Target and Walmart already have more than their fair share of customer loyalty. And if either company ever offered banking options, that customer loyalty could soar.

According to a new study from NTT Data, 47% of U.S. consumers would consider Target or Walmart as a banking alternative.

In January 2016, NTT DATA Consulting, the new industry-centric, business and technology consulting approach from NTT DATA, surveyed more than 1,000 U.S. consumers and more than 100 U.S. bankers to investigate core deposit system modernization efforts at leading U.S. banks and the rising threat of consumers looking for banking alternatives.

“Modernizing core deposit systems should be a top priority for banks in 2016,” said Peter Olynick, senior practice lead, Retail Banking, NTT DATA Consulting, Inc. “This effort will enable banks to satisfy rising consumer expectations, achieve a myriad of operational efficiencies and improve their time-to-market for innovation products. Antiquated legacy systems are hindering the banks’ ability to pursue growth opportunities and improve customer experience. Our study found one in three consumers would select a new bank if it could offer more innovative products with a user-friendly experience.”

Here are some other key findings from the research:

  • 23% of consumers would consider leaving their bank for a more modern alternative
  • 1 in 3 consumers would leave their bank for a better online and mobile experience
  • If a large retailer such as Target or Walmart offered banking, 47% of U.S. consumers would consider it as an alternative
  • 71% believe that their bank could do a better job of supporting their banking needs
  • 81% of bankers expect to maintain or increase investments in sustaining current core deposit systems
  • 78% of banker IT budgets is spent on maintaining legacy core deposit systems
  • Only 4% of banks planning to replace existing core deposit systems in the next three years

Bank officials predict major business benefits from investing in a new core deposit system:

New products/innovation (53%)
Increase in customer experience (48%)
Improved agility to respond to business needs (48%)
Improvements in processes within the business (43%)

“This study brought significant insight into the current and upcoming banking landscape in terms of technological solutions,” said Tom Mataconis, senior vice president, NTT DATA Consulting, Inc. “Among the findings, it was shown that 70% of bankers do not feel their processes can quickly adapt to the changing market landscape. To keep pace, NTT DATA Consulting recommends building a road map for a bi-modal approach, which will organize and guide banks through integration while modernizing core technology infrastructure.”

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