Presented by EdgeVerve
The financial industry is in the midst of what McKinsey calls the ‘Great Banking Transition.’ Dealing with increased regulatory oversight, new digital frontiers and fierce competition from the new kids on the financial block, banks are surfing a never-ending wave of disruption. Their key to riding the wave? Getting customer experience (CX) right.
CX has been a key focus area for several years now, but with the evolving landscape within the financial industry, several new factors impacting CX journeys have emerged. With CX becoming a significant priority, it’s no surprise that hard data backs the fact that CX directly impacts loyalty and growth. For instance, McKinsey found that banks that are crushing the customer satisfaction game also lead significantly in financial metrics. In a time of fickle loyalty, satisfied customers are six times more likely to remain with their bank; and banks can’t afford to ignore this fact.
Customer expectations are also at an all-time high. In the age of Amazon and Uber, where instant gratification is the norm, banking has become more about that seamless “you get me” experience, with services that are not just convenient but also tailored to their individual needs.
At the end of the day, the unbundling of banking services has made banks less relevant to a consumer’s daily life. Today, banking consumers can get instant loans, make blink-of-an-eye transactions, and pay bills all from a single app. Why would they go to a bank when a Superapp will do just fine? Because of this, banks are losing vital transactional data that they need to drive personalization.
Digital banking experiences: Myth vs. reality
In the war for the customer, banks need to level up their digital game. And they have been trying to do so. In the last decade, we’ve seen a seismic shift toward digitalization that has redefined how financial institutions operate and interact with their customers. Today, banking is just a tap away, 24/7, on your nearest device. But is that enough?
Despite rapid digitalization, banks continue to struggle with CX mastery. Bain found that even in the best markets for account opening, only about 66% were successful the first time. In fact, a considerable gap exists in the perception of CX delivery, where many customers say that the experience delivered rarely meets their expectations. So where are banks going wrong?
The Achilles heel: Siloes that fracture customer journeys
To understand what’s throwing a wrench in the banking experience, let’s take a deeper look under the hood of fancy UIs.
You see, banks have thousands of customer journeys. But an unwillingness to abandon this outdated, compartmentalized approach where one department doesn’t know what the other’s doing is creating organizational siloes, fracturing user journeys and delivering inconsistent experiences.
This inconsistency is the antithesis of the seamless, intuitive interactions that customers have come to expect in the digital age. What’s more, the legacy systems that many banks operate on are not always compatible with modern, agile solutions, creating a gap between customer expectations and the bank’s capabilities.
As banks try to bring in new technologies, their point-solution and proof-of-concept-led approach amplifies siloes. This creates a complex web of old and new systems that don’t talk to each other and hinder value delivery from digital efforts.
CX success lies in a platform-first approach
In their journey toward digitalization, many banks have concentrated on streamlining customer journeys, often through targeted solutions like automation or AI to address specific problem areas. However, true digital success goes beyond these piecemeal enhancements. For banks to truly excel in the digital arena, a shift in mindset is required. It’s about adopting a platform-first approach that offers a more integrated, holistic solution rather than completely overhauling existing systems. This approach isn’t just about fine-tuning isolated components; it’s about seamlessly connecting these components through a unified platform that enhances the overall efficiency and effectiveness of the banking ecosystem.
DBS Bank‘s story is a standout in the annals of CX-led success. They transformed their strategy to really focus on what customers need, launching “digibank” with AI that gets personal with financial advice. The payoff? Their customer base and satisfaction rates have skyrocketed.
Many banks streamline, but the real leaders in digital banking are those who reimagine the entire customer journey. They take their ‘hands off the wheel,’ designing systems that amplify human potential while supporting touchless operations. They weave AI into the fabric of banking to deliver seamless service that’s not just efficient but also intuitive and connected. And then, they scale these gains across the business with a platform-first operating model that destroys siloes.
A platform approach helps banks maximize value from their digital investments. In this model, an AI-powered platform sits on top of the existing tech landscape within the bank and unifies disparate technologies, letting data and information flow freely across the business. When information is connected, designing intelligent, cohesive, connected, customer-centric journeys becomes easier.
Banking, reimagined
We’re in the middle of a digital rebirth in banking that’s all about the customer experience. Acing the CX game will need deliberate, strategic actions focused on customer journeys and supported by an AI-first platform. Banks that understand and adapt to this new reality will not only survive but thrive, setting new standards for the industry and crafting digital journeys that customers don’t just need but love.
Unlock your enterprise’s full potential — embrace the Platform Shift with EdgeVerve.
N Shashidhar is VP & Global Platform Head, Edge Platforms at EdgeVerve. Connect on LinkedIn.
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