Banking on customer experience: traversing the mobile-first technology landscape

The explosive growth in digitalisation in recent years is dramatically transforming financial services. Long gone are the days when customers had to queue at their local branch to accomplish banking tasks. With the likes of Amazon, Uber and Netflix fuelling an ‘on-demand’ economy, offering instant gratification at the mere tap of an app, customers have come to expect the same level of digital convenience and accessibility from their bank. 

It seems inevitable, then, that mobile has emerged as the channel of choice for customers, with Statista estimating that seven in 10 banking account holders use their mobile phone to process their banking, up from 63% in 2019. 

For banks, this means pivoting to a mobile-first approach to increase customer engagement. But while many do a good job, taking an approach that differentiates their customer journey can be very challenging. According to the American Bankers Association, 43% of customers rated their mobile app experience as “excellent” and 37% rated it “very good” making it considerably more difficult for banks to stand out from the crowd. 

The rise of challenger banks and fintechs has only compounded the pressure legacy banks face. In just a few short years, these digital-first competitors have shaken up retail banking, raising the bar for customer experience. 

For banks, the challenge now lies in not only offering mobile banking but creating a mobile-first customer experience that meets customer’s changing needs. Banks that do this at a best-in-class level have shifted the focus from static, transactional experiences to offering personal and meaningful content that reflects a deep understanding of the customer, along with the ability to optimise those interactions. And tech-driven, customer-centric banks seem to be winning the race. 

Take Monzo as an example. The digital bank became the second most downloaded banking app of 2023. Its appeal comes not from products but its vast functionality, 24/7 access and an online forum where customers can raise concerns or suggest new features, all within the convenience of an app.

As Chris Little, Chief Revenue Officer at mortgage software provider Finova, explains: “Digital leaders must adapt to changing customer expectations and invest in flexible customer portals as well as more dynamic decisioning engines, so they can provide a more personalised experience.

“Banks that fail to keep up with digital demands could miss out on winning over new customers. In fact, they risk losing their current customers, who will vote with their feet and choose a more modern provider.”

Advantages of a mobile-first CX strategy 

There are many strategic advantages to a mobile-first customer experience. Alongside offering customers a holistic view of their finances, mobile apps that recommend tailored services to help customers set and reach their financial goals can build an emotional connection with their customer, leading to higher levels of customer satisfaction and loyalty. 

But a mobile-first strategy is not just advantageous for customers; it can prove equally valuable to banks. Customers who engage with recommendations and products to improve their financial health are much more likely to be interested in cross-selling and upselling. According to Fiserv, the average number of product holdings including loans, credit cards and mortgages immediately increased after a customer’s adoption of mobile banking.

What’s more, banks can reduce their overhead expenditures and save on operational costs by automating processes. First Direct’s recent launch of chatbot ‘Dot the Bot’ now sees one in four mobile chat queries answered solely by Dot, scoring an approval rating of 92% and placing it on par with its human counterparts on the phone.

But banks should be careful not to confuse mobile-first customer experience with mobile-only. Customers want a seamless omnichannel experience so banks need to make sure they strike the right balance, considering improvements across all channels and making it easy to switch between them. 

Fortunately, the beauty of mobile banking is that it offers banks an invaluable feedback loop thanks to the wealth of data it generates. Being able to analyse different factors from session length to transactions and abandonment rates can help banks map their performance and take steps to improve their customer experience. 

The digital world has rewritten the rules of customer expectations. We are now well into the era of mobile-first banking, with financial services expected to live up to the demands of an ‘instant gratification’ economy. Providing a personalised and seamless omnichannel experience is now a requirement, not a nice-to-have addition. Banks must ride the digital wave and meet customer expectations or risk being left behind. 

For mobile-first banks, artificial intelligence (AI) can be the key to having a critical edge over the competition by offering customers a seamless experience. 

In fact, a recent study, Talkdesk 2024 CX in banking survey: an industry benchmark, reveals that AI has a significant impact on the success of customer experience (CX). Those respondents whose organisation has made progress in its AI capabilities were more than twice as likely (86%) to say that delivering superior CX was a key differentiator for their organisation. The same proportion said they could deliver consistent CX across various channels.

Furthermore, the same study revealed that many of the challenges faced by customer-facing staff can be eased by AI and automation. The three biggest challenges noted were incomplete information about customers (89%), navigating too many systems, screens, or applications (77%), and navigating too many processes (76%). The ability to provide a sleek, seamless service, says Rahul Kumar, VP and GM of financial services and insurance at Talkdesk, requires thoughtful investment into technology and banking-specific workflows, with  50% of the company’s resources allocated to research and development. 

“We were born as an innovative disruptor in the contact centre space,” says Kumar. “When generative AI was a buzzword in the industry, Talkdesk was already working on GenAI and infusing it into our platform. We were able to bring in some of the low-hanging GenAI features, like the auto-summarisation of calls.”

Automate, empower, illuminate

Talkdesk’s AI philosophy rests on three pillars – ‘automate, empower and illuminate’. Automate, for instance, means ensuring that a customer is connected to the right person at a bank, according to their intent, without wading through multiple menu options: “AI can really streamline that navigation routing experience, connecting you to the right person the first time,” says Kumar.

Empowering employees, he adds, means giving them the contextual data they need as it happens. Kumar says generative AI and large language models (LLMs) can quickly and contextually retrieve the relevant information, irrespective of where it exists in a database, in real time. Contextual knowledge retrieval coupled with intent detection – knowing what a customer wants or may need – saves the employee time and effort, making the entire process more efficient.  

“AI can shave away 40% of the time employees spend writing up a conversation manually. For banks, this could turn into millions and millions of dollars in savings,” says Kumar. “Because you’re not relying on a person to be able to contextually summarise an entire conversation, using AI allows for standardisation throughout the organisation because all the notes are similar. You can run analytics and derive insights from the data which helps illuminate any blind spots that you might encounter.” When employees are not empowered, warns Kumar, there is no way to be confident that the customer experience delivered meets the expectations of the end user.

Customer life cycle

When generative AI became an emergent feature for mobile-first banks, the ability to stand out from the crowd also became imperative. 

Weaving technology through the entire customer life cycle to understand how to best meet the person’s needs is an ongoing priority for Talkdesk and its banking-specific solutions. Any new, or improved, functionality must add value for the end-user, and reflect the needs of banks large and small. Indeed, more than eight in 10 respondents to Talkdesk’s aforementioned report say CX is a leading driver of customer loyalty and deposit retention at their bank. 

This stance is reflected in McKinsey’s 2023 report, Five ways to drive experience-led growth in banking, which states that onboarding and issue resolution journeys tend to present the greatest opportunities to improve CX. McKinsey’s report states: ‘Most journeys fall into the de-friction bucket, as streamlined, seamless experiences still matter and drive customer satisfaction. However, our research shows that the “bookend” journeys of shopping, onboarding and problem resolution disproportionally drive the overall experience that a customer has with their bank.’ 

But there is no one-size-fits-all solution. Talkdesk must take into consideration the nuances of each industry it serves – for instance, a call centre capability for a bank will be vastly different to that of a financial services or insurance client. As a result, the company has built dedicated and distinct products for banks and insurers. The goal is to offer customers prescriptive solutions for issues that occur frequently. 

Deloitte’s report, Digital Banking Maturity 2022, affirms the pertinence of this approach, citing user experience (UX) as a key differentiator: user experience of digital banking channels can be as important to customer satisfaction as the scope of functionalities implemented. New features bring the most value to clients when they are added according to a well defined strategy with a focus on UX.

Seamless omnichannel functionality

In a world where customers access banks via numerous possible digital avenues, it’s vital that the experience should be as smooth as possible with no unnecessary, time-consuming false starts or re-routing along the way, stresses Kumar. For example, enabling a customer to begin an interaction with their bank on a laptop and call back later by phone to continue speaking about the same issue without having to go back to square one, is a priority for Talkdesk. 

Switching between channels need not be a painful experience, adds Kumar, who stresses that when CX is working optimally, it should be a ‘white-glove experience’ – whereby clients’ expectations are not only met, but are surpassed. According to the 2024 Talkdesk bank and credit union contact center benchmark report, two-thirds (67%) of current banking customer support interactions are resolved during first contact. In three years, that number is expected to increase 14 percentage points to an impressive 81% of all support interactions resolved at first contact.

The power of using one platform means data is centralised, giving banks a cohesive overview of the impact that AI is having on CX – and the knock-on outcomes such as customer retention or churn. “The foundation of customer experience needs to be built around data,” says Kumar. “Banks need to really think about how to aggregate data and centralise it so they are able to actively extract any true value out of any AI investments that they make. Certain platforms allow you to aggregate your customer interactions centrally. This gives you the capabilities to mine and analyse the data to derive the insights you need to deliver the personalised experience your customers expect.”

AI can retrieve and analyse customer data in real-time, which can enable personalisation and knowledge retrieval, as well as detecting intent and then offering real-time solutions.

But Kumar argues that while some parties argue they are already doing the latter, working with fragmented systems absorbs time and resources. “AI and CX need to co-exist,” says Kumar. “It’s not a matter of thinking about ‘if AI is coming’. AI is already here. It’s about how to pragmatically leverage AI to deliver some of the objectives organisations have.” 

Banks, says Kumar, often struggle to keep track of what is happening in a contact centre. AI can also help identify whether, for instance, customers are struggling with an online banking application, which will flag the relevant team to address this. 

“My overall message to banks is to not implement data analytics and a mobile-first strategy in isolation,” says Kumar. “Think about the overall customer journey and exceed the expectations of your customers – think about how you can deliver the best white glove experience possible for your customers in this digital-first, mobile-first era that we are in. And, finally, be smart in the way that you are making investment decisions, which are more platform oriented than just throwing a capability at a problem.” 

Thinking cohesively about AI and CX can enhance the possibilities of your tech investments and, in turn, elevate the customer journey. Banking leaders must consider where AI can infuse their current objectives and implement actionable insights to achieve a competitive customer experience worthy of the 21st century.

In today’s competitive landscape, digital innovation has become a key differentiator for financial institutions. The last few years have seen an explosion of digital-first businesses across all industries, driving consumer demand for greater convenience and instant gratification. Take Amazon as an example, which through its customised content and personalised experiences has revolutionised the way people shop. With tech-centric companies transforming our daily lives, it is little wonder that consumers have come to expect the same of their banking experience. 

According to Finder, 86% of UK adults use some form of online or remote banking and more than half use mobile banking. Against this backdrop, digital innovation has risen up the banking agenda, with leaders feverishly increasing their spending on technology. Data from Statista revealed that in 2022, the banking, finance and insurance industry in the UK spent $516m on software, with this figure expected to hit $537m this year. 

Yet, despite vast investment, research suggests that banks are falling short of customer expectations. A study by 10x Banking showed global banks are losing a fifth of their customers due to poor customer service. 

It begs the question, what do banks need to achieve success with their digital innovation? The answer is clear. Investing in technology and products alone will not cut it. What will set banks apart is the way in which they utilise digitisation to drive convenience, deliver personalisation and provide a seamless omnichannel experience. Doing so requires a radical cultural shift across the entire organisation - one that places customer experience, rather than profit, at the forefront of any transformation. 

But change does not come without its own challenges. Traditional banks are often constrained by legacy technology, a lack of agility and organisational resistance to change. While banks may approach digital transformation projects with zest and enthusiasm, many often underestimate the complexities involved and interest can soon wane when problems appear or costs start to spiral. According to McKinsey & Company, only 30% of banks have successfully implemented their digital strategy, with the majority falling short of their objectives.

Rob Morgan, spokesperson and chief analyst at Charles Stanley, says: “It’s not always easy to build streamlined processes on top of legacy systems and processes, especially when safety and security are paramount. Businesses often need to overcome a lot of roadblocks to realise their ambitions but ultimately the industry needs to keep pace with universal advances in digital user experience as far as possible.”

Digital leaders must champion customer experience

To remain competitive, banks must rethink the way they approach their innovation projects. Digital leaders in particular have a pivotal role to play in driving excellent customer experience across the organisation.

A customer’s banking experience often includes various journeys, from onboarding to product activation and transactions all the way through to problem resolution. Successful digital innovation requires banks to understand a customer’s end-to-end journey, including their behavioural patterns, engagement levels, pain points and most importantly, their needs. 

A significant hurdle often seen among larger financial institutions is that digital projects are adopted in silo, with different departments working at differing stages of development and governed by separate goals and processes. However, this approach risks creating complexity, friction and a disjointed customer experience. 

Success requires multi-department collaboration, including commitment and drive from all corners of the organisation to move in the same direction and break down silos. Digital leaders need to communicate a consistent, customer-centric approach right across the bank, understanding what customers want and need from their digital banking experience and ensuring that every department, process and customer offering is centred around those needs. 

By embedding a culture that places customer experience at the core of an organisation’s goals, digital transformation will move beyond technology for the sake of technology. Its primary purpose will be to create a holistic and seamless experience for customers that meets changing expectations. 

This means digital leaders will need to think about the different needs of their customer base. As Morgan points out, great customer experience is something of a “balancing act” and businesses must be agile enough to keep pace with digitally-driven customers, while being careful not to leave their less digitally-enabled base behind. 

“This calls for carefully thought-out processes, interfaces and service lines that cover a variety of client needs, levels of digital experience and varying financial knowledge,” he explains.  

Banks will need to go that extra mile, thinking about ways they can help customers feel supported, empowered and engaged. The top four banking brands in the UK, as ranked by research and advisory group Forrester, have multiple always-on routes for customers to get in contact with them. This includes mobile apps, 24/7 phone lines and chat bots. 

In today’s digital age, customers have come to expect a connected, seamless omnichannel experience that flows from one part of their banking journey to another. Digital leaders in financial institutions will need to ensure that their online and mobile banking offers a personalised customer experience to deepen engagement. According to Forrester, a hybrid customer experience scores highest for emotion, which in turn drives loyalty. Digital leaders should therefore think about how best to create empathy and impact across the entire customer journey, including a seamless experience across all channels and devices. 

As the old adage goes, what gets measured gets done and fortunately for banks, they have access to vast volumes of data. Digital leaders should use analytics, artificial intelligence and big data to personalise customer’s experiences and proactively recommend products and services that are relevant to their individual circumstances. 

“The key to effective customer experience is to ensure that it is fundamentally customer led and is a result of extensive testing and feedback loops,” explains Mr Morgan. “The digital marketplace in financial services is competing with other industries so development is a constant, iterative process and never a ‘one and done’ scenario.” 

With appetite for digital innovation and superior customer experience showing no signs of slowing, banks find themselves in a do-or-die situation. Making customer experience the driver of digital innovation will not be an advantage, it will be a matter of survival.