The digital customer experience in banking: 2020 outlook

“Trust is no longer your differentiator.”


Historically, banks focused on providing a trusted service to customers and relied on messaging and reputation for this trust, to gain market share and build sustained customer loyalty. The equation here was simple, trust equals loyalty equals customer lifetime value (CLV).

In the world of Bank 1.0, trust was established by the fact that banking activities were carried out purely in a physical world. Customers would visit branches to physically deposit and withdraw funds, request a loan or discuss financial needs. The explosive growth of digital technologies has changed this dramatically – it's more complex and far more competitive. The ever-changing customer needs means customers are banking on the go, and through devices, mediums and channels that weren’t originally designed with banking in mind. Banks, and the banking industry as a whole, have had to adapt to this dynamic landscape to merely stay in the game.

Enter Bank 4.0, which calls for a way of thinking beyond what has ever been required before – the iterative innovation process we have grown accustomed to has worked to create incremental enhancements to our banking experiences. But it is truly customer-centric, first-principle thinking that will guide us into the future and leave the laggards chasing their tails.

The concept of customer-centricity is widely spoken about in workshops, strategy sessions, board meetings, and even around the water cooler. As easy as it may be to explain, is far more difficult to implement, let alone do well. Fundamentally successful customer experience management (CXM) is not possible without this first-principle thinking. Questions have evolved from “how can we do this better” to “how can I solve the customer’s problem, service their need in the best way possible, or create a new product to meet a future need”.

This gargantuan shift in the banking industry is epitomised by recent studies that have shown that, for the first time, we have entered an era where trust is not the chief factor considered by customers when choosing their bank. This has been usurped by customer experience (CX). Forbes captured this tenet by stating that “customers don’t care if you claim you have omni-channel or multi-channel capabilities. They only care that they can connect with you, the way they want to connect with you, and when they want to connect with you. They go through the channel that’s easiest and most convenient for them. It could be a phone, a desktop computer, a tablet – whatever communication method they are most comfortable with.”

It must be stated, however, that trust is by no means less important to banks. Trust, in the eyes and minds of the modern-day consumer, is table-stakes. It is implied and expected, and those that do not conform to a basic standard will suffer a very rapid demise.

To complicate CXM even further, banks are coming to realise that a customer’s digital experience with their bank is constantly being compared to all the digital experiences in their lives. The demanding customer expects the same (if not better) experience with their bank that they get from the likes of Netflix, Amazon, iTunes, Spotify, to name a few.

This can be seen in the data – in 2016, 89% of respondents to a Gartner study believed competition was based predominantly on customer experience, versus just 36% from four years prior. In addition, an IDC study revealed that worldwide spend on CX technology amounted to roughly $508 billion in 2019, with a projected compound annual growth rate (CAGR) of 8.2% for the period 2018-2022, reaching a staggering $641 billion in 2022 – making it the fastest growing enterprise application software category.

So, what emerging technologies are best positioned to provide customers with the biggest impact on CX? A Gartner study revealed that in 2020 and beyond, these emerging technologies are artificial intelligence (53%), virtual customer assistants and chatbots (39%) and omnichannel engagement solutions (37%).

Banks looking to differentiate themselves through customer experience should be focused on the following:

1. Understand the shift from GUI to CUI

In the past, customers were delighted in the graphical user interface (GUI) and intuitive interactions with Web and mobile applications. Oftentimes the bank with the best mobile app was perceived to be the best, or “most innovative”. Recently, customers are gravitating towards a conversational user interface (CUI), where they interact, and transact, using natural language through voice on virtual assistant devices, or chat via instant messaging apps.

2. Use technology to combat the trade-off between customer security and friction

Historically, banks were challenged with finding a balance between offering customers rigorous security measures and offering them seamless, intuitive interface. Today, technology can be leveraged to offer customers state-of-the-art security without the cost of introducing friction or complexity, which frustrates customers and increases the risk of onboarding drop-off, and transaction abandonment.

3. Meet the customer where they are and feel most comfortable

The modern-day customer is largely tech-savvy, mobile and expects instant action and feedback. Processes and technologies need to cater for this, giving customers the ability to onboard, login, interact and transact remotely and digitally. In so doing, organisations need to ensure they don’t introduce unnecessary friction and must be cognisant of the challenges their customers face, for example, offering a large mobile application with high data consumption, and pushing regular application updates in areas of low connectivity and/or high data costs.

4. Have a truly single view of the customer

As already discussed, the digital customer is likely to engage their bank from a multitude of channels and change these from one interaction to the next. The customer sees their bank as one entity and expects to be treated the same by their bank. Whether the customer is engaging with the loans department, or credit card division, or customer service, data should be shared and easily accessible so as to ensure every customer engagement is part of a seamless conversation.

In summary, trust in banking is now implied and expected by the customer, and customer loyalty and CLV is being driven predominantly by delightful customer experience. We have often heard the adage that this is “the year of the customer” – but it is more relevant today than it ever has been before.

With our key strategic partnerships and cutting-edge AI technologies, Blue Turtle Technologies is able to offer a full end-to-end digital solution that will enable customers to engage and transact using virtual assistants, conversational AI, and process automation. We develop integrated solutions that include digital onboarding, chat banking, digital insurance claim processing and much more, using chat, natural language and hand-over to live agents when required.

We are also able to surface conversational AI over multiple channels, such as Web, in-app, Facebook Messenger, and WhatsApp with our access to the WhatsApp Business API.

Contact us now for more information.