The joint report titled Beyond Fintech: A pragmatic assessment of disruptive potential in financial services found fintechs and technology firms, not banks, were “setting the standard” for customers.
“Experiences with non-incumbents are raising the bar for banks, as customers expect more value-driven, personalised and seamless service than before,” the report said.
“Incumbent banks, focused on recapitalising their post-crisis balance sheets, are playing catch up.”
Rob Galaski, report co-author and Deloitte Canada head of financial services, said fintechs had paved the way for disruption in the industry.
“Fintechs have changed the pace of innovation and reshaped customer expectations across the financial services ecosystem,” he said.
“They have laid the foundation for future disruption in the industry and been successful in changing the basis of competition.”
However, he also warned incumbents would not be far behind.
“This, together with the increasing pace of technology means that incumbents have the potential to improve rapidly – but also face rapid disruption ahead,” Mr Galaski said.
Supporting evidence of fintechs setting the bar for banking experience was client and customers’ increasing use of mobile platforms to do their banking.
“Customers are also becoming more trusting of digital channels when conducting monetary transactions, as illustrated by the rise of global shopping,” the report said.
Engagement with popular apps outside the financial services was also shaping customers’ expectations of user experience.
“Customers now demand the same immediate access, frictionless experience and low-fee or free offerings from their mobile banking apps as they receive from Uber, Starbucks and other leading mobile applications,” the report said.
This, in turn, was “forcing banks to learn lessons from outside the banking ecosystem”.
Incumbent banks’ axing of in-person customer service costs was causing these banking institutions to look at other ways of engaging customers, the report said.