More science than art: A 3-part formula for greater banking CX

After a tumultuous 2023, it’s no surprise that banks are laser focused on growing deposits. According to the BAI Banking Outlook: 2024 Trends report, it’s their number one business priority.

However, attracting new customers, much less retaining them, is challenging without an excellent customer experience (CX). And only 11% of banks say they deliver on that front.

That reality doesn’t just threaten to upend banks’ investments this year. It risks driving current customers away. Consider the digital banking experience: 40% of customers would switch financial institutions for better digital capabilities.

Banks need a concrete strategy to improve their CX to grow deposits. Whether you want to win commercial or retail customers, I’ll walk you through a three-part formula any bank can use to create an experience customers will love.

1. Understand the Data You Have and the Data You Need

Great banking CX starts with gathering data on customers’ needs and frustrations at every stage of their banking relationship. More specifically, that means you need data on customers’

• Onboarding experience: How much guidance do you provide commercial banking customers after their first 90 days with your bank? Do you field frequent questions about a specific product or service (like your payroll software)? These factors hint at whether you’re onboarding customers effectively.
• Digital service adoption: How often do customers use your mobile app and website? What services do they use most: Mobile check deposits? Autosave? Your treasury management tools?
• Potential cross-selling opportunities: For example, are there specific triggers (a new life stage, a spike in deposit amounts, etc.) that signal a customer could use a new line of credit or a high-yield savings account?
• Core loyalty drivers: Why do your loyal customers stick with your bank? What are the top reasons customers leave?

The good news is that you might already have much of this data – e.g., if you have an onboarding checklist or capture customer support interactions.

However, at many banks, this data lives in silos. Your brokerage arm, for instance, might have information on high-net-worth customers. However, the credit card team might not have access, so they can’t use that information to personalize a credit card offer.

So, you need more than just the correct data. You must unify that data so customer information is accessible across every team. The result will be a more holistic picture of customers’ needs.

2. Use Customer Data to Personalize the Banking Experience

This step seems intuitive. But I can’t tell you the number of times I’ve filled out a bank questionnaire – like after moving money to a different financial institution – with zero action or follow-up from the bank.

That experience is far too common. Although many banks successfully collect CX data, they often don’t use it to tailor products, offers, and services to customers’ expressed needs.

For example, suppose your data shows that commercial customers routinely have questions about your cash flow management software. In that case, you might build in a guided onboarding workflow with educational tooltips to go deeper.

And if a retail customer has put away tens of thousands in their savings account, consider sending them information about a CD so they can get a higher interest rate. If you don’t, they might find one at another bank and move their money there.

Much of the work here will require technology that lets you build a cohesive customer profile and manage the customer experience across every channel. A digital experience platform (DXP) can do this job well.

Think of a DXP as a collection of tools to gather, learn from, and react to customer data on your digital platforms. A DXP often includes multiple pieces of API-connected software (a content management system (CMS), customer relationship manager (CRM), customer data profile (CDP), personalization engine, predictive analytics tools, etc.) that create a unified customer-facing experience.

Mix and match your DXP components to build a stack that best suits your customers’ needs. If you want to do more with your customer data, DXPs are a powerful way to personalize and upgrade your CX without a full-system rip and replace.

3. Continue to Capture Customers’ Evolving Needs

Even with the best CX data, customer needs are constantly changing. Customer demands today may differ from those five to ten years from now.

Just look at the payments space, for instance. A few years ago, customers were content with a bank connected with PayPal or Venmo. Now, whether consumers or business owners, many want the ability to make faster payments directly from their bank app (e.g., through a Zelle integration or FedNow).

The bottom line is that you should refrain from collecting CX data for specific, short-term purposes. Invest in a digital infrastructure that lets you understand customer needs as they evolve so you can continue to provide a competitive banking experience.

Don’t Let Up on Your CX Investment

This year, CX investments will take a backseat to deposit growth and customer acquisition. But the truth is that a great CX opens the door to both those possibilities. It’s incumbent upon bank leaders to keep CX front and center—the end goal being an experience that makes customers want to join and stay with your financial institution.

David Ritter is Director, Financial Services Strategy at CI&T.