Banks have traditionally competed on factors such as products, pricing, and distribution networks. But in today’s digital age, where competition from fintech disruptors is increasing, traditional banks are realizing that a great customer experience is essential to retaining and growing their customer base.
This is not just a passing fad. Customer experience has become a top strategic priority for banks because it directly impacts customer acquisition, retention, and loyalty. Positive experiences lead to stronger customer advocacy and increased lifetime value.
Conversely, a poor experience reduces trust and encourages customers to explore alternatives.
Leading banks are making significant technology investments to enable personalized, omnichannel interactions and simplify historically complex processes. We also focus on understanding emerging customer needs and pain points through our Voice of the Customer program and journey mapping.
The goal is to transform complex backend systems into intuitive, customer-centric solutions.
This cultural shift puts customers at the forefront of everything a bank does, from product development to channel strategy to performance incentives. Banks are recognizing that while short-term profits are important, relying too heavily on traditional revenue streams is risky as consumer expectations rise.
Competing effectively on customer experience creates a strategic advantage that is difficult for competitors to imitate quickly.
Transition to customer-centric banking
With customers becoming more central to their organizations than ever before, banks are focusing on customer experience for a variety of reasons.
There’s a big difference between offering a product or service to a customer from time to time and building a loyal customer relationship. In an increasingly competitive market, customer expectations are increasing.
Therefore, it is imperative that banks design their customer experience (CX) to be as optimized as possible. Distinctive CX potentially increases customer loyalty, and satisfied customers tend to come back, become “promoters” and make repeat purchases.
Technology plays a key role in ensuring this connected customer experience. To successfully implement technology, organizations need to know “What are our customers doing?” What do customers want? ” Innovating and staying connected with customers helps organizations increase and maintain customer loyalty.
The role of data in optimizing the customer experience
Data is the new currency of the digital age, and financial institutions must harness its power to remain competitive. Maximizing data value is the basis of digitalization.
It is important to establish an efficient data environment that drives banks with data and empowers customers through personalized experiences. By leveraging advanced analytics and AI-based insights, financial institutions can differentiate themselves and gain an advantage in a data-driven world.
However, while data can be a powerful ally in fostering trust between brands and customers, it is essential to use customer data responsibly while respecting customer privacy. This means making sure your customers feel like their data is always being used in their best interest.
Encouraging people to consume less of something can strengthen this message, especially when combined with data-driven insights to better serve customers and improve the customer experience.
The impact of digitalization on customer experience
Digitalization is not a superficial transformation. It involves fundamental changes in business operations. End-to-end digital agile operations means a complete transformation of business models with digital enterprise architecture and intelligent automated workflows.
Financial institutions are breaking away from outdated practices and adopting new ways of working to achieve operational agility that adapts to the dynamic demands of the modern financial environment.
Cloud is no longer just a technical buzzword. This is the basis of new business models characterized by digitalization strategies. By adopting cloud-native architecture and containerization, financial institutions can quickly create and deploy new services.
This modern approach to application deployment within a hybrid multicloud environment facilitates a complete transformation of business models to align with principles of digitalization, agility, and intelligence.
The future of customer experience in banking
The future of customer experience in banking is promising, and there are several trends shaping its trajectory. We already know that some banks will stop developing new services for businesses only on old channels, and future developments will focus only on API connectivity.
But our concern is how long it will take before this becomes the new standard across all banks, and how easy it will be to use new services and APIs. This means existing channels will continue to exist for some time to come.
However, these new services will become important decision-making factors when companies choose banks for financing. Banks that cannot provide innovative solutions that customers want will be excluded from the selection process, or at least not make it to the final round.
Open Banking Regulation and the global payments messaging standard ISO 20022 are forcing treasurers to digitize and improve processes from liquidity decisions to fraud detection.
These advances should help make a significant contribution to the success of your organization. Proper implementation of ISO 20022 enables strategic financial management and improves the relationship between a company and its B2B customers through better data sharing and interoperability.
Subscribe to get daily business insights
