The digital edge
By 2015, the user base is likely to touch 350 million, thanks to cheaper technology and increased investment in 3G and 4G infrastructure. Digital high-value consumers will number nearly 70 million. They will drive up the opportunities for financial institutions, whose revenue pool will likely grow at 20-30% CAGR—$60 billion to $70 billion by 2020. This is twice as fast as financial institutions’ overall revenue pools, and estimated to account for approximately 20% of incremental growth until 2020. FIs cannot, however, expect to satisfy changing customer preferences through simply adjusting existing business and service models. They can only create value and increase operating profits through innovation and change.
Less than 0.5% of internet users searching for financial services actually progress online through the various stages of research, product selection, purchase and online activation. Three factors drive customer drop-offs: poor virtual experience, lack of a differentiated product proposition, and customers’ security concerns. Recognising and addressing these challenges can help FIs to better serve online customers and capture the digital opportunity.
For success in the digital environment, FIs need to
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