In the era of online banking, customer experience (CX) is the cornerstone of market success. The many interactions a client might have with a banking app or platform should be simple, smooth, and streamlined. Needless to say, if they are overcomplicated or frustrating, the bank might lose the client for good. In fact, one faulty interaction could alienate above 50% of banking application users.
Investing in digital banking CX is a wise and profitable strategic move for a financial entity. The global neobanking market is expected to reach a remarkable value of $556.66B in 4 years’ time. As digital banking technologies are constantly advancing, financial brands will continue to back CX enhancements.
In this article, we will disclose the current trends and top practices to steer your CX strategy and foster lasting client relationships.
What is customer experience in digital banking?
First off, let’s clear up the term. Customer experience in digital banking denotes the general perception of the bank’s online platforms and services. The ultimate goal of CX technologies is to boost the client’s satisfaction by addressing their expectations and preferences.
Digital banking CX involves such elements of the banking customer journey as
- login: a quick and well-protected way of accessing the banking platform;
- fund transfers: clear and straightforward transferring of funds;
- transaction confirmation: visible and detailed confirmation process with receipts; and
- notifications: fast, clear, and customized alerts.
Why is customer experience important for a banking brand? In the case of many clients, brand loyalty hinges on their financial customer experience. One of the main advantages of FinTech apps over traditional banks is their user-centric approach. An ideal banking app is swift, accessible, and intuitive in use, saving time and reducing effort. If it fails to live up to expectations, there are plenty of competitors to choose from.
Customer-centric digital banking is growing in popularity. Above 55% of respondents in the 2023 BAI Banking Outlook survey would switch banks for upscale mobile services. This would also be appreciated by Gen Z and Y, the majority of which rely on mobile financial applications.
Digital CX directly impacts client satisfaction and loyalty, giving a brand a big competitive edge. Returning customers drive growth in revenue and the overall profitability of FinTech solutions.
Banking CX: Key customer expectations
Digital apps become more and more sophisticated, and customer expectations are evolving equally. The banking industry is not an exception to this trend, as clients wish for more tailored user experiences.
A FinTech app with bare functionality and nothing much to offer will no longer survive the competition. To get ahead and retain the client base, financial entities are embracing modern approaches to banking app design.
Below are listed some of the core expectations regarding digital banking and customer experience:
Streamlined account opening
Gone are the days of visiting a local branch and doing paperwork to open a banking account. Present-day financial apps are expected to deliver a simple, smooth, and user-centric account setup. Minimizing the required steps while keeping them concise and informative is essential to client fulfillment. The onboarding should be fast, simple, and safe to reduce dropout rates.
Easy accessibility
As mobile banking is expanding, the focus of customer experience in financial services is moving to highly compatible app design. Checking one’s financial activities should work top-notch on most portable devices. Additionally, using such an app shouldn’t require clients to be tech-savvy. A user-friendly interface, responsive design, and quick loading contribute greatly to the positive perception of the product.
Customized services
There are so many tailored services that a modern FinTech app can provide; from budgetary advice to a personal AI assistant, the possibilities are plentiful. Matching the clients’ needs and highlighting the most in-demand features is what defines customer experience transformation in banking. The right approach will guarantee higher client engagement and loyalty, creating deeper, meaningful connections.
Data security
With the amount of sensitive information involved in financial operations, a banking app must offer advanced safety measures. Personal client data, transaction history, and account details must always remain well-protected and confidential. For this reason, encryption, multi-factor authentication, data backup, and other security procedures are paramount to such apps.
8 trends reshaping customer experience in digital banking
As digital banking is rapidly expanding, customer demands are increasing accordingly. In general, online banking is becoming more intuitive, efficient, and client-centric.
The emergence of new tech, such as advanced AI solutions, also influences the banking landscape. The current-day engagement techniques (gamification, social banking) affect the loyalty of the customer base.
Let’s dive into the top 8 customer experience trends that are shaping the future of digital banking:
1. Hyper-personalization
Banking can be much more than routine and repetitive tasks. The FinTech apps of today are introducing plenty of new ways to cover their customers’ personal needs. One such trend is hyper-personalization of digital banking services.
Where the default personalization relies on targeting customer groups, hyper-personalization focuses on individual clients. This impressive achievement is made possible by combining projective analytics with AI and automated learning. Immediate usage information, such as search preferences and consumed content, allows banks to create individual marketing campaigns. The latter would contain tailored financial offers, such as loans, investments, savings plans, etc.
Statistically speaking, half of digital banking clients are counting on their providers to deliver highly personalized customer experiences. With an astounding potential for boosting profit, hyper-personalized financial marketing is set to conquer the industry.
2. Digitalization of services
From onboarding and self-service to interactive support, digital innovations are actively reshaping the industry. Visiting a local bank is becoming obsolete, especially with the tech-savvy Gen Z and Y clients. A successful app must provide a viable alternative to old-school banking and go farther than that.
Let’s take account opening and onboarding as an example. Instead of tedious paperwork and potential ‘bottlenecks’ for bank employees, financial apps offer automated registering. The customers can now provide essential information without even leaving home. Another plus of online onboarding is the speed with which the client’s data is processed. The faster they can set up a financial account, the better the overall CX.
Digitalization in finance serves a dual purpose, making banking more accessible and boosting the FinTech outreach. This evolution not only enhances customer experience but also paves the way for brand-new solutions and services.
3. Artificial intelligence
AI is actively reshaping many spheres, including the financial services industry. It has led to the emergence of impressive technologies, such as personalized authentication or hyper-tailored financial assistance. Needless to say, missing out on this trend could be detrimental to a modern FinTech app.
One of the areas very positively affected by AI is transaction security. Most, if not all, clients would want their financial app to be strongly protected against fraud. AI technologies can detect malicious activities in real time by processing and analyzing multiple factors. Risk profiling also makes the list of what AI can do to improve banking CX.
Another example of AI-driven innovation is a support chatbot that helps sort out clients’ issues. Rather than having to wait on the phone, they can now interact with an AI assistant. The latter will evaluate information from diverse sources and provide initial help.
Read also: Examining AI Uses in Banking & Financial Services
4. Embedded banking
This CX trend involves integrating banking services within non-banking platforms or apps. The goal of such integration is enhancing the customer’s journey without the need to switch between platforms. Embedded banking eliminates the boundaries between financial and everyday online interactions.
A practical instance of this trend would be storing payment information and completing transactions within a non-financial app. The Starbucks app by the global coffeehouse chain has been praised for enabling these features. In addition, it supports mobile payments, P2P transfers, and tipping. While not a banking app per se, it perfectly showcases the capacity of cross-platform integration, optimizing customer experience.
If we look at the numbers, embedded finance products are estimated to comprise 50% of banking revenue growth. Regarding CX value, they offer an excellent solution to meet the evolving client preferences.
5. Customized financial advice
A lot of banking clients would want their money to work for them. However, the fund management advice offered by websites is often too general to be of true value. Banks, on the other hand, have the advantage of collecting and assessing client information for targeted assistance.
Current-day CRM technologies enable building a detailed client profile. By examining financial habits, transaction histories, and other relevant factors, banks can focus on a specific case. The next step would be offering the client a personalized savings account or investment opportunities. If the client struggles with meeting their financial goals, in-house advisors can also provide targeted assistance.
Data-driven financial support enhances user trust, engagement, and brand loyalty. It is a powerful cutting-edge tool for improving CX in banking.
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6. Transparent data management
No user of a banking app would want their personal or financial data to be compromised. The transparency in collecting and utilizing such information is highly expected by the customers. Open and clear messaging on data usage is paramount to online banking CX.
An important component of this practice involves obtaining consent from the user. Clients should know in what ways their private data is being utilized by banks, especially for marketing or analysis. Empowered by this knowledge, they are able to adjust privacy settings and make more informed decisions.
Additionally, digital banks need to put forward zero-party data gathered from volunteer customers. This data is normally more precise and gives valuable insights into the client preferences. Data sharing in this case can be incentivized by offers and rewards.
7. Proactive engagement
Innovative data collection methods have allowed banks to diversify their customer engagement practices. Instant support with fund management and tips for further growth are becoming the new norm for banking apps. This approach is aimed at enhancing CX with helpful and responsive banking services.
The key elements of proactive customer engagement are education, notification, and surveying. Banks can assist their clients in making better financial decisions and keep them updated about transactions. They can also proactively collect feedback to improve their services. Tailored alerts, messages, and recommendations enhance user experience, building loyalty and trust.
Banking apps that create a more positive and interactive user environment enjoy a higher competitive advantage. As digital technologies become even more common, humanizing user interactions will foster greater dedication from the customers.
8. Socially beneficial banking
The global financial landscape is dynamic, and digital banking clients may be negatively affected by its fluctuations. Here’s where social banking can make a real difference by helping with personal savings and avoiding risks.
Personalized alerts, timely advice, and financial wellness tools demonstrate the bank’s investment in customers’ financial health. Making digital banking more accessible and removing unnecessary barriers is yet another way of “doing the right thing”. Environmentally friendly strategies, for instance, adopting green data centers and energy-efficient tech, are also part of responsible banking.
Prioritizing clients’ needs is vital for long-term retention. A banking app that meets, and surpasses, customer expectations is set to remain prominent in the market.
3 online banks that provide top customer experience
Certain banks have taken CX to an entirely new level. They stand out due to their commitment to accessibility, transparency, and innovative technologies. By prioritizing clients and providing seamless online experience, these banks have raised the bar for the entire industry.
Let’s explore the 3 banks that understand what defines an exceptional banking customer service experience.
JPMorgan Chase
This prominent U.S. bank scores high on the CX chart with its user-centric mobile app. On top of that, it offers swift customer service and a complimentary electronic payment service. The bank was also lauded for its fresh instructional video series for clients with a popular comedian.
Another instance of the bank’s success with CX is personalization. Tailored financial insights, product recommendations and incentives showcase how to improve the customer experience in online banking. Users who dine out a lot may receive special offers and cash returns for restaurants. Likewise, a client planning to buy a house may get mortgage content and useful tips.
The biggest bank in the world by market capitalization (2022), JPMorgan Chase has been keeping pace with trends. Where other traditional banks rely on tried and tested methods, its executives are taking an extra step forward. The impressive achievements regarding CX are a solid proof of the brand’s ongoing success.
Capital One
This bank has made history as a frontrunner in delivering top-notch customer satisfaction. Adding digital wallet and contactless transaction features was a strong start, followed by the integration of innovative AI tech. Whenever a client requested to make a digital deposit, an AI-empowered assistant would be all ready to help. The virtual support throughout the ecosystem was designed to facilitate and simplify CX.
Financial literacy is another area where Capital One shines as a modern digital bank. It offers various calculators for making informed decisions, as well as upscale fund management tools. The bank provides its customers with a wide range of articles, blog posts, and educational video content. The ultimate goal is to empower clients, boost their confidence and trust.
Capital One was named twice on the 2023 Most Innovative Companies list by Fast Company. This serves to prove its commitment to digital development and pushing the boundaries. Loyal and trusting customers all across the U.S. are a direct outcome of its CX strategy.
Monobank (Ukraine)
An all-digital neobank with an impressive record, Monobank has redefined the industry landscape. User-friendly app, innovative tools, and other CX strategies have become a resounding success. As of June 2023, Monobank claimed the #3 spot among the top finance apps in the country.
The bank is renowned for its focus on gamification in financial services. Transforming the routine, boring tasks into exciting games with rewards has boosted daily visitation and retention rates. The other tools cover budgeting, contactless payments, account management, and more, underlining the importance of customer experience in banking.
Monobank is actively seeking client feedback to refine its services and make them even more relevant. In-app feedback, surveys, and social media engagement are only a few of the channels open for connection. Such dedication to clients has made Monobank the number one choice for millions of users.
Read also: Gamification in Banking: Best Practices to Drive Customer Engagement
3 tips for enhancing CX in digital banking
The FinTech industry is constantly evolving, and so do customer experience technologies and strategies. As switching banking service providers grows more common, fostering loyalty is becoming vital. Improving customer experience in banking is one of the core elements of this process.
How to enhance customer experience in a modern financial app? The following CX trends are set to improve client satisfaction and retention rates:
Online onboarding
The faster the client can complete onboarding, the more favorable impression a FinTech app will leave. A smooth and streamlined account setup is the standard of present-day digital banking.
Each step of the onboarding process should have clear and concise instructions without overcomplicated terms. If there is an option to pre-fill the fields with information, it should be leveraged. Real-time assistance during onboarding will help the client with their questions or concerns.
Another step to better CX is the incorporation of video guides to explain complex concepts. A wide choice of verification options (ID scanning, FaceID, etc.) will also be appreciated.
User-centric app design
The app’s interface is what can make or break its popularity. Confusing, mobile-unfriendly platforms are increasingly unlikely to attract loyal customers. For this reason, app developers must make their products feature-rich but at the same time seamless in use.
Any unnecessary steps to completing an action should be eliminated from the flow. Checking balance and transaction history should be easy and accessible to everyone. Intuitive interface, efficiency, and optimization contribute to the positive and memorable CX. This, in turn, encourages client loyalty and prevents people from switching banks.
Automated customer support
AI chatbots, CRM and automation workflows are the present, and future, support within banking apps. Using AI to sort out the client requests and potentially help with issues will unload the manual support. The latter will be able to focus on important cases, which will create a win-win scenario for everyone.
AI assistance is much more flexible than FAQs or lengthy blog articles in terms of financial education. Customers who are financially literate are able to make more informed decisions in fund management, investments, and other areas.
This helps them build their wealth with confidence while staying dedicated to their banking app of choice. Automated support is one of the essential tools that are improving the customer experience in banking.
In conclusion
Customer experience (CX) in digital banking serves to increase product satisfaction by anticipating and fulfilling client needs. In many cases, it determines the degree of loyalty for a financial brand and, consequently, its market value. The core expectations for banking app CX involve a seamless account setup, accessibility, personalized services, and data security.
The trends that are actively reshaping digital CX include
- hyper-personalization,
- digitalization of services,
- artificial intelligence,
- embedded banking,
- customized financial advice,
- transparent data management,
- proactive engagement, and
- socially beneficial banking.
Planning to design a user-centric, highly accessible banking app with top CX? Our professional developers draw inspiration from the best online banks and their innovative solutions.
How to get started?
The product discovery phase is the best first step you can take to lay a solid foundation for the development of your banking app. It includes a functional specification, UX/UI design, and a visual prototype that will give you a clear vision of the end product. On average, this phase takes 4-6 weeks.
The product discovery phase can help you:
- define a full scope of work and develop a roadmap for building an application
- set a realistic budget for your MVP and plan your resources
- test the waters with your audience using a visual prototype
- craft a convincing investment pitch
- get to know your team
We at Eastern Peak know exactly how to create a FinTech app that fosters loyal and returning customers. Contact us for more detail – and step into the future of digital banking!
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About the author:
Alexey Shalimov, CEO at Eastern Peak
As CEO at Eastern Peak, a professional software consulting and development company, Alexey ensures top quality and cost-effective services to clients from all over the world. Alexey is also a founder and technology evangelist at several technology companies. Previously, as a CEO of the Gett (GetTaxi) technology company, Alexey was in charge of developing the revolutionary Gett service from ground up and deploying the operation across the globe from New York to London and Tel Aviv.
