A new business survey by Fico has revealed that Financial Services companies are severely lagging in online consumer services with the vast majority of traditional banks and fintechs are either far behind their transformation goals, or missing them outright.

The report and underlying survey found that three percent of traditional bank executives feel their company has taken the necessary measures to protect their businesses against digital disruption, while a majority (71 percent) voiced doubts around their company’s ability to respond to digital disruption. Just four percent are extremely confident that they can offer the level of personalized, data-driven services consumers receive elsewhere

Bill Waid, Vice President and general manager of Decision Management Solutions for FICO said “Consumers today are accustomed to an amazing array of highly-personalized, data-driven services from digital service providers like Amazon and Google.”

“However, when they look to their financial institutions to provide comparable user experiences for their banking needs, most banks are falling far short.”

The survey shows that the majority of financial services firms are struggling with digital transformation and in providing customers with the types of personalized on-line experiences they receive elsewhere. As a result, those firms risk the type of widespread customer defections plaguing the traditional banking industry today.

For example, when it comes to anticipating and proactively responding to customers’ needs in real-time, the majority of banks are woefully ill-equipped. Only 14 percent of banks rated themselves as outstanding, and less than half (42 percent) rated themselves as very good at being able to anticipate and respond to customers’ needs.

Likewise, omni-channel delivery is a major pain-point for banks with almost two-thirds (62 percent) struggling with consistency-of-services across all channels (e.g. in-bank, online, mobile, call center). This is a stark contrast to fintechs, where 63 percent of respondents are highly confident in their delivery of services across multiple channels as very good. Despite these disparities, banks appear to be narrowing the gap with fintechs when it comes to delivering personalized products and services. 40 percent of banks believe they are extremely or very good at it, versus 55 percent of fintechs.

Nikhil Behl, Chief Marketing Officer at FICO said“Consumers today expect highly-personalized interactions that predict their needs, surprise them and delight them. They expect to feel valued and treated as the most important customer. At the same time, financial institutions want to efficiently acquire customers and keep them for life. However, the survey shows that most financial services firms are struggling to deliver the personalized, digital experiences consumers expect and would be required to keep them for life.”

“Without a customer-centric approach to digital transformation, that uses data and analytics to predict consumer behavior and optimize interactions, customer defections in financial services will continue to hover near the all-time highs we are seeing today.”