How can bank CEOs and CTOs make sure their investments in digital customer experiences are successful? Across the sector, leaders are continuing to spend on hyper-personalization, super apps, virtual assistants and other initiatives designed to attract and retain footloose customers.
Creating seamless digital experiences that satisfy customers is far from an easy task, though. Customer expectations are reaching new heights. And according to the Harvard Business Review, across industries an average of 87.5% of digital transformation initiatives fail to meet their original goals.
With this in mind, let’s look at nine common pitfalls that are stopping banks from hitting the mark when it comes to giving their customers the experiences they want. Then, we’ll pick out some ways banks can get past these pitfalls and build out the customer experiences that will help them succeed in the market.
The first three pitfalls we’ll look at relate to the “envisioning” stage of new technology projects; the next three relate to the “developing” stage; and the final three to the “scaling” stage.
Envisioning
Not being customer-obsessed enough
Many banks see themselves as customer-centric, but they may only be meeting the most basic banking needs, such as facilitating deposit accounts and transactions. To succeed in today’s hyper-competitive market, maximum focus is needed: customer obsession. This means continually reviewing product and service offerings for ways to improve them, for instance through value-adding services such as budgeting tools and AI chatbots.
Failing to align technology with business priorities
An underlying cause of suboptimal customer experiences can be when a bank’s technology development has diverged from its business priorities, or not been able to keep up. This can happen when the processes are not in place for business leaders and technology leaders to collaborate effectively, leading to delays and difficulties prioritizing.
Being too slow to evaluate new technology
Banks are not alone in facing an onrush of new technologies, the benefits of which might not be immediately clear. Moving too slow can result in loss of market leadership, but over-hasty adoption can bring risks. This dynamic was seen in the early days of mobile banking, when traditional banks lost ground to digital-only banks. Today, generative AI brings both potential and risks, requiring banks to effectively assess both under time constraints.
Developing
Feature frenzy instead of delivering value
Pressure to present customers with the latest technology-rich features can lead to poor choices. This can be driven by flawed assumptions about customer priorities, a desire to outdo the competition, or just to achieve “feature parity”. Customers can find themselves given features which don’t meet their real needs, while banks are faced with the opportunity cost of developing the wrong features.
Technology stack not ready to support CX enhancements
Building new CX features on top of the legacy systems risks creating a jumble of dependencies – and all the extra delays that can bring. Just look at what happened at online bank Simple: while its frontend innovations looked fantastic, its banking infrastructure partner’s legacy systems couldn't cope, resulting in a poor customer experience, and ultimately, Simple's demise.
Engineering excellence getting lost in the mix
A bank might have talented engineers but without a clear focus on engineering excellence, the value they deliver may fall short. Engineering excellence — and developer productivity — can be damaged by clunky tools, poorly-designed APIs, and a lack of self-service capabilities. The pressure to show tech agility and high security is also being ramped up by regulation.
Scaling
Not making things easy for the global customer
Getting the right balance between centralization and localization is key to good CX for the “global customer”. For customers traveling abroad, features such as card payments and fraud monitoring need to be hassle-free. If a customer decides to live in a new country, they shouldn’t be treated as a new customer by the overseas branch of the bank. Replicating the code base from one geography with an added layer of localisation might work in theory but the context switch needs to be handled correctly.
Ecosystem benchmarks lagging behind
Banks have historically focused on what they can control, such as their products, services, and processes. But if they are now working with fintechs and other third-party providers to scale, then CX benchmarks need to apply across the bank’s ecosystem. End-to-end orchestration needs to be managed well, or integration issues and performance SLA problems may result.
Risk mitigation damaging the seamless experience
With banking services becoming digitized at scale, more customers than ever are exposed to the risks of digital fraud and other cybersecurity threats. Most at risk are customers unfamiliar with digital banking. To counter the risks and threats, fraud control mechanisms can be added. But measures such as Captchas and making multi-factor authentication mandatory can degrade the customer experience.
How can banks avoid these pitfalls?
To avoid these nine pitfalls, we recommend a holistic approach to CX. This means focusing on considerations that can be grouped under these three headings:
Customer
Technology
Organization
Let’s take a look at each of these in turn:
Customer
Delighting the customer needs to be kept right at the center of everyday product decisions. These decisions in turn should be backed by customer research and frequent customer feedback. Among the techniques that can be used to amplify the voice of the customer are: continuous discovery, customer journey mapping, behavioral science principles and customer-focused service design. Appropriate metrics should be chosen that help to support customer satisfaction and loyalty, and improve the chances of finding new insights.
Technology
Banks can benefit from prioritizing an engineering culture. This allows the bank to keep pace with technology change and attract the best developers. It also helps to ensure that good engineering practices are followed, provides a platform to experiment, and empowers teams to deliver. For example, continuous integration and continuous delivery should be the norm, with automated testing so that developers don’t waste time maintaining, testing and securing existing code. Data should be accessible through a data platform with appropriate governance in place.
Organization:
Strategic alignment at the organizational level is essential for successful CX. If on the one hand a bank is looking to reduce IT costs, but on the other hand is aiming for superior customer experiences — which in turn need infrastructure investments — it can result in conflicting priorities. Solving for this means CX must be treated as a first-class citizen in high-level strategic discussions. The company’s set up must involve leaders who can prioritize and support CX initiatives while navigating organizational constraints.
We hope you enjoyed this brief look at CX in digital banking. We encourage you to read Transforming customer experience inside and out, a report published earlier this year by Thoughtworks in partnership with Harvard Business Review Analytic Services. It looks in more detail at how to deliver effective CX.
Disclaimer: The statements and opinions expressed in this article are those of the author(s) and do not necessarily reflect the positions of Thoughtworks.
