Composable digital experience platforms are a new generation of banking CX

Every bank understands the value of an exceptional customer experience. But just 4% of financial services leaders believe their digital offering meets the mark. Dig deeper, and the reason becomes clear: 72% of financial services customers only use personalized messaging. Given that many banks still rely on customer management systems that make personalization impossible, it’s clear that it’s time for change.

Enter composable digital experience platforms (DXPs). They’re a new generation of customer management systems that let banks deliver personalized customer messages – and even experiences – across every channel.

Key to this flexibility is the first word: “composable.” This new class of technology gives banks an unprecedented ability to deliver dynamic customer experiences that respond to evolving customer preferences.

Composable DXPs let banks stack best-of-breed software

Old-school customer management software promises a suite of powerful experience management tools in a single package: Content Management System (CMS), Customer Relationship Manager (CRM), Customer Data Profile (CDP), etc. But as the saying goes, a jack of all trades is a master of none.

More to the point, an all-in-one platform is simply not the right tool for creating personalized experiences at scale. And there’s no way to replace or upgrade specific components of a monolithic DXP without adopting a whole new platform. A composable approach offers an alternative.

Creating a composable DXP is like building a Lego house from scratch: Banks can customize their stack to fit their customer base and priorities. That means they can choose best-in-breed solutions for each element of the DXP.

What typically makes up a composable DXP? Most include…

• a CMS;
• a CRM;
• a CDP;
• a personalization engine;
• AI-powered enterprise search;
• predictive analytics tools;
• digital accessibility software.

On the back end, everything connects via APIs. Thanks to this modular architecture, banks can mix and match software to boost specific capabilities without disrupting their entire system. Banks can access all customer data through API connections when and where needed.

Composable DXPs enable deep personalization across channels

One of the most significant benefits of composable DXPs is the potential for deep personalization, enabling banks to use data from every customer touchpoint to support more granular segmentation.

Combined with marketing templates and predictive behavioral analytics, banks can create experiences fully customized to an individual’s circumstances.

For instance, you can serve different offers to customers in their mobile banking app depending on their customer profile (e.g., a new checking account offer for a college student versus a credit card offer for a young professional who has just set up direct deposit).

As these profiles evolve – and you gather more customer data – offers can also evolve. Suppose that a young professional declines the credit card offer. In that case, bank marketing might tell them about the credit-building value of regular credit card use, which can help them build their credit profile, making significant purchases like a home or car more feasible and affordable. If they engage with that content, a bank might follow up with a call from a representative offering a financial planning session.

You can deliver high-value services at each touchpoint that deepen the customer’s relationship with your bank. These personalized digital experiences also have powerful knock-on benefits. Each experience contributes to increasing customer lifetime value across your customer base – and can even reduce the cost of acquisition.

The key to execution: A modernized back end

Composable DXPs hold much potential for banks but only function when fully integrated with existing systems. To make that possible, many banks must ditch closed legacy systems for modern, API-based software across the organization.

The good news is that some banks have already made headway on that front. Thanks to the rising appeal of open banking, an API-first infrastructure is becoming more attractive and practical.

Even so, fully modernizing your back end is easier said than done. But you don’t have to do everything at once. For instance, you can start with a headless CMS and gradually add capabilities, like a personalization engine, that will most impact your digital experience.

DXPs can transform your customer experience

Composable DXPs are still new to banks. But one industry – e-commerce – has been exploring composable architecture for years.

Retailers that use composable commerce infrastructure can give customers more relevant search results, faster checkout, and targeted product recommendations. As a result, these retailers have pulled ahead of their competition. And the brands that stuck with old-school monolithic platforms need to catch up.

The e-commerce story is a testament to the power of composable architecture and the pitfalls of relying on dated monoliths. I expect a similar dynamic to play out in banking over the next few years.

As composable DXPs grow more popular, the early adopters will win a larger share of customers and nimbly adapt to their needs. The laggards will struggle to elevate their digital experience from average to exceptional – and customers will take note.

Young Pham is Chief Strategy Officer at CI&T.