Ernst & Young is an international group providing professional consulting and auditing services. In their latest report, they highlight the declining importance of banks. The global banking industry is facing new challenges, including from distributed alternatives to banking services such as cryptocurrencies. Ernst & Young is an international firm providing professional advisory and audit services. In their latest report, they highlight the declining importance of banks. The global banking industry is facing new challenges, including from distributed alternatives to banking services such as cryptocurrencies. 12 percent of consumers in Hong Kong and 6 percent in Singapore already identify non-traditional banks as their primary financial services provider. The BRI is an index of bank importance created as part of the 2016 Global Consumer Banking Relevance campaign. The latest survey was conducted on 55867 bank customers, from 32 different countries. The study measures the impact of the market and trends shaping banking and outlines the direction banks need to take to make their future sustainable. Ernst & Young highlighted two main aspects: ● How customers currently use banks: what is the role of the main provider of financial services and products that customers currently use ● How customers intend to use banks in the future: the combination of consumer confidence consumers about banks and the products and services that customers are considering buying from banks in the future. The maximum BRI value (100) indicates that customers regard banks as their main provider of financial services, fully trust banks, and turn to banks for financial advice and new products and services. A minimum value (0), on the other hand, means that consumers, in all aspects of their financial lives, use only services completely unrelated to banks. The average index for banks worldwide was 75.1. The Scandinavian region has the highest bank importance score and is above the global average. Finland is at the top with a score of 82.7. Germany and Switzerland also have a high BRI score, and they have a higher confidence index in traditional banks than the other countries. Indonesia (66.9), China (69.5) and India (71.1) have the lowest scores, likely due to the prevalence of mobile services and non-traditional banking, and the expansion of the unbanked portion of the population. EY BRI: Average importance of banks by country EY says that although most consumers still tie mortgages, personal and savings accounts, loans and credit cards to banks, about half of all consumers would consider using non-traditional banking services in the future. EY: Current and projected future consumer use of non-banking services. Until thirty years ago, banks had little or no competition in providing financial services and advice. Today, many services have emerged to compete with traditional banking and confidence in the banking sector has declined. The EY report lists four main reasons for the decline of banks: ● Rapidly changing customer preferences and expectations, The emergence of easy-to-use FinTech products and alternatives to traditional banking, ● Banks not keeping up with meeting customer expectations, the evolution of digital services, the era of easily accessible information and personalized products, ● Industry scandals have eroded trust in banks from financial stability, to putting profits above customer welfare. Differences across countries mark the priorities of action for banks. In Spain, Greece and Italy, for example, the main focus should be on trust, while in India, Mexico and Brazil, deepening customer relationships and reaching the unbanked segment of the population is key. In southern Africa and Nigeria, research shows that despite higher levels of trust, customers are not using traditional banks to purchase new goods and services. To reverse the trends, banks should nurture customer satisfaction by listening to their needs. Banking products should be convenient, easy to use and understand. Banks should incorporate real-time service. Access to all products and services, should be open at any time. Here cryptocurrencies come to mind immediately, available and reliable 24 hours a day. "Only by understanding customers' needs and their expectations for convenience, simplicity and transparency can banks combat their declining relevance " reads the report. Among the main factors banks should pay attention to in order to reverse the decline is trust. Trust and transparency in the face of the global crisis is something that banks are likely to rebuild quickly.
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