It is a global truism more consumers would prefer to conduct banking tasks and applications digitally than actually do so – this is the ‘Digital Reality Gap’. Banks and consumers are well aware of it. The difference between the two scenarios is effectively the opportunity an institution has to shift distribution to a less cost-heavy model.
"Consumers often switch between phone, digital and physical channels. Yet, the only channel to be a net beneficiary of all this switching was… the branch of course!"
Alan Shields, Managing Director, Research and Advisory, RFi
Balancing the Digital Reality Gap
Encumbered as banks are by large branches and legacy systems, with all the associated fixed costs, this digital reality gap is particularly frustrating. In fact, across the six developed Asia-Pacific markets we studied in our Global Retail Banking Distribution Report, involving 26,000 interviews with retail banking customers across 13 markets, the ‘Digital Reality Gap’ ranged from 13 per cent to as high as 25 per cent. Put another way, banks from Australia or Taiwan, for example, have the opportunity to shift between one in seven to one in four application interactions to a digital channel.
Our study delved into the challenges faced by banks in juggling traditional channels with the emergence and maturity of digital channels.