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Essential resources for banking executives:Enter ‘Banking Reinvented’

How digital transformation is driving customer experience

Ensuring your customers are happy with the digital services you provide is pivotal to gaining loyal and repeat customers.

by Mayur Vichare


Understanding how digital transformation is driving customer experience is crucial for ensuring that your customers are happy with the digital services you provide, thereby cultivating loyalty and encouraging repeat business.

You might think your customers are happily using your banking services, but have you really checked if they’re completely satisfied? Making sure you’re offering a top-tier digital banking platform is often one of the main drivers behind their satisfaction. Getting to a level where you truly understand your customers’ motives and actions will lead to a better experience for them.

In this blog, I’ll take you through some of the key insights, from a value consulting perspective, on how you should tackle digital transformation to power a better customer experience and in turn lower your costs.

Understand what channels your customers want to use

A McKinsey survey found that digital adoption increased by 14% in Europe in May 2020. The consultancy also noted a rise of 10 to 20% in digital banking across the region the following month. This shift in the rise of digital self-service, web, and mobile use also coincides with the necessity to do so because of the pandemic.

Making sure you have a platform that offers users a seamless and holistic experience on both web and mobile devices is key. However, some markets still demand in-branch experiences. This is something that banks can’t ignore and still need to cater to or else the customer experience could be tainted.

The ways our value consultants seek to understand this crucial element is through a selection of approaches:

  1. Surveying customers: By conducting a research assessment of your customers you're able to gain insights into their behaviors and what they truly value in life. While you're doing this, you'll need to uncover where they’re spending most of their time — is it on mobile, web, or in person at a branch?

  2. Segmenting customers: This involves breaking down your customers not only from an age perspective but also from a psychographic standpoint. For example, in Japan, we built a persona map for a customer to unearth their common behaviors and what channels they used for specific purposes. As you can see below, it highlighted that the majority purchased branded clothing online — meaning they're digitally savvy and spending most of their time on mobile platforms. While carrying out these exercises, an important KPI to keep in mind is trying to understand what the time spent is on the different channels. 

Persona map japan consumers

What journeys matter to your banking customers?

Offering banking customers painless and fast journeys will often increase their satisfaction and loyalty. A journey for a transaction dispute is often an area underpinned by banks across the majority of markets. Customers usually find it extremely difficult to raise a dispute or talk to a representative of the bank if they have questions. It can be frustrating and disappointing for customers if it’s too hard to get the help they need in a timely manner.

For example, what we're hearing from our customer base across the United States and the Philippines is that a lot of people are now turning to PayPal. This is because raising a dispute is a simple process and has a quick turnaround time. PayPal also covers shipping costs for returns, up to a certain amount.

At Backbase, our value consultants mostly use a two-step methodology to understand what journeys precisely resonate with your customers:

  1. First, is understanding what journeys make your customers most frustrated and also which ones satisfy their needs. Then, we look for a clear indication from your customers as to how they would like to solve the issues through research interviews.

  2. The second method that can be applied is looking at your internal data to gauge what customers interactions look like across various channels. Once this information is collated, you can then create a map that highlights which journeys they’re frustrated by.

Making sure you track the satisfaction score per journey and channel is key to creating a holistic picture. This is an element many banks fail to do, which means they never really have a true and whole picture of their customers’ journeys and frustrations.

Customer resolution impact loyalty

Don’t underestimate the value of your employees in delivering a great customer experience

With the trend edging towards digital-first, banks shouldn’t be so quick to dismiss the importance of employees when servicing customers. While digital technology is a brilliant tool, banks still need to concentrate on offering a personalized service with a human connection.

A Forrester case study on Navy Federal Credit Union uncovered how a great employee experience drives a superior customer experience. This example also highlighted how keeping things simple is valuable for improving customer satisfaction. Navy Federal rolled out a new auto loan process that took only 5 minutes to approve. It also worked with its members to co-create a mobile app so it could deliver the best experience possible.

Here are three ways you can start to improve your customer experience through your employees:

  1. Making sure you’re tracking how many administrative tasks they do. For example, an African bank has their relationship managers spending 85% of their time on administrative and onboarding tasks when they could be focused on value-based work like understanding customer needs and helping them discover the right financial solution.

  2. Have you armed your employees with the right technologies? This isn’t about replacing your employees but rather empowering them with the correct tools so they can offer customers a more personalized and engaging experience.

  3. Scaling your teams appropriately and ensuring they’re trained correctly with the most current digital skills will allow them to optimally perform, particularly post-pandemic.

The outcome? Lower acquisition and servicing costs

At the end of the day, if you use your digital transformation to form a more meaningful connection with your customers, they’ll be more satisfied with the services you offer. Once banks achieve a higher level of customer experience and thus satisfaction, they’ll start seeing increases in loyalty, which ultimately converts to lower acquisition costs. It’s much better to keep the customers you have happy than spend money trying to gain new ones!