The survey suggests that the physical-store experience is increasingly falling short of consumer expectations:

• 50 percent say the checkout process takes too long
• 48 percent say items aren't in stock
• 46 percent say they can't find the items they want
• 22 percent say they don't always have applicable coupons or offers with them
• 20 percent say it is hard or time-consuming to keep track of receipts
  
  As consumers' expectations rise, merchants, advertising agencies and new financial services entrants are all trying to capture consumer attention at the point of purchase and, in some cases, to disintermediate traditional payment players. The threat to existing banks is evident: 87 percent of those who use the services of alternate payment providers (such as PayPal and Obopay) indicated a strong interest in using mobile Short Message Service (SMS) or a similar method to initiate payments in physical stores. The PELORUS Group estimates that by 2010, payments made via emerging methods such as radio frequency identification (RFID), SMS, and biometrics are expected to grow to $400 billion. In addition, 23 percent of all survey respondents expressed interest in using a mobile device to make contactless payments in physical stores, and that number is only expected to grow. Two-thirds of current mobile banking users expressed interest in "swiping" a device embedded with a chip at the point of sale.
  
  "Consumers not only recognize the conveniences enabled by the Internet but now also require the totality of their shopping experiences to afford those same benefits," said Greene. "Given their current interaction with both consumers and merchants, banks are in a unique position to provide these 'connected' propositions and the insight that leads us into 21st-century commerce."
  
  How Financial Institutions Can Compete
  
  Through the study and its proven success working with 80 of the 100 largest global financial services organizations, Cisco IBSG identified the consumer segments with the highest likelihood of engaging with banks for connected commerce services. The survey also identified the most important ways in which financial institutions need to change their interactions with consumers in order to remain relevant in today's market. To increase their competitiveness, banks must:

• Provide superior commercial services with greater transparency, security, speed and flexibility
• Use their relationships with, and access to, both merchants and consumers to provide new revenue sources to the merchants and value-added services to consumers
• Help consumers make sense of their spending patterns and provide guidance and recommendations
• In collaboration with the merchant, provide advertisers and product manufacturers with access to consumers at or near the point of sale so that the advertisers and manufacturers can offer real-time, targeted promotions gleaned from the customers' profiles, transactions and behavior analytics
• Manage loyalty programs to lower the cost of running these programs for merchants and to improve the ease of use and benefit accumulation for consumers
• Build a subscriber-referral model for merchants to bid for customer attention
• Provide customized payment terms or offer "matching" terms at the point of purchase
  
  "In this changing landscape, banks must continually evaluate their long-term competitive position to take advantage of new opportunities and mitigate threats presented by the connected consumer at point of sale," said George Tubin, senior research director, Tower Group.

For more information on the Cisco IBSG retail financial services survey, please visit http://www.cisco.com/go/ibsg/financialservices.