SINGAPORE: Financial services brands in Asia need to adjust their strategies as levels of customer loyalty decline and digital engagement grows, a study by McKinsey has suggested.

The consultancy reported that retail banking revenues in the region are set to hit $932bn in 2020, having grown by an average of 9% per year since 2010.

Emerging markets in Asia will deliver 63% of revenues by the end of this decade, compared with 41% at the start, suggesting significant opportunities for banks operating in these nations.

But McKinsey warned that the sector would come under pressure from tighter regulation, slowing growth and increasing customer sophistication, meaning loyalty should diminish.

Over 80% of banking customers already use multiple channels, coming in at an average of six touchpoints per person - ranging from ATMs, call centres, direct mail and branches to online, mobile and traditional media.

Similarly, a 60% majority of account holders believe in shopping around to find better deals, indicating a greater willingness to switch financial services providers.

"In retail banking, as in other retail sectors, 'research online, buy offline' is the watchword that characterizes more and more consumer behaviour," McKinsey said.

Such changes are set to gain pace, given that 65% of mobile phone users in China go online via their devices, and mobile-only web users are due to make up 55% of India's digital userbase by 2015.

In a further sign of this shift, average monthly usage of mobile and internet banking tools by customers has increased by 36% in developed Asia and by 39% in emerging Asia in the recent past.

By contrast, branch visits declined by 28% on average across these two groups.

Customers also use up to five channels to research products and 1.8 to manage existing ones. But over 60% respondents in emerging Asia would prefer to consolidate with one bank - provided their service was seamless.

Data sourced from McKinsey; additional content by Warc staff