Customer experience (CX) in financial services is undergoing a dramatic shift. Gone are the days when simply offering convenient online banking was enough. Today’s customers expect a holistic experience that prioritises their financial well-being and caters to their unique needs.

Aditi Subbarao believes we are on the cusp of generational change in CX, but how do we get there? Here, Aditi, the Global Financial Services Industry Lead at Instabase, offers valuable insights into this evolving landscape.

Building Exceptional CX

Aditi emphasises a move beyond basic transactions, highlighting a three-pronged approach to exceptional CX in the future: looking at who you engage with, the nature of the interaction, and how you make them feel during their experience. 

“If you actually think of what constitutes an experience, you could break it down into three parts, who or what you engage with, the nature of the interaction, and what you feel at the end of that experience,” offers Aditi. “Until now, banks have focused primarily on simplifying number two, which is the nature of the interaction.

“If you look over the last few years, there have been huge investments in increasing ease of use and accessibility: If you have a phone, you can interact with your bank, you can upload a selfie and open an account in three seconds, or you can have automatic answers from an AI chatbot and so on. All of that is very important and very necessary, but is it really sufficient? Does that truly cover a good customer experience overall across all of your customers and your entire offering to them?”

In the current climate, we are seeing a shift of focus from this second aspect, to the first and third. Financial services institutions are paying more attention to who they are engaging with, and what the experience leaves the customer feeling. 

“We’re seeing banks taking on a much more holistic role in the financial wellbeing of their customers,” explains Aditi. “So when you start a relationship with the bank, you are seeing more programs for digital enablement, how to plan and manage your finances, education around savings and investments.

“As far as customer experience goes, while it is easier to interact with your banks, the reasons you have to initiate an interaction and also the benefits you get from that interaction are also increasing.”

This shift leaves customers with a feeling that their bank isn’t only a necessity, but an adviser that is part of their daily lives, who has their best interests at heart. 

Personalisation is the Key

Personalisation is essential to building this approach, and the biggest challenge to creating this experience currently lies in gathering and interpreting the vast amount of customer data – financial and non-financial – scattered across various sources. 

“They need to know exactly what their customers need, and in order to do that, you have to understand everything you can about your customers, their financial circumstances, their life situations, their personalities, their spending habits, their shopping preferences, everything,” emphasises Aditi. “Has this customer just taken out a mortgage? Have they just bought a baby buggy? Maybe we need to make connections to a health insurance provider that can potentially insure children for free.” 

The financial landscape is more complex than ever, with a wider range of customers and product offerings: working solely on the basis of what traditional demographics need will no longer suffice. Understanding the needs of Gen Z, millennials, and those with alternative investment strategies requires a comprehensive data strategy. This data is the key to unlocking a truly meaningful experience.

“That understanding comes from being able to aggregate, access and then interpret all the vast amounts of data about your customers, both financial and non-financial data from everywhere that it currently lives,” highlights Aditi. “It might be across the internet, across shared folders within your organisation, across cardboard boxes with handwritten notes stored in your walls.”

The importance of understanding this wide range of customers isn’t limited to individuals looking to manage their finances, it stretches to include businesses. 

“What we overlook is that the interactions and experiences of huge enterprises with their banks, of massive institutional investors with their asset managers, all of them are also very important experiences for very important customers,” stresses Aditi. “The change we’re seeing happening across the asset management space, for example, is a great symbol of how banks and financial institutions are starting to think a lot more actively about customer experience across all different types of customers.

“As you look at this landscape, it becomes critical to be able to use and harness all of that data and turn that into meaningful insights that you can take action on.”  

AI: The Powerhouse of Personalisation

Whilst these challenges remain, the scope of opportunities presented by advancements like generative AI also hold immense potential for revolutionising CX, aiding in increasing personalisation. By automating data analysis and generating actionable insights, generative AI can transform the way financial institutions serve their customers.

“I genuinely believe that we are on the cusp of a massive change and a massive revolution happening in the space of customer experience,” enthuses Aditi. “I know in every part of banking people talk about massive change and massive revolution all dictated by technology, and that is actually true, but customer experience is a field which stands to benefit by far the most from the latest innovations in technology and especially in the AI space.”

The use of this technology will not only allow financial institutions to harness their data, but actually translate that into actionable insights on their customers. 

“You can pull all the data you have about your customer, every transaction, every conversation they’ve had with your organisation, combine this data with other data which might be available publicly and come up with a detailed, personalised investment plan for them while they are on the phone with your relationship manager,” considers Aditi. “You can completely influence what they feel at the end of that interaction, so I think the change that AI can bring in customer experience is by far the most exciting piece at the moment.” 

This level of personalisation positively impacts all three aspects of CX – the offering, the interaction, and the customer’s emotions at the end of the experience.

Looking Ahead

The future of CX in financial services is bright with some key trends to watch for in 2024 and beyond. Aditi believes we will see this across three areas, the widespread adoption of AI; more focus by both institutions and regulators on considerations around safeguarding and data security; and as always, an evolving market landscape. 

“As generative AI starts becoming more widespread and more used, the number of people who are accessing and using newer services and newer offerings will also increase,” offers Aditi. “I do expect to see a lot of change in the market, in the offering that different banks have and the offering that different institutions are providing their customers. That understanding of demand, understanding of requirements coupled with what banks are able to provide is definitely going to change the market landscape overall.”

As technology and demands continue to evolve, so too will the financial services industry. The focus on personalisation through the use of AI will not only enhance customer experience but also drive innovation and growth in the sector as a whole. 

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