Reboot of Customer Experience Trends in the Banking Industry 2023

The COVID-19 pandemic created a mega shift from physical to digital, acting as the catalyst for digital progress multiple times over. People have adopted digital behaviours that have become habits. In today’s world, a bank cannot be fully developed digitally without focusing on customer-centricity. It is becoming a necessity to survive in the post-pandemic era.

“You’ve got to start with the customer experience and work back toward the technology – not the other way around.” – Steve Jobs

During the pandemic, almost every customer expected banks to enhance and accelerate their digital initiatives. Financially literate customers emphasized that this pandemic increased their expectations of a bank’s digital capabilities.

The standard set by end-users for digital banking customer experience is very high, and the digital transformation efforts by banks are quite evident in matching those standards. According to McKinsey research, seventy-five percent of customers have tried different brands since the pandemic started, and sixty percent of those consumers expect to adopt new brands and stores in their post-pandemic lives and routines.

For any bank, the three pillars of loyalty, empathy, and emotional connection are helpful in bonding with their customers. Today’s generation of customers feels that now is the time for businesses to update and upgrade how they operate, engage, and contribute to society across various fronts.

In this article, we will explore how various strategies of customer experience design can help banks transform and adapt to the wave of digital transformation in the post-COVID era.

1. The Digital Perspective

Digital technologies have opened brand new possibilities, but there are still opportunities yet to be discovered and utilized to the fullest, especially in the banking and finance industry. Companies can create new ways to deliver existing products and services or expand various engagement methods.

Despite the need for well-developed digital channels and top-notch banking customer experiences, COVID-19 highlighted the fact that the financial industry is unprepared to embrace the digital age. In a situation where digital means everything, there are still cases where people are expected to risk their health just to visit a banking branch, even though all the necessary technologies to avoid such situations are already available to the banks.

In today’s times, when the importance of digitalization is stressed, it’s critical to carefully evaluate the proper way to create and integrate a digital strategy. Otherwise, there’s a big possibility of reliving the unfortunate situation in the recent past when banks were the last ones to develop other channels for services.

“The number one bank in the world will be a technology company,” Brett King.

Successful digital businesses are always two steps ahead, constantly monitoring changing customer behaviour and innovating new ways to adapt their products and create new ones according to rising expectations, which applies to the banking industry as well. Banks also need to develop their digital competencies to instantly adapt their service to any kind of digital platform. Their digital strategy should not only encompass their existing products and services but also provide a clear vision for future development.

2. Experience-based Inner Culture

Digital-first companies are flexible as they require quick adaptation, removal of old practices, and adoption of a new, user-centric culture. Good digital transformation and innovative products cannot work if there is no customer-oriented mindset.

It is important to integrate customer-centric thinking throughout the whole organization at every level, along with operational and strategic processes. This ensures that financial solutions match user needs and expectations.

A customer-centric approach inspires the whole team to create products and services striving to make the world a better place for people to live. It allows the maximum utilization of the full potential of a financial company and its digital products.

If customer-centricity is taken into consideration during the development of products and services, it would attract consumers like a magnet.

3. Overcoming the Experience Gap

Customer experience is what differentiates successful digital financial services from failures. Even though it is common knowledge, customer experience improvements do not always work.

There are several factors that go unnoticed while defining customer experience; this is known as the experience gap. The “experience gap” is the negative difference between customers’ expectations and the experience they get from the financial product and service.

Some common types of experience gaps observed are:

Culture Gap: The lack of customer centricity in a company’s culture prevents employees from bringing service closer to customer expectations.

Feedback Gap: The gap that results from a lack of data about customer expectations and their experience OR collecting data but not acting upon it to solve user problems.

Design Gap: This results from poor design execution.

Execution Gap: This is formed from incompetent design and poor methodology.

Value Gap: This gap is formed when the design ecosystem does not comply with user expectations.

Overpromise Gap: This is defined as promising something that the product cannot provide, leading to higher disappointment in user expectations.

Emotional Gap: If brand communication is purely informational and focused on functional features, an emotional connection with users cannot be formed.

Digital channels are the main marketing and PR of the brand. A negative experience with a mobile application or Internet Banking can negate all the positive promotional efforts. It is important to bridge these seven experience gaps that might arise when creating digital products.

4. Emotional Connection

Forming an emotional connection with customers is one of the key factors to ensure a brand’s success. For financial institutions to succeed, it’s important to consider interface usability and digital innovations along with the integration of personalized, positive experiences that form an emotional connection.

When customers compare their digital experiences, there’s often a large gap between the usability and experience of social media platforms like Facebook and Instagram and their banking app. To keep up with the experiences delivered by Big Tech, finance companies should find out what users love about their products and think about how to integrate that to create a more emotionally engaging experience.

5. Experience-driven KPIs

As digital transformation shifts more toward customer-centricity, it’s crucial how performance is measured. For decades, the key performance indicators (KPIs) have been the level of loans, accounts, and the number of leads and prospects. But to become a successful financial brand, the focus should be on:

• User feedback.
• The number of actual users who recommend the product to friends.
• The number and reasons for complaints about the service.
• The number of positive and negative comments about the company on social media platforms.
• To evaluate the impact of user-centred actions taken by the company, there must be certain performance indicators in place that help focus team efforts on the right direction.

6. IQ to EQ

There is a need for highly emotionally intelligent people who serve as bridges between customers and the complex opportunities uncovered by new technologies. They are the “user advocates” that ensure a user-centred approach in digital product development.

In the digital age, the focus is shifting from IQ to EQ—from intellect to emotion. EQ is all about the emotional impact the product or service of the brand has on people’s lives.

Future technologies, like artificial intelligence, big data, machine learning, and automation, can take customer experience to a brand-new level. Successful banks will be the ones that unite the power of technological capabilities with the power of genuine empathy and emotional connection that only humans can create.

7. Consistency through Product Ecosystem

Often, many banks digitize their products separately. This causes high fragmentation within the financial customer experience as the usability, information architecture, and the interface itself differ. Also, having different departments each working on their own product creates fragmentation. This leads to a broken banking customer experience because users expect their banking services to be a connected, holistic flow and not separate fragments.

The main problem is caused by the lack of a united vision that would include all the products and services provided by the bank. This is often since digital channels are considered an alternative or additional form of service delivery. Customers expect all the channels to be equally well-designed, communicating the same visual brand language and usability patterns.

Successful banks earn the trust of their customers by overcoming organizational silos to create and develop a united, user-friendly ecosystem that ensures a smooth, connected flow of a delightful experience.

8. Contextual Financial Experience

The key to becoming a successful bank is complete focus on solving customers’ problems instead of following a standardized scenario. It requires true empathy toward the customers, getting to know them.

From a practical perspective, this calls for personalized, contextual banking experiences. As the number of advanced technological solutions for data processing and personalization through AI is becoming more accessible, it is broadening the opportunities Banks can offer their customers. Personalized, contextual financial products powered by technology should:

• Inform the users about any situation that requires their attention, even when they have not thought of it themselves.
• Help improve users’ financial health by monitoring it and providing recommendations.
• Make financial forecasts and offer uniquely crafted possibilities according to the user’s specific needs and goals, in a specific context.
• Soon, it should also enable users to conduct financial operations using voice processing, gestures, neuroscience, VR, and AR.

9. Teaming Up with Fintech and Technology Companies

Most advanced banks are investing in Fintech companies and integrating their technologies into their services. The readiness to integrate third-party solutions allows Banks to improve the service package for users and deliver additional value.

Banks that are transforming into digital companies are actively using Big Tech platforms and services to improve the banking customer experience, optimize work processes, and promote their services. The digital strategy of successful financial institutions must include guidelines for tracking, using, and collaborating with Fintech and Big Tech companies.

To meet customers’ expectations, advanced banks bring digital experts to the table by collaborating with Fintech startups, UX architects, interface design professionals, and user researchers who understand digital customers’ needs and behaviour to create delightful financial products.

Finally, it is the time when every business is reminded of why it exists and what it has to offer to its clients. In such circumstances, it’s all about finding the best ways to serve the customers and ease their daily struggles. If the customers see that the financial brand has their back, cares about them and is actively looking for more and more ways to help, the company will receive trust, loyalty and respect in such scope and intensity that would be impossible outside of the context of the crisis.

So, it is encouraged to view it as an opportunity to take the business to a brand-new level by forming long-lasting emotional connections with the customers in the post-pandemic world.