Banks are undervaluing their greatest asset – their customers

A new white paper from leading European payments company Nexi says that banks are consistently undervaluing their most precious asset – their customers.

Banks are undervaluing their greatest asset

By leveraging digital payments, banks can differentiate themselves from their competitors, be more attentive to their customer needs and create meaningful and profitable relationships with those customers.

Nexi Group’s new white paper, “Customers are a bank’s most precious asset. Are you sure you’ve already captured all their value?”, explains why retail banking in Europe stands at a crossroads – and what to do to improve customer relationships and generate higher value.

After remaining flat between 2010 and 2020, return on equity in banking has only just begun to recover slightly^[1].

Meanwhile, established retail banks around Europe face tough competition from fintechs, Non-Bank Financial Institutions and big tech players, leading some consultants to predict^[2] that as many as 8 in 10 banks could become “irrelevant” by 2030.

In this context, while traditional banks want to defend and grow their existing customer base – especially for higher-value, long-term customers – digital-first insurgents such as Revolut, Monzo or N26 want to attract new customers by doing things differently, positioning themselves as branchless players that offer frictionless and tech-enabled banking services or linking up with retailers.

The white paper argues that, notwithstanding improvements brought about by new technologies, European banks of all kinds have yet to capture the opportunity of fully engaging with their customers.

How can banks make their voice heard in an increasingly overcrowded market?

The secret lies in identifying new ways to engage customers by putting them at the centre, developing a deep knowledge of them in order to be able to be on their side throughout their everyday lives and provide genuine value.

According to Nexi the rise of digital payments offers a greater opportunity: to foster loyalty by forging meaningful and valuable relationships with existing and new customers, anticipating their needs and delivering personalized, relevant content and products which meet those needs.

Indeed, digital payments represent the perfect means for banks to improve customer relationships, since they are present in our daily lives, frequently used and bi-directional, providing lots of insightful data about customer needs, behaviours, passions and enabling contextual interactions between the bank and the end user.

The white paper sets out why CVM based on digital payments is a powerful strategy for customer engagement.

Consisting in a set of integrated tools and solutions that dive deep into usage patterns for digital transactions to identify how, why and where customers derive value from the relationship with their banks, and how this value can be enhanced to build long-term loyalty, increase customer use of a bank’s products and create greater value for the bank.

Download the new white paper from Nexi Group to find out how your bank could improve customer loyalty and product usage, enhance relationships and generate greater value leveraging on digital payments. 

[1] McKinsey & Co, 1 December 2022, “Global Banking Annual Review”

[2] Gartner, 29 October 2018: “Digitalization to Make Heritage Firms Irrelevant by 2030”