Saudi customers opt for new banks on superior customer service, digital experience: BCG

A new research conducted by Boston Consulting Group (BCG) about the behavioral changes in customers in the Saudi banking sector have shed light on interesting findings, Mustafa Bosca, Managing Director and Partner at BCG, told Argaam in an exclusive.

The research finds out that excellent customer service, a respected brand, and flawless digital experiences are the main factors that push an increasing number of customers opt for new banks and suggest them to friends and family.

More interestingly, 89% of those surveyed are prepared to open an account with a branchless digital-only bank.

On the other hand, limited product selection and poor customer service – even more so in the affluent segment – make around 32% change whom they bank with in the past 12 months, Bosca added.

Moreover, it is essential that banks appreciate the underlying need to begin upgrading their services across channels, or the very least, consider how exactly they will do so, he noted.

Here’s the full interview:

Q: BCG recently researched the preferences of Saudi banking customers. Could you elaborate on the key findings now that the analysis process has been completed?

A: A few of the key highlights were that 66% of Saudi respondents actively search for new offers provided by banks. However, 56% expressed that they struggle to identify differentiation between the majority of banks. More interestingly, 89% of the respondents are prepared to open an account with a branchless digital-only bank.

While these figures illustrate the changes in customer preference, our research also shows the changes that have already occurred. For instance, 53% insisted they would be happy to switch to a new bank, while 20% have already done so in the past year alone.

It is also noteworthy that out of those who have changed banks, 32% cited a lack of products that meet their requirements as the reason behind their decision, while 30% attributed it to poor customer service.

Q: How many respondents participated in the study? Were you able to establish the main factors behind the attrition that has transpired in recent times?

A: To understand evolving consumer sentiments and banking behaviors, we surveyed more than 2,000 respondents in Saudi Arabia. Of course, BCG has pointed out its research findings, but establishing the reason behind attrition also formed part of its objective.

As per the research, limited product selection and poor customer service – even more so in the affluent segment – make around 32% change whom they bank with in the past 12 months.

Q: Higher numbers of banking customers are recommending or choosing new banks. What are the primary reasons behind this increasingly common behavior?

A: The increasing number of customers opting for new banks and suggesting them to friends and family emphasizes that multiple reasons are driving this trend. Saudi banking customers attributed excellent customer service, a respected brand, and flawless digital experiences as the main factors.

In today’s digital era, customers have high expectations and demands, especially regarding the functioning capabilities of digital channels. Many clients now prefer acquiring products and services quickly and conveniently, without visiting a branch. This was reflected with 89% of respondents expressing they would be prepared to set up a bank account with a branchless institution.

Q: Did Saudi respondents provide feedback or recommendations concerning how traditional banking channels could be improved to remain competitive?

A: The findings were very insightful in several respects. Besides providing insights into changing consumer behaviors, respondents also expressed their opinions concerning how traditional banks and their channels can be improved.

A vast majority identified telephone banking, branches, and ATM services as areas that can be strengthened, which might inspire banks to act now so that they can remain competitive moving forward.

Q: In your opinion, what steps should banking institutions take to ensure they retain customers and provide greater convenience in the evolving digital landscape?

A: It is highly unlikely that the behavioral trends identified through BCG findings will subside. In fact, they are almost certain to continue evolving. As such, it is essential that banks appreciate the underlying need to begin upgrading their services across channels, or the very least, consider how exactly they will do so.

From a traditional bank perspective, this revolves more around managing the omnichannel experience consistently, rather than focusing entirely on digital investment. They should also bear in mind that branches and personal visits remain a fundamental aspect of the banking industry, which is certainly encouraging.

Q: What are the key features that Saudi customers are seeking from digital banks?

A: Saudi banking customers seek digital banks that provide ease, simplicity, and convenience through world-class customer service and seamless digital experiences. More and more customers desire personalized offers and wish to purchase products and complete transactions from any location, irrespective of the time of day - something that digital banks can easily accommodate.