Dive Brief:

• Banks are falling short when it comes to credit card experiences, especially among younger, digitally native generations. Three-quarters of customers are currently indifferent or outright dissatisfied with their card experience, according to the Capgemini Research Institute survey of 8,000 digital-native customers aged 18 to 45.
• Nearly three-quarter of credit card customers in this cohort say they are motivated primarily by access to exclusive experiences, rewards and cashback offers.
• Banks “simply do not live up to the expectations of today’s digital-first, millennial and Gen Z customers,” Gareth Wilson, global banking industry leader at Capgemini, said in an email. “These are customers who value experiences that align with their lifestyles and financial goals, yet we find an underlying gap between the transactional and experiential benefits offered by providers.”

Dive Insight:

Dissatisfaction with credit card experiences puts banking loyalty at risk.

Just over half of bank customers say that bad customer experience has made them leave their bank, according to a FICO survey of 1,000 U.S. bank customers. That survey also found that nearly 9 in 10 consumers believe customer experience is as important or more important than a bank’s services or products.

While customer abandonment is a real risk, banks are also concerned about their status as a customer’s primary bank. Customers today often belong to multiple banks, and customers could take more of their deposits and transactions to financial service providers that offer better experiences.

“In this instance, [the risk] is losing primacy as a bank where the customer keeps hold of the credit card but stops using it,” Wilson said. “Banks need to invest in the end-to-end customer journey across the card experience from onboarding to loyalty, to mitigate the risk of being disintermediated.”

Among this digitally native, younger cohort, credit cards are often one of the few physical items from their bank that a customer keeps with them, but the role of the card is at risk, Wilson said.

“Traditionally, cards have been a sticky part of the banking customer relationship, but with the emergence of digital payments and wallets, they are certainly under threat,” he said.

Customers are frustrated by long wait times when they contact customer service and inconsistent agent communication, Capgemini found.

Nearly 2 in 5 customers are frustrated by their bank’s lack of transparency, including a lack of clarity on interest rate terms, annual fees, and late payment fees, Wilson said. One-third of customers express disappointment over the apparent access to “exclusive” offers and perks in rewards programs that encourage them to use their cards more frequently.

“They believe that the fees associated with their cards do not justify the value received,” he said.

Potential customers encounter challenges, too. Nearly half of prospective customers abandon the application process due to a poor onboarding experience.