Wallet Share – The prime focus for retail banks in the 21st Century
Traditionally, market share has been the dominating figure which banks focused on, and as such these institutions centred their operations on new customer acquisition. Despite its substantial status, a large number of financial services are now shifting their focus to a different indicator. Rather than concentrating on the percentage of population a company occupies, the ‘new kid in town’ explores the amount a customer spends with a company and wallet share is what they have named it.
With the financial landscape changing drastically in the past decade, competition has intensified and fierce start ups have posed threats to renowned establishments. Technology has been the one to blame, altering the way customers interact with banks, and supplementing the demand for integrated multichannel experiences.
Mobile banking has risen at a staggering rate as it offers convenience to its customers, although it is common to be using the services offered by banks, the number of mobile payment companies has meant consumers are spoilt for choice, once again reducing wallet share for banks. On the contrary, it is important not to forget these new entrants are not as credible as banks.
Does trust mean loyalty? Not necessarily, customers are searching for a product/service to fulfil their needs, and with banks failing to truly understand customer expectations and needs, it has driven the rise of having multiple accounts and personalised services. With such demand, these new start ups are capitalising by offering a more bespoke service matching the needs and desires of the evolving customer.
As this continues, the percentage of wallet for banks is likely to get more diluted. This can be seen as a positive as competition drives innovation, and banks are acquiring and partnering with financial technology companies to add value to their offerings. How can you boost your wallet share?
Learn ways to grow your wallet share at this year’s Asian Banking Forum East Asia 2018. We look forward to seeing you in Hong Kong!
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