Presented by EdgeVerve
The financial industry is experiencing what McKinsey refers to as the ‘Great Banking Transition.’ Facing increased regulatory oversight, evolving digital landscapes, and fierce competition from new entrants, banks must master customer experience (CX) to navigate this disruption successfully.
CX has been a focus for years, yet the changing financial landscape has introduced new factors influencing customer journeys. Data reveals that superior CX correlates directly with loyalty and growth. McKinsey found that banks excelling in customer satisfaction also outperform in financial metrics. In an era of fickle loyalty, satisfied customers are six times more likely to stay with their bank.
Today’s customers have heightened expectations. In a world shaped by Amazon and Uber, they demand seamless, personalized experiences that are not just convenient but also cater to their individual needs. With the unbundling of banking services, traditional banks risk becoming less relevant. Consumers can now access instant loans and make quick transactions through a single app, leading to a loss of vital transactional data crucial for personalization.
Digital Banking Experiences: Myth vs. Reality
In the competitive landscape for customers, banks must elevate their digital offerings. The last decade has seen a significant shift toward digitalization, fundamentally changing how financial institutions interact with their clients. Banking is now accessible 24/7 from any device. However, this alone may not suffice.
Despite rapid advancements in digital banking, many institutions struggle with delivering exceptional CX. Bain's research indicates that, even in optimal markets, only about 66% of account openings succeed on the first attempt. There is a noticeable gap between customer expectations and the experiences provided.
The Achilles’ Heel: Siloed Customer Journeys
Examining the banking experience reveals issues beneath the surface. Banks possess numerous customer journeys, yet many remain trapped in outdated, siloed operations. When departments operate independently without cross-communication, it fractures user journeys and results in inconsistent experiences.
This inconsistency contradicts the seamless interactions customers expect in the digital era. Moreover, many banks' legacy systems hinder their ability to adapt to modern solutions, amplifying the gap between expectations and reality.
As banks pursue new technologies using point solutions and proof-of-concept approaches, they inadvertently reinforce these siloes. This creates a complicated web of systems that fail to integrate, limiting the value derived from digital efforts.
CX Success Requires a Platform-First Approach
While many banks have aimed to streamline customer journeys through targeted solutions like automation and AI, true digital success necessitates a mindset shift. A platform-first approach is crucial, offering an integrated solution rather than piecemeal upgrades. This strategy not only fine-tunes isolated components but also connects them through a unified platform, enhancing the overall banking ecosystem's efficiency and effectiveness.
DBS Bank exemplifies CX-led success by pivoting towards customer needs, launching “digibank” with AI-driven personalized financial advice, resulting in soaring customer satisfaction and growth.
Banks that excel not only streamline processes but also reimagine the entire customer journey. By designing systems that enhance human potential and enable touchless operations, they can seamlessly integrate AI into their services, creating a connected, efficient customer experience. This approach, built on a platform-first operating model, effectively dismantles siloes.
A platform strategy maximizes the value of digital investments. An AI-powered platform can unify disparate technologies, allowing data and information to flow freely across the organization. This interconnectedness simplifies the design of cohesive, customer-centric journeys.
Banking, Reimagined
We are witnessing a digital renaissance in banking, prioritizing customer experience. Excelling in CX requires deliberate, strategic actions focused on customer journeys and supported by an AI-first platform. Banks that embrace this new reality will not only survive but set new industry standards, creating digital experiences that customers not only 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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