The Customer Journey in Banking: Why Banks Need to Invest More in Digital Tools to Improve It

Technology has completely changed customer journeys within the financial services sector. 

Today, prospective buyers might open a new account online or using a mobile device, but finish the process in a branch or on the phone with a call center representative.

It’s crucial that financial institutions get to grips with these new parameters as it’s the quality of these journeys that sets the tone for the customer experience—the most common reason for opening and closing accounts. 

Ultimately, a bad experience affects your bottom line. Consumers who have a very poor experience aren’t likely to purchase additional goods or services. 

On the other hand, those who have a great customer experience are 91 percent more likely to purchase again. 

As customer journeys evolve, and the importance of customer experience increases, financial institutions face a unique and modern set of challenges.

1. Creating digital customer experiences

In 2015, 67 percent of customers used three or more touchpoints to interact with businesses, up from 17 percent in 2000. 

Today’s customers want the flexibility to access their accounts across a variety of different channels. That might mean a visit to a social media page, a call to a contact center, a download of  a branded app, or a visit to a physical location.  

Although the need for physical locations hasn’t disappeared, mobile connectivity is growing, and so are the possibilities it can deliver.

In 2018, 70 percent of retail banking customers said that they primarily accessed their accounts via mobile and 61 percent said they’d research a bank’s mobile capabilities before opening an account.

A comprehensive, in-app self-service platform for online customers, therefore, represents a better option than investing in new locations. A digital presence is essential if you want to build effective customer relationships.

2. Building simplified, customer-centric workflows

Some financial institutions present customers with a battery of products and services leading to confused customers and increased churn. 

A great customer experience should be seamless, simple, and streamlined, with customer’s needs met at every step.

But creating a seamless workflow doesn’t start with the customer, it starts internally.

As McKinsey points out, many banks see complicated processes within their organization and try to solve them by adding more people to the workflow. This simply results in more confusion.

Banks need to simplify the steps within their customer journey.

In one recent report, over half of the companies surveyed indicated that organizational silos, including slow processes and a lack of willingness to change, are the top challenges to the customer experience.

Simple, streamlined processes are the key, and they start with employees.

3. Automating and personalizing experiences

New and emerging technologies like AI are already being brought in to improve customer engagement.

• Wells Fargo has seen success with a chatbot banking assistant on Facebook. Customers can interact via Facebook Messenger to check their account balance, recent transactions, and basic expenditures. This simple self-service solution boosts brand loyalty while eliminating the need for service representatives to answer basic questions.

• Meanwhile, Commonwealth Bank of Australia has launched Ceba—a chatbot designed to assist customers with over 200 banking tasks including card activations, account balance checks, making payments, and more. Instant customer interactions eliminate waiting time. Instead, a personalized experience helps gather all the information they need in seconds.

But AI isn’t the only technological differentiator banks should look to. According to Atos, the ability to pay instantly or connect banks to other services via API may revolutionize the customer relationship by providing new ways for banks to meet and satisfy customer needs.

4. Understanding customer journeys

Using customer journey mapping—creating a roadmap illustrating acquisition channels and how they flow together—companies gain a better understanding of customer behavior.

According to research, only about two-thirds of organizations utilize a customer journey map. However, nearly all those who do say that it has delivered positive results covering a large range of benefits.

Visibility into the customer journey gives banks the opportunity to build a more complete digital experience for customers at every stage of their banking relationships.

5. Building a new banking roadmap

Customers want to open new bank accounts online, but 47 percent of financial services organizations won’t allow them to, if it’s their first, despite the demand. Instead, they’re forced to go into a branch or pick up the phone.

While there are challenges around security, fraud, and theft, customer data clearly shows a strong desire for digitizing parts of banking   

Financial institutions need to understand the gaps in their existing customer journeys and innovate around those opportunities. By isolating weaknesses in the onboarding process and building services around specific endpoints in the customer journey, financial institutions can increase customer satisfaction and the quality of the user experience.

We know that an excellent customer experience leads to higher purchases and greater customer loyalty. Addressing these challenges helps build a broader roadmap to capture and maintain customers as they move forward.

Rethinking the Customer Experience

If banks want to increase profits and market penetration and boost their bottom line, they must perfect their customer experience.

Today’s customers are looking for more than a place to keep their money. They’re looking for an institution they can trust. By providing a great customer experience, you can let them know that they’ve found it.

Here are 11 tools that banks can use to do just that:

1.  Mobile apps

Building an effective mobile app for smartphones might sound like an obvious way to enhance the digital banking experience, but it’s an opportunity that is often overlooked by smaller banks and credit unions. 

Right now, 97% of millennials use mobile banking to handle everything from paying bills to mobile deposit.

Fortunately, building an app for mobile devices is a relatively easy fix that even small banks can manage.

2.  Self-service kiosks

Chase has rolled out its “express branches” in several locations. These smaller, advice-driven branches are designed to help customers learn more about Chase and its banking services.

Self-service kiosks take care of everyday banking needs, so customers can open a savings account, check account balances, transfer funds, and review critical account information without the need for a teller.   

By using digital technology, Chase empowers customers to move through the pipeline at their own pace.

3.  Artificial intelligence

AI is one of the few digital powerhouses that have the ability to impact all levels of the banking system.

A study by Accenture lists six areas where AI is predicted to have a big impact. Customer insights and multiple digital acquisition channels are among those areas. 

Artificial intelligence will no doubt help deliver change, but it’s up to banks to determine exactly how they want to use it.

4.  Voice optimization

Voice-based technology is experiencing rapid growth. Currently, global smart speaker sales are expected to exceed $30 billion by 2024. On top of that, 55% of households are expected to own a smart speaker by 2022.

While it might be too early to consider opening bank accounts purely by voice, financial institutions can incorporate natural language processing units to understand what their product is about, optimize content for voice-based search indexing, and ensure that it’s easy for voice tools to explain products to customers.

5.  Improved encryption

According to a study by the Ponemon Institute and nCipher, only 45% of businesses have an encryption strategy applied consistently across their enterprise.

Improved encryption and security helps banks protect customer identities and financial data. Considering the massive financial leaks over the past few years, taking steps to prevent those kinds of headaches can only be a good thing.

Everyone and everything, from an entry-level employee to an AI focused on workflow optimization, has a role to play in improving encryption and protecting data.

6.  Budgeting and wealth management tools

One way of improving the digital banking experience is to develop more tools to help people manage their wealth.

Simple does this by going beyond deposits, ATMs, and debit cards to incorporate a battery of wealth management tools and guidance for customers who want to manage their money more effectively.

These tools improve the customer experience by giving customers everything they need to restructure their finances without ever leaving their financial institution to do it.

7.  Support channel integration

When bank customers have questions, where can they go to get answers?  Are they stuck talking to a call center agent or forced to go into a branch?

Banks can add support channel integration to provide easy access to information. A smooth path to answers does wonders for the customer experience—a huge driver for satisfaction and retention according to one Ipsos study.  

Banks need to look beyond mere account functionality towards a more holistic approach, from delivering an omnichannel or multichannel experience all the way to creating an end-to-end banking solution for customers.

8.  Next-generation payment platforms

In the past, the focus of omnichannel experiences has been front end, leaving the back half of the transactional experience—the spending—in the customer’s hands.

That might be a missed opportunity. Customers want greater flexibility when paying. That’s why payment platforms like Apple Pay, Zelle, and Venmo exist.

Last year, Zelle announced $49 billion sent on 196 million transactions. Year on year payment values increased 58% and transaction volume increased 73%.

Giving customers more control over how they spend their money (rather than forcing a cash withdrawal or using a debit card or credit card) is a surefire way to transform the digital banking experience.

9.  APIs and open banking

Open banking is the practice of allowing third-party financial service providers access to financial data through an API.  

This makes it possible for banking customers to link their accounts with third-party vendors, who could then help them review financial data, transact products, or identify opportunities to manage their wealth more effectively.

Security risks have led to slow adoption in the US, but it’s a tool banks should consider when creating a more complete customer experience.

10. Financial education programs

While financial education programs do exist, such as those from FDIC, banks aren’t engaging enough in this area. 

Banks looking to deliver a more complete digital banking experience should embrace the opportunity to help customers understand how their products can help manage wealth, thereby growing revenue through increasing customer loyalty.

Financial education programs help customers grasp the fundamentals of banking. They can even be used to uncover hidden needs around savings, investment, and small business banking, offering products to meet those needs.

11. Dedicated support team

The truth is, there are some things that AI and self-service just can’t handle.  

A dedicated customer support and success team ensures an end-to-end experience that keeps customers happy.

For customers with specific needs, specialized support teams (like small business banking) can add massive value.

Many banks leverage financial advisors to help with this, but the technological savvy provided by a dedicated support team is a huge boost for any organization.

Examples of companies innovating with digital tools

Now that we’ve talked about tools, let’s have a look at how major financial players have used some of them to drive the digital transformation of their customer journey and create great experiences.

Australian Securities Exchange

While ASX isn’t strictly a bank, it is Australia’s primary securities exchange. With nearly AU$2 trillion in registered equities and nearly AU$5 billion processed every single day, ASX is no stranger to large and constant cash flow.

The Exchange runs on a system called CHESS, which handles the processes of clearing, settlement, asset registration, and other critical services. Built 25 years ago, it still functions normally, but lacks the added security and transparency of a distributed ledger.

Over the past few years, ASX has been working to replace CHESS with a blockchain-based ledger to help them futureproof the Exchange while accounting for user privacy and regulatory compliance.

This evolution in infrastructure may be invisible to everyday users, but as a foundational element of the Exchange, it’s an essential part of the customer journey.

BNY Mellon

A few years ago, the Bank of New York Mellon realized they could free up team members to focus on the customer journey by leveraging robotics process automation (RPA) and machine learning.

RPA helps automate repetitive and labor-intensive tasks across multiple workflows and systems. The software can be trained to emulate a user’s workflow or accomplish a specific task. Once that happens, users only need to intervene when exceptions arise.

The company takes this a step further by incorporating machine learning into the process to optimize workflows through pattern recognition. So robots learn the process via RPA and machine learning teaches the robots (and users) how to optimize those workflows.

This helps the company save money, but it also allows employees to spend less time working with their computers and more time focusing on customer feedback and products that potential customers might want or need.

Westpac New Zealand

Since 2014, Westpac New Zealand has used augmented reality (AR) to give its customers quick insights about their money. Customers can place their bank cards under their smartphone camera and get a glimpse of their most recent transactions, make payments, and manage their spending.  

Using AR removes the need to go through an extensive login or sign-on process every time they want more info about the card in their hand. The bank stresses that this only works if the phone and card are registered to the same user, an important security measure designed to prevent fraud.

AR also brings digital information to life in the real world. Users can hold up their smartphones and quickly pinpoint the location of any nearby Westpac ATM or branch location.  

While it’s possible to do this through a series of apps, AR gives a complete mobile banking experience from a user’s smartphone by creating a link between their physical location and the digital space.

A new journey in fintech

It’s obvious that banks, credit unions, and other financial institutions have experienced some growing pains with the rise of digital banking.

To improve the digital banking experience then, financial institutions need to do more than ever before. With the right mindset and tools, unforgettable customer experiences can be created. 

Learn more about customer experience in the finance industry with our financial services customer experience optimization factsheet.

Laduram Vishnoi

CEO, Acquire.io

Laduram Vishnoi is Acquire’s President & Co-founder. He enjoys building companies and scaling product teams. He’s passionate about AI, machine learning, neuroscience, and meditation.