opening capabilities
  • Large and small banks outrank mid-market organizations ($75B+) by a factor of 5x.
  • 76% of larger financial institutions globally, offer digital account opening for personal banking deposit accounts  

The most significant points that this report has brought out are:

  • 65% of Banks Have Reached the Digital Objective

The 2019 Retail Banking Trends and Predictions report has found that 50% of the banks placed their objective of a “customer-centric perspective and elimination of friction from the customer journey” on top. A considerable amount of money has been invested in the digital transformation of banks over the last five years, and with 65% having reached their objective, the journey has been worth it. Besides,  81% of them are in the process of starting or through their digital transformation strategy; hence there are expectations for this number to increase over next year.

  • Business Banking Transformation Lags

While personal banking is mostly digitized, business banking in seriously lagging –only 37%.  In 2017, the report found, only 6 of the 30 top banks offering business banking services in the U.S. The fact that they owned 30% of deposits, creates a massive opportunity for banks to follow up on this shortfall and make more money. In the US alone, small business lending is a $700 billion market, so this could be a significant first-mover opportunity for digital transformation using an increase in business.

  •    FinTechs Disrupt Wealth Management  

The biggest disruptors have been FinTech companies, mainly in the Wealth management sector, with several apps like Robinhood in the market. These apps offer smooth account opening and investing experiences via mobile devices. The next step for traditional wealth management organizations is to keep pace with the rest of the industry, for which they must adopt a digital transformation strategy. Their objective needs to be – making customer onboarding as seamless as the Fintech counterparts.

  • Digital and Mobile Gap Continues to Shrink

In 2017, digital account opening was largely computer-aided exercise. Only about 50% of those products were mobile device applications. In 2019, this number is 90%. In 2017, mobile traffic exceeded desktop for a share of all web visits; it’s time for banks to focus on mobile apps in their digital transformation plans going ahead.

  • Tremendous Opportunity for Digital Transformation in Personal Banking Across Europe

In terms of countries:

  • North America exceeded Australia this year in total personal banking digital account opening,
  • Europe’s private banking digital transformation remained completely flat year over year – perhaps because a full-scale digital transformation could take five years and cost upwards of $1 Billion.
  • The cost of lost customers and future revenue should be the driving factor for European banks
  • European banks invested roughly $80 Billion in technology in 2018; we would have expected a much higher increase in 2019.