Accenture Purpose Driven Banking

PURPOSE-
DRIVEN
BANKING
Can trust create
win-win banking
relationships?
WINNING IN THE DIGITAL ECONOMY SERIES

THE PURPOSE-DRIVEN TRUST OPPORTUNITY
EXECUTIVE SUMMARY
• 5% of retail banks’ revenue comes from hidden or obscure fees or
those relating to customers’ poor financial behavior.
• This income is at risk as regulators and new digital competitors move in
to increase transparency and help consumers.
• Banks that authentically and consistently put customers first
—even when it’s not to their immediate advantage—will gain trust.
• To achieve this they should address two strategic pillars:
- Immediately transform the core business for efficiency
and enhanced customer understanding to grow market
share.
- Start planning a steady shift to expand the scope of
financial advice, creating new revenue streams.
• These steps, plus an improvement in customer trust, could increase
incumbents’ revenue by 9%.
Accenture’s Purpose-Driven
Banking survey polled 14,900
consumers, in 12 markets,
on their banking habits
and attitudes.
We also analyzed banks’
revenue in these markets,
and calculated they could
boost their annual income by
an average 9% by taking a
specific set of strategic actions
designed to enhance customer
trust and create new
revenue streams.
5%
Copyright © 2020 Accenture. All rights reserved.
2
• From this foundation, banks can offer new personalized advisory
services that benefit customers’ financial well-being and create new
revenue streams for themselves.

TRUST IN BANKS HAS
WANED OVER THE YEARS
An accumulation of factors has
fueled customer skepticism
This has led to…
‘80s profit maximization Increased regulation
Banks need to restore
customer trust
To develop and sell
credible trust-based
advisory services
To differentiate themselves
as truly putting the
customer first
To nurture customer affinity
and grow revenue
‘90s remote transactions Aggressive neobank
innovation
2008 financial crisis Tech-giant advances into
financial services
Mis-selling scandals Poor revenue-growth return on
banks’ digital investments
3

THERE IS AMPLE POTENTIAL FOR BANKS
TO INCREASE CUSTOMER TRUST
• Consumers trust banks to protect their data and
process their transactions, but are less confident
about banks looking after their long-term financial
well-being.
• Most are skeptical banks will always put their
interests ahead of profit.
• Neobanks are growing market share
by promising to always put
customers first.
• They offer features that help
customers manage their finances
more effectively.
4
Banks’ opportunity to grow consumer trust
Q. To what extent do you trust the following providers?
A. A lot.
Main bank Main
insurance
provider
Online
payments
companies
Tech/telecoms
online service
providers
Large
retailers
Social
network
providers
51 43 3240 2334
1218 1116 914
Trust with your data
Trust with your long-term
financial well-being
Source: Accenture Global Financial Services Consumer Study, 2019

WITH MONEY
• This income is now at risk as new
digital competitors and regulators move
to assist consumers.
• The potential market for practical, trusted
financial advice is large and growing –
almost 2 out of 3 consumers seek it.
THREE REASONS WHY FINANCIAL ADVICE NEEDS TO BE DIFFERENT:
• Banks could help customers
minimize the avoidable fees that
make up 5% of their revenue.
42%
find it challenging to
manage their money, mainly
because they lack financial
information and are confused
by complex rules.
only 25%
have enough savings
to cover six months of
living expenses.
only 29%
are net savers (spend
less than they earn).
28%
of people do not optimize
the amount of taxes paid.
32%
do not have sufficient
savings to fulfill long-term
financial goals (e.g. for
retirement, buying
property etc.).
1 MOST PEOPLE STRUGGLE
Source: Accenture Purpose-Driven Banking Consumer Survey, 2020
5
51-60%
of consumers who went through
divorce, job loss or death of a
loved one were unprepared for
the financial impact.

• Only 1 in 2 consumers seek help in dealing with
the financial implications of a key life event.
• Of those who do, fewer than 1 in 3 reach out to
their bank.
• This indicates a big opportunity for banks to offer
new advisory products.
• It has the potential of building customer trust while
creating new revenue streams.
2 CONSUMERS SELDOM
SEEK HELP FROM BANKS
6
Source: Accenture Purpose-Driven Banking Consumer Survey, 2020
Numbers in %
Sought help
Don’t know
Did not
seek help
Friends / family
My bank
Online (e.g. forums, blogs,
social media etc.)
Work colleagues
Other
A financial advisor
An independent expert,
excluding a financial advisor
Clubs / communities
All respondents who
went through at least one
financially impactful life
event in the past 5 years
Q. Did you seek help in dealing with the financial implications of
a major life event? If so, to whom did you turn?
44
56
28
25
21
19
19
15
11
51
5

ADVICE ARE UNDERSERVED
• There are 2.2 billion consumers who need financial advice, could afford it, but aren’t getting it.
• Banks are most likely to appeal to the “Neglected Middle” with efficient, trusted advisory services.
3 THOSE WHO MOST NEED
>5 BILLION
ADULTS
WORLDWIDE
1.7 BILLION
adults worth $10k - $100k have the
greatest need for financial advice
THE 'NEGLECTED MIDDLE'
2.9 BILLION
adults worth <$10k cannot
afford bank advisory services
2.2 BILLION
adults worth $10k - $1m are
underserved by financial advice
47 MILLION
adults with net worth of >$1m are
well served by financial advisors
Source: Credit Suisse Research Global Wealth Report 2019
7

DON’T CONFUSE
ENGAGEMENT WITH TRUST
Half of all mobile banking
users worldwide log in at
least once a week.
Accenture Global Financial Services
Consumer Study 2019
TRANSACTIONAL BANK ENGAGEMENT
AND FEATURES ARE ON THE RISE
BUT THESE DON’T NECESSARILY BUILD EMOTIONAL
AND ADVISORY RELATIONSHIPS WITH CUSTOMERS
42%
of consumers say they use
their bank’s mobile app
more now than they did
12 months ago.
The Financial Brand, 2018.
47%
agree it’s critical or very
important for banks to treat
them as human, not just
as a customer.
31%
agree it’s critical or very
important for banks to
reduce stress in their life.
Factors influencing consumers’ choice of their main current
account provider:
Source: Accenture Interactive Banking HX Survey 2019
8

5% OF REVENUE IS AT RISK AS REGULATORS
AND NEOBANKS TARGET ‘BAD REVENUE’
Potential improvements in customers’
financial habits (borrowing and saving)
Source: Accenture Research analysis
Potential loss of traditional banks’ retail revenue
Numbers in %
±1
average = 5%
Australia Hong Kong
SAR of China
Spain USA Canada Italy Germany Brazil Sweden France JapanUK
7-9
6-8
Due to: Regulatory and competitive pressures
6-7 6-7 6-7
5-6
4-5 4-5 4-5
3-4 3-4
US, UK, Australia and Canada
High dependency on credit card debt
and high exposure to fees attacked by
challenger players: FX fees and cross-
border consumer payment fees.
France, Germany, Italy and Spain
Generally low dependence on credit
card debt. Low interest rates also reduce
negative effects of customers switching
to interest-bearing savings accounts.
All revenue threats relate to payment
and account fees.
Japan
Retail overdrafts are rare and credit
cards are issued by non-banks.
9

THERE IS A CLEAR POSITIVE RELATIONSHIP
All B2C companies
Banks
Trusted companies achieve higher revenue growth
Annual revenue growth rates (%, 2018 v 2017)
Most-trusted companies* All other companies
6.27.5 8.4 5.5 Source: Accenture Research analysis of S&P
Capital IQ data and Arabesque’s S-Ray Trustscore.
BETWEEN TRUST AND REVENUE GROWTH
Banks that rebuild advisory trust through both growth pillars will generate an added bonus. This ‘trust kicker’ is the potential
revenue uplift achieved by banks that are the most trusted in their markets.
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* Companies within the top 25 percent of the Arabesque S-Ray Trust score.
Note: Analysis of 3,800 banks and other business-to-consumer companies based in 12 countries. The Trust score is calculated as the average of the
quarterly Trust score between 2016 and 2017. Companies with bottom and top 10 percent revenue growth values were excluded from the analysis

WE BELIEVE
BANKS SHOULD
ADOPT TWO SETS
OF STRATEGIC
ACTIONS
SIMULTANEOUSLY
This will help them build trust, attract customers,
and grow through new advice-based offerings
Two sets of actions banks should consider
to create a foundation for customer trust
Two strategic pillars, operating in parallel, to future-proof
both banks and their customers
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PILLAR 2
New trust-based revenue streams
Expand the scope of financial advice,
focusing on meeting consumers’unmet
needs to create new revenue steams.
PILLAR 1
Protect and grow
Immediate changes,
focused on protecting
and growing
market share.
RevenueGrowth
Customer Trust Over Time
Long-term purpose-driven bankingNear-term wins

TRUST-BASED PROPOSITIONS BOOST
INCUMBENT BANKS’ REVENUE BY 9%
UK
Higher opportunities in smart spending
and debt management propositions.
Pillar 2 uplift driven by large base of
“Neglected Middle” customers.
Spain
Higher portion of customers addressable
by and interested in Pillar 1 initiatives.
Hong Kong SAR of China
Pillar 2 uplift driven by large base of
“Neglected Middle” customers. High
trust in Hong Kong banks negates
trust-kicker effect.
Italy
Improvement in low trust levels would
allow for substantial revenue uplift.
Sweden
Lower customer interest in Pillar
1 and 2 initiatives.
average = 9%
AustraliaHong Kong
SAR of
China
Spain USA CanadaItalyGermany Brazil SwedenFranceJapanUK
9-11
8-10 7-9
6-8
5-6 5-6
3-4
10-12 10-12 10-12
Revenue increase for an average retail bank per market
(change over 5 years).
12-15 12-14
Pillar 1: Protect and Grow
Pillar 2: New Trust-Based Revenue Streams
Trust-Kicker Effect
Numbers in %
In most of the markets we analyzed, the increase in trust-based revenue is sufficient
to compensate for revenues at risk. This indicates an attractive business case worthy
of investment.
Source: Accenture Research analysis
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Trust-based propositions boost incumbent banks’ revenue by 9%

PILLAR 1:
PROTECT AND GROW MARKET SHARE
Immediate changes that transform the core business for efficiency and growth, improve customer understanding and
enable more personalized engagement and offerings.
Use behavioral analytics to better
understand customers’ preferences and
provide offerings such as automatic
investment solutions and low-cost
automatic overdraft protection.
Redefine value propositions by
deploying multi-disciplinary teams of
research, marketing, strategy and retail
product specialists to compile and
present holistic solutions.
Go beyond traditional offerings and
expand customer choice by partnering
with third-party providers to serve
customers’ needs from different angles.
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trademarks by Accenture and is not intended to represent or imply the existence of an association between Accenture and the lawful owners of such trademarks.
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PILLAR 2: CREATE TRUST-BASED
REVENUE STREAMS
Capitalize on the trust developed in Pillar 1 to grow revenue by expanding the scope of financial advice.
• Stand-alone and impartial, without
necessarily leading to product sales.
• Able to identify what is best
for customers. A comparison of offerings
should yield the best-value option, even
if it means recommending another
provider’s products.
• Strong enough to challenge the classic
banking orthodoxy that advice cannot be
profitable when provided to all customers.
FIND THE RIGHT ADVISORY MODEL
AND PROPOSITIONS
OPEN UP NEW REVENUE STREAMS
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55% of consumers would be willing
to pay for additional bank services
that were of value to them

PILLAR 2: THREE ADVISORY
PROPOSITIONS TO CONSIDER
We believe there are at least three distinct advisory propositions that are worth exploring:
1 2 3
DIGITAL FINANCIAL HELPER
Uses tools like AI assistants
to improve customers’
financial literacy.
ONLINE ADVISOR
Provides personalized customer
recommendations regularly
or constantly.
FINANCIAL WELLNESS VISIT
Human-led, supported by robo-
advisors, providing personalized
recommendations affordably, at
scale, a few times a year.
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1. A BEHAVIOR-INFLUENCING DIGITAL EXPERIENCE
Engaging tools and interactions that offer the right navigation, tone of voice, information content and demonstrated benefit of engagement.
2. A BROADER SET OF KPIs
Benchmarks that align the bank’s organization around its purpose and trust mandate.
3. SMART USE OF TECHNOLOGY AND DATA ENABLERS
Provide contextual insights automatically and intuitively, enticing consumers to turn to the bank first for advice.
4. GO-TO-MARKET PARTNERSHIPS
Collaboration with innovators to capitalize on their data and innovation power to accelerate the introduction of new products and services.
5. A SUSTAINED CORE CULTURAL SHIFT TO BUILDING CUSTOMER TRUST
Deep and authentic changes to propositions, channels, front- and back-office staff, the customer experience and many other areas.
THE 'BENEFITING TOGETHER' MENTALITY:
FIVE KEY SUCCESS FACTORS
There are five key features and capabilities, essential to success across both Pillar 1 and Pillar 2 initiatives,
that banks need to adopt to shift their cultures toward a “benefiting together” mentality.
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GIVE YOUR CUSTOMERS
REASON TO BELIEVE
Despite widespread skepticism, banks can provide good reason to believe they are putting customers’ best interests first.
Prioritize your customers’ financial well-being as your purpose.
Draw on innovative capabilities and tools to implement Pillar 1 initiatives that can
improve efficiency, transparency and customer trust. At the same time, explore Pillar
2 strategies to create new revenue streams based on personalized advice.
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Adopt a data-driven approach to develop and execute trust-building initiatives that
differentiate your business, nurture customer affinity, and grow.

ABOUT THE RESEARCH
Two studies comprised the research activities for this report:
A quantitative customer survey of 14,900 banking customers in 12 countries:
Australia, Brazil, Canada, France, Germany, Hong Kong SAR of China, Japan,
Italy, Sweden, Spain, the UK and the US.
Conducted in November and December 2019, it asked respondents about their
preferences and attitudes on a variety of issues: their relationship with their main
bank, money management, their financial habits, their readiness to deal with the
financial impact of key life events, and their willingness to pay for new
value propositions.
Also, a quantitative analysis of the retail banking revenue pools which, in each of
the 12 countries surveyed, might be defined as “under threat” due to pressure from
digital challengers and regulators, and improvements in customers’ financial habits.
We also analyzed the potential revenue uplift which we expect will result from
the initiatives that we recommended in Pillars 1 and 2.
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THE AUTHORS
ALAN MCINTYRE
Senior Managing Director – Banking
a.mcintyre@accenture.com
JULIAN SKAN
Senior Managing Director – Banking, Europe
julian.skan@accenture.com
KIM KIM OON
Managing Director – Accenture Strategy, Banking
kim.kim.oon@accenture.com
CÉCILE ANDRÉ LERUSTE
Managing Director – Banking, Europe
cecile.andre.leruste@accenture.com
FRANCESCA CAMINITI
Director – Accenture Research, Banking
francesca.caminiti@accenture.com
MAURO CENTONZE
Manager – Accenture Research, Banking
mauro.centonze@accenture.com
CONTRIBUTORS
DARIUSZ ORYNEK
Manager – Accenture Research, Banking
dariusz.orynek@accenture.com
EMILY BURNS
Manager – Accenture Strategy, Banking
emily.h.burns@accenture.com
Register to read the full
survey report:
https://www.accenture.com
/us-en/insights/banking/
purpose-driven-banking-win
-customer-trust

Accenture Purpose Driven Banking

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