In a country famous for banks, it seems surprising that only a third of Swiss bank account holders rate customer service as better than average. Is online banking to blame?

According to the latest Global Banking Consumer Study from accenture, a mere 32 percent of Swiss account holders find the customer service at their bank «very good». Has banking become too impersonal in Switzerland because the pendulum has swung too far away from personal interaction to online and mobile banking?

Even worse, only a quarter of respondents to the study are satisfied with the variety of banking offers or the expertise in customized solutions offered by their bank. What must drive bankers crazy is that 59 percent of respondents go to a provider other than their primary bank to expand or complement the services they use. 

Emotionally Empty

One explanation could be the increased use of digitization, which has reduced face-to-face interactions with banks and their clients. Such figures should be cause for concern for banks that have been investing huge sums into digitization, AI, and client bots.

«Our data shows that 44% of customers aged 18 to 44 have difficulty getting personal assistance when they need it. This suggests that digital channels such as online banking, while functionally correct, are emotionally 'empty' and don't help build a personal connection between bank and clientele,» says Daniel Kobler, Leader Financial Services Industry Switzerland.

Customers over the age of 45 have more complex problems and needs, which can be better solved through face-to-face contact than through online banking.

Checking Your Balance

Another sobering statistic for banks looking to increasingly go digital is that 40 percent of Swiss banking clients use a purely digital bank in some form, compared to the global average of just over half. The report also found half of Swiss consumers use their bank's mobile app only to check their account balances. 

Kobler says that in the future, banks need to focus on hybrid advice and servicing instead of exclusively digital or analog customer experiences. This includes providing their customers with personal and situational advice when they are making decisions on major life events such as buying a house or taking a long-delayed trip around the world.

«This requires building a personal connection between the bank and the customer that goes beyond a purely transactional relationship,» he says.

Branch Office Renaissance

Those banks looking to improve their customer service should take note that six out of ten consumers prefer having personal contact with their advisors when issues arise, something that also somewhat surprisingly applies to younger consumers who grew up in a digital age.

More than half said they appreciate their bank having a bank in their vicinity.

 A Willingness to Switch

In September, the Swiss National Bank abandoned the policy of negative interest rates it introduced in 2015 when it was forced to give up its policy of defending the Swiss franc against the euro. Now that banks no longer have to hold balances at the SNB that pay negative interest rates, banks are offering interest rates on deposits, although they vary greatly and are leading to disruption among customers.

One problem is that banks are reluctant to pass on higher interest rates to their savers. In a time of high inflation this «tends to be disruptive to customers,» says Kobler. 

Not offering higher and more competitive rates could prove to be short-sighted, and banks could be missing out on an opportunity to not only retain but gain customer deposits. Not only that, the recent government-forced takeover of Credit Suisse by UBS has unleashed a flood of money looking for a new home.

«We see an increasing willingness among customers to open a savings account or similar at another bank, although the willingness to switch is greater among the younger generations than among older customers, who place a higher value on long-term support and the customer service they are used to than on the interest rate,» Kobler observes.

Is Banking Too Impersonal?

Past attempts at personalizing online banking have often been simplistic and have not helped to better understand the personal circumstances of individual customers or build personal relationships.

Kobler says that banks need to understand their customers' underlying motivations for purchasing a particular financial product, which is the only way they can increase their relevance and effectiveness to their clientele.

«So personal interactions, whether in online banking through real-time updates and recommendations by generative AI or in the branch remain fundamental,» he said.