Banks are prioritizing customer experience, leveraging technology, data, and digitization to build loyalty and stay competitive. Future banking trends include cloud-based models, API connections, and adherence to open banking regulations and ISO 20022.
Banks have traditionally competed on factors like products, pricing, and distribution networks. However, in today’s digital era with increased competition from fintech disruptors, traditional banks realize that superior 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 greater customer advocacy and higher lifetime value.
On the flip side, poor experiences diminish trust and push customers to explore alternatives.
Leading banks are making substantial technology investments to enable personalized, omnichannel interactions and simplify historically convoluted processes. They are also focused on understanding emerging customer needs and pain points through voice-of-customer programs and journey mapping.
The goal is to transform complex backend systems into intuitive customer-centric solutions.
This cultural shift puts the customer front and center across all bank activities – from product development to channel strategies and performance incentives. Banks realize that while short-term profits matter, overdependence on legacy sources of revenue is risky amid rising consumer expectations.
Competing effectively on customer experience builds strategic advantages that are harder for competitors to replicate quickly.
Banks are focusing on customer experience for a multitude of reasons given the customer is more at the heart of organizations than ever.
There is a substantial difference between occasionally providing products or services to customers and building a loyal customer relationship. In an increasingly competitive market, customers have ever-higher expectations.
It is, therefore, essential that banks design their customer experience (CX) to be as optimal as possible. A distinctive CX potentially increases customer loyalty, whereby satisfied customers tend to return, become ‘promoters’, and make repeat purchases.
Technology plays a key role in ensuring this connected customer experience. To deploy technology successfully, organizations need to know, ‘What does the customer do? What does your customer want?’. Innovating and staying connected with customers can help organizations increase and retain customer loyalty.
Data is the new currency in the digital era, and financial institutions must harness its power to stay competitive. The maximization of data value is a cornerstone of digitization.
Establishing an efficient data environment that drives the bank with data and empowers customers through personalized experiences is crucial. Leveraging advanced analytics and AI-based insights allows financial institutions to differentiate themselves and stay ahead 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. That means making sure customers feel their data is always being used in their best interest.
Encouraging them to consume less of something can reinforce this message, particularly when combined with data-driven insights to serve customers better and improve their experience.
Digitization is more than a superficial makeover; it involves a fundamental shift in business operations. End-to-end digital agile operations mean a complete transformation of business models through digital enterprise architecture and intelligent automated workflows.
Financial institutions are embracing a new way of working, breaking away from outdated practices to achieve operational agility that adapts to the dynamic demands of the modern financial landscape.
The cloud is no longer just a technological buzzword; it is the backbone of new business models featuring digitization strategies. Embracing cloud-native architecture and containerization, financial institutions can create and deploy new services promptly.
This modern approach to application deployment, within a hybrid multi-cloud environment, facilitates a complete transformation of business models, aligning them with the principles of digitization, agility, and intelligence.
The future of customer experience in banking is promising, with several trends shaping its trajectory. We already know that some banks will stop developing new services for corporates entirely for the old channels and further development will focus only on API connections.
But our concern should be how long it will take before this becomes the new norm with all your banks and how easy it will be to use the new services and APIs. This will mean that the existing channels will still exist for a good time.
However, these new services will be essential decision-making factors when corporations choose banks for cash management. Banks that won’t be able to deliver innovative solutions that the customers want will be eliminated from the selection process, or at least they won’t make it to the final rounds.
Open banking regulations and global payments messaging standard ISO 20022 are prompting treasurers to digitalise and improve processes ranging from liquidity decision-making to fraud detection.
Such advances should help them contribute significantly to the success of their organisations. With the right implementation, ISO 20022 can enable strategic cash management and improve firms’ relationships with their B2B customers through better data sharing and interoperability.