A report from the Capgemini Research Institute has revealed a “critical shortcoming” when it comes to how retail banks attract digital native customers between the ages of 18-45 years old.
The Capgemini World Retail Banking Report 2025, published today, found that 73% of credit card customers are demanding more benefits, such as rewards and cashback offers, with three-quarters of respondents indifferent or dissatisfied with their card experience from their retail bank.
These findings may come as no surprise, as the proliferation of digital-first banks – or neobanks – such as Revolut, Monzo and Starling in the UK, are providing next-generation technological solutions, card and savings preferences that appeal more to 18-45 year olds.
A more personalised card and banking experience is now becoming a critical aspect for a majority of customers, as they are more aligned with the development of digital-first solutions.
The World Retail Banking Report 2025 emphasised this, with up to 88% of industry executives acknowledging that expanding their reward systems is the most effective way to boost customer engagement.
Despite recognising the need for more personalisation, not all reward programs are fulfilling satisfaction with customers. Only 26% of cardholders are currently satisfied with their cards, 50% are indifferent, and 24% are dissatisfied.
Banks’ marketing teams cite intense competition from new-age banks and other card providers (83%), ineffective messaging and value propositions (72%), insufficient customer insights (66%) and a complicated application process (34%) as their biggest challenges.
Gareth Wilson, Global Banking Industry Leader at Capgemini, said: “At a time where convenience and personalisation dictate customer expectations, our research highlights the fragile state of cardholder satisfaction.
“Appealing to experience-driven urban consumers requires a culture reset that prioritizes customer centricity at every stage of the card journey – from awareness to onboarding to rewards.
“Contact centers represent the front line of engagement, shaping brand perceptions, yet they remain the industry’s Achilles’ heel. Banks have an opportunity to transform contact centers into intelligent engagement-focused hubs that “wow” customers.”
Another key shortcoming that the report highlights was the onboarding process and why retail banks are missing out on a “significant portion of potential customers, and revenue, simply because the onboarding process fails to meet expectations”.
Almost half (47%) of customers abandon the application process of signing up to a retail bank midway due to a poor user experience. Furthermore, only 3% of banks’ marketing teams consider the onboarding process to be a seamless process.
Capgemini alludes to the progression of implementing AI or Generative AI models in place to accelerate the onboarding process, as well as prioritising digital infrastructure to smoothen this process.
The report also details how contact centres can lay the foundations for building greater customer loyalty and the implementation of real-time solutions.
