Capgemini: Banks Face Loyalty Crisis Over Card Services

Customer loyalty in retail banking is under threat as card experiences fail to meet expectations, according to new research from Capgemini Research Institute, a global strategy and transformation consultancy.

The World Retail Banking Report 2025 reveals that while 73% of credit card customers between 18-45 years old prioritise exclusive experiences, rewards and cashback offers, three-quarters (74%) report being either indifferent or dissatisfied with their current card experience.

Digital disruption reshapes payments landscape

The banking sector faces disruption from the rise of contactless and remote payment options. 

Account-to-account (A2A) payments—direct transfers between bank accounts without intermediaries—could offset 15-25% of future card transaction volume growth, according to payment executives cited in the report.

Physical cards now serve as financial companions and often represent the only tangible connection between consumers and their banks. 

The research found that 88% of industry executives globally consider an expanding reward ecosystem—partnerships that extend benefits beyond traditional banking services—as the most effective method for increasing customer engagement.

However, these reward programmes are not translating into customer satisfaction. 

Only 26% of cardholders express satisfaction with their cards, while 50% remain indifferent and 24% report outright dissatisfaction.

“At a time where convenience and personalisation dictate customer expectations, our research highlights the fragile state of cardholder satisfaction,” says Gareth Wilson, Global Banking Industry Leader at Capgemini. 

“Contact centres represent the front line of engagement, shaping brand perceptions, yet they remain the industry's Achilles' heel.”

Banks' marketing teams cite several challenges in retaining customers, including competition from new-age banks and alternative card providers (83%), ineffective messaging (72%), insufficient customer insights (66%) and complicated application processes (34%).

Onboarding friction costs banks new customers

The research identifies a substantial loss of potential revenue through inefficient onboarding processes. 

Globally, 47% of prospective customers abandon their card applications mid-process due to poor experiences, despite having already selected their preferred card.

Only 3% of banks' marketing teams consider their customer onboarding process seamless. Regional variations exist, with 6% of American banks, 2% of APAC banks, and just 1% of European banks reporting smooth onboarding procedures.

The main obstacles include incomplete documentation submission (75%), delays in identity verification (75%), and application volume overload due to limited automation (61%).

Currently, less than a third (29%) of data collection during onboarding is fully automated through artificial intelligence (AI) or generative AI technology—machine learning systems that can create content based on existing data. 

The report notes that 41% of executives plan to prioritise digital onboarding and application processes.

Contact centres critical to customer perception

Customer service interactions through contact centres play a vital role in shaping brand perception. The report finds that only 24% of customers experience satisfactory interactions during these engagements.

Digital-first card users cite extended wait times, inconsistent communication, and disconnections between digital channels and branch representatives as primary sources of frustration.

The importance of consistent customer experience across all touchpoints is reflected in the plans of 86% of banking executives, who indicate they will prioritise omnichannel experiences—integrated customer service across multiple platforms—over the next 12 months.

Data-driven opportunities for improvement

The Capgemini report highlights untapped potential for retail banks to utilise existing customer data more effectively. Despite access to robust data sources, many banks struggle to convert this information into personalised experiences that build loyalty.

For urban, digital-native customers who represent a growing market segment, the report suggests that banks need to implement a culture shift towards customer centricity at each stage of the card journey, from initial awareness through to ongoing reward redemption.

The research identifies several opportunities for banks to improve contact centre performance, including proactive outreach for the 43% of customers who contact agents to report lost or stolen cards, real-time resolution for the 48% seeking help with card activation, and sentiment-driven support for the 65% who engage agents to dispute transactions.

The gap between customer expectations and current banking practices creates both challenges and opportunities for traditional financial institutions facing competition from fintech startups and digital-only banks, which often excel at creating frictionless digital experiences.

Through implementation of AI-driven self-service options, financial institutions can enable quicker issue resolution while maintaining personalised support when needed.

“Banks have an opportunity to transform contact centres into intelligent engagement-focused hubs that 'wow' customers,” Gareth concludes.

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