ARMONK, NY: Banks around the world are overly optimistic on their ability to deliver a personalised service to customers, who are also rather less loyal and trusting than banking executives believe.

A new study by the IBM Institute for Business Value – based on a survey of 1,060 banking executives in 38 countries and 1,600 banking customers in the US, Germany, UK, Singapore and China – found that 62% of bank executives thought they were providing an excellent customer service but only 35% of retail customers agreed.

Further, just 30% of customers said they were receiving a personalised customer experience, compared to the 45% of bankers who felt they were delivering on that promise.

The study reported that while banks are satisfying basic customer demands this was not enough to demand loyalty as many customers were quite ready to change allegiance. Almost half (48%) of banks thought they were doing a good job encouraging strong customer loyalty but only 35% of customers agreed.

An air of complacency was especially evident when it came to trust. As many as 96% of bankers believed their customers trust them more than other non-bank competitors. But only 70% of customers agreed.

Bankers' attempts to utilise new platforms show mixed results. Contrary to what they think, their customers aren't keen to engage via social media. Consumers are more happy to use mobile banking apps and 41% expect most of their transactions to be conducted this way within three years, yet only 10% bankers believe this.

"This is a wake-up call for banks faced with increasing competition," said IBM, pointing to the increasing involvement in the sector of financial technology firms, mobile payments companies and startups replicating banking functions.

"Traditional concepts of what a bank does will change fundamentally and permanently," said Likhit Wagle, IBM Global Industry Leader for Banking & Financial Markets.

"Bankers will no longer be bankers in the traditional sense," he added. "The most successful banks will be focused on collaboration, agility, innovation, analytics and above all on going beyond digital and transforming into becoming a 'cognitive bank'."

Data sourced from IBM; additional content by Warc staff