Seventy seven percent of Canadians and 71 percent of US citizens use their online banking services at least every month. What’s more, 35 percent of consumers prefer non-traditional financial services like digital-only banks and stand-alone digital accounts as their primary service providers.

Despite these figures, there remains an ongoing preference for personal, human-centered interactions. Even among younger, digitally-focused customers.

This tells us that any transformation process intended to move touchpoints away from local branches and human agents should be labeled ‘Handle with care’ — your aim should always be customer-first, rather than digital-first.

In our journey towards a digitally empowered banking landscape, maintaining a robust customer experience is paramount. And as institutions evolve, it's imperative to ensure that customers feel supported and valued every step of the way. 

Here are some essential strategies to uphold a strong customer experience amid the throes of digital transformation.

Keep people in the loop

Nobody wants the digital banking customer experience to fall by the wayside during a digital enablement process. Yet we see failures come up time and again. What many of these failures have in common is a lack of communication and transparency for customers. This means people are left in the dark when they’re faced by a sudden loss of services that they'd relied on.

As you digitize touch points and processes, stay connected with your customers. Use multiple channels, like email, text, your website, social media (and even letters in the mail) to communicate. In an ideal scenario, your changes should be intuitive rather than disruptive. But, in some cases, it does pay to advise customers about milestone events. If you've significantly upgraded your mobile banking app and you're measuring uptake and feedback, that's an example of a change worth sharing. And worth celebrating, in fact.

Communicating proactively also allows you to take control of the narrative. This helps to contain the spread of false speculation. Significant changes to your engagement model without explanation can cause people to fill in the blanks themselves. And in a digital environment, that can have substantial consequences. You only have to look at the social-media-fueled bank run that caused Silicon Valley Bank to collapse in just 48 hours to know how valuable owning your narrative is.

Consider customer goals on a holistic level

What goals do your customers have, and how can you help them achieve those goals? Kunal Galav, Head of Partnership Development at Mambu, said this in an interview with

McKinsey:

“Banks must shift their thinking from rigid products to fit-for-purpose, customer-centric offerings. For example, customers don’t want to apply for a mortgage: they want to buy and live in a home. This fresh perspective will enable banks to reimagine products, customer journeys, and experiences.”

McKinsey research also finds that “significant percentages of home buyers in the US and the UK are either enthusiastic about, or open to, a digital ecosystem for home buying.” But, it warns a “narrow scope ignores the substantial value inherent in an end-to-end approach that embraces many more aspects of the homebuying process.”

If the customer's needs are not being met by digital banking — that is, if they can't see a

way to achieve their important life goals with your institution — they will change providers. However, if the changes you make represent shortcuts to achieving customer goals, then customers will stick around. 

What’s important, then, is shifting your perspective. Think about how you can automate those shortcuts, rather than simply automating your existing processes. This way of thinking will help ensure you don't digitize something that customers don't want or need, or a process that needs rethinking entirely.

Take a holistic view (a lesson from digital natives)

As has been well-established, digital enablement is not a purely technical issue. This 2022 research paper notes:

‍"[You need to] bring together the insights from information systems, marketing, strategic management, innovation, and operations management in order to make sound organization-wide decisions about how to respond to digital technologies and implement digital organizational changes."

For banks who want to lean into enabling transformation, it's not just systems that must change, but people, processes and customer experiences, too. In fact, the hallmark of new and successful challenger banks is eliminating traditionally siloed functions and blurring the lines between product offerings:

“Banks that remove silos can offer holistic propositions that mix products — including non-banking ones — through physical and digital touch points.”

— Accenture research report: ‘Banking Consumer Study: Reignite human connections’

This ties into the previous point: you need to take a zoomed-out view of the customer, of their goals, of how your products and processes can serve those goals. To go a step further, the likes of Revolut, Nubank and Monzo are successful in helping customers achieve their goals because they operate with a digital-first mindset and all that entails. As David Vélez of the “anti-bank” Nubank puts it, “We don't see ourselves as a bank. We're a tech company that happens to be in financial services.”

Digitally transform on a local level, too

Say you've decided to close several local branches to invest more in digital services. Are you sure that's going to actually deliver for customers?

The decision might save on brick-and-mortar costs. But, it amounts to very little if your customers leave in droves. Adobe found that 75 percent of US respondents value their local branch and 70 percent visited it in the last month. This says local branches do still matter, especially with the systems currently in place here in North America.

The good news is digital banking doesn't have to be so black and white.

Take BMO Harris Bank. It was initially founded as the first bank in Canada in 1817. Local branches are part of why people bank with BMO — especially those customers who have been with them for decades.

In 2019, BMO implemented automated check-scanning and easy PIN authentication innovations to over 500 branches. This saved branch staff considerable time that they could use to converse with customers more broadly about their banking needs. And, the changes even surfaced real-time customer data. So, staff were able to personalize recommendations further. This helped them deepen those important customer relationships.

Learn from those who went before

Let's consider another example, this time one without such a happy ending. Spanish-owned UK bank TSB learned its lesson the hard way when it was fined 49 million GBP (about 83 million CAD) in December of 2022. A botched IT migration and transformation project in 2018 left around two million customers unable to bank online, sending the systems into chaos.

Not only did TSB fail from a regulatory standpoint, but it didn't put contingencies in place to communicate the issues with customers. TSB's team reportedly anticipated some complaints — a few thousand — not the 37,000 they received. As you can imagine, millions in compensation payouts did not offset the loss of trust in the brand.

From this event, we learn two lessons:

1. Be ready for the worst-case scenario

TSB was ill-prepared to address any technical issues that arose during their transition. Whether you are changing IT systems or launching a new mobile app, put contingency plans in place. If you are prepared ahead of time — and your customers are well-informed of potential outages or disruption — then you will avoid panic and the inevitable fallout that follows.

2. Deploy phased roll-outs, testing with users

J.P. Morgan's Innovation Accelerator team follows fail-fast, fail-often principles. They go from concept to working prototypes ready for testing within six to twelve weeks, which they then implement in phases to specific user groups. It's a method that works. Deploy phased roll-outs of new technologies to prioritize continuity and maintain service standards. Test throughout and scale incrementally. That way, you minimize the impact if things go wrong, and you learn the best ways to support customers through change.

Winning over hearts and minds

In short, digital modernization should win people's hearts, not break them (and it shouldn't break the bank, either).

As change champions, we support financial service institutions to transform. And, we make sure your customers are along for the journey. Talk to us about how we can help you and your customers on the path to a digital future.