Customer Experience in Banking: A Guide to Improve Trust & Satisfaction

It’s no longer enough for banks and credit unions to simply provide financial services. Customers expect to walk into a branch and want to immediately feel valued. From personalized services tailored to their needs to a welcoming space where they can do more than just deposit their checks. Needless to say, providing a memorable customer experience in banking should be a top priority for all financial institutions.

What is Customer Experience in Banking?

Customer experience in banking refers to the thoughts, opinions, and feelings customers have about every interaction with your financial institution. From visiting your physical branch to paying an electricity bill through your app, each interaction with a touchpoint contributes to a customer’s perception of your business. Without managing this customer experience properly, you risk losing clients, failing to acquire new ones, and creating a negative public image for your brand.

Importance of Customer Experience in Banking

We are currently living through times of financial worry. More than 65% of customers express pessimism over the economic outlook for the coming year. This shift in perspective is causing people to reconsider their financial needs and banking relationships. 

In fact, 15% of survey respondents said they are open to a new banking relationship, while 20% are already considering changing banks. Here are a few reasons why customer experience in banking is an even bigger competitive advantage than ever before:

1. It helps build trust during uncertain times. In a period of financial anxiety, customers are looking for institutions they can trust. Your bank can present itself as a reliable option by demonstrating a commitment to making their customer journey smooth and personalized.
2. It is a proven way of retaining customers. With many customers considering switching banks, a positive customer experience can be the deciding factor in retaining them. Consistently providing exceptional service can strengthen loyalty and reduce the likelihood of customers looking elsewhere.
3. It helps you attract new clients. With 15% of customers open to forging new banking relationships, consider offering a memorable customer experience. This gives your bank a significant edge in acquiring these prospects.
4. It enhances the customer lifetime value for your bank. Happy customers are more likely to use multiple products and services from the same bank. Focus on customer experience, to improve cross-selling opportunities. As a result, this can increase the overall value of each client relationship.
5. It enables you to boost your brand reputation. Customers who have a great experience with your bank are more likely to recommend it to others. The positive online reviews you receive as a result of your CX strategy will be beneficial to your financial services reputation management efforts.

How to Improve Customer Experience in Banking?

Improving the customer experience in banking relies on a complete understanding of customer behaviors and expectations. Explore key practices to consider for improving CX across different types of banking. Discover how to improve services in branch, commercial, digital, retail, and credit unions.

1. Customer experience in branch banking

You need to re-think the concept of branch banking in order to leap ahead of the competition and improve customer experience across all your physical locations. The following approaches will help you make the most of your bank branch to boost customer satisfaction:

• Create a “branch of the future” for your bank. Modern bank branches are transforming into consultation hubs. Focus less on routine transactions and more on offering expert financial guidance. Also, consider investing in self-service technologies such as interactive teller machines (ITMs) to handle basic transactions. Therefore, your staff can focus on offering personalized financial services.
• Re-design your branches to encourage customer interactions. Move beyond traditional teller lines and adopt open, flexible spaces where customers can comfortably discuss their financial needs with advisors. For instance, the Capitol One Café demonstrates how including community spaces in your branch is a great way to make clients feel at ease and view your brand in a positive light.

2. Customer experience in commercial banking

Commercial banking clients usually seek complex financial services, including lines of credit and foreign exchange transactions. As a result, you will have to adopt a tailored approach to improve their experience. Focus on the following steps:

• Assign dedicated relationship managers to clients. A great way to deliver a personalized and consistent service to a client is to have a relationship manager. This manager serves as the single point of contact for all their banking needs. From offering specific advice to identifying growth opportunities, these managers help foster trust and long-term partnerships.
• Adopt a consultative approach. Unlike traditional banks that simply offer products, you can stand out by offering consultation as well. This approach adds another layer of value to your services. It also helps you better understand the financial profile of the customers you are serving.
• Provide enhanced risk management and security. Needless to say, risk management is of utmost priority for commercial banking clients due to the nature of their transactions. Providing services like fraud detection, secure transaction platforms, and encryption will enable you to secure your customers’ data and transactions.
• Offer industry-specific solutions and insights. Whether it’s agriculture, manufacturing, real estate, or healthcare, having a team of experts who are knowledgeable in that sector can significantly improve the customer experience. By providing industry-specific insights, whitepapers, or reports on market trends, you can establish yourself as an authoritative bank.

3. Customer experience in digital banking

There is a growing willingness among customers to embrace digital banking because of its convenience. Customers who regularly use a bank’s smartphone app or website report higher satisfaction levels on average compared to those who infrequently use digital channels. These best practices will help you improve the digital customer experience in banking:

• Support digital transformation initiatives in your bank. Many customers are not yet fully comfortable with digital banking services. You can encourage digital adoption by offering in-branch or online tutorials. Your bank can also assign dedicated staff to onboard customers onto digital platforms to ensure a smooth transition.
• Provide digital literacy resources to educate customers. Offer regular digital literacy classes or webinars to help customers become familiar with banking apps, online transactions, and cybersecurity practices. This approach will help customers take full advantage of your digital services, making it more likely for them to be satisfied as a result.
• Invest in intuitive and user-friendly interfaces. If your banking app or website feels clunky or confusing to navigate, customers are unlikely to want to spend much time on it. With the help of an easy-to-understand digital interface, you can simplify user navigation and encourage higher levels of engagement with your service.
• Digitize account openings and loan applications. Allow customers to open accounts, replace cards, or apply for loans entirely online. Offer step-by-step tutorials and on-call support for any questions. Completing their banking tasks from the comfort of their homes is not only convenient for customers, but it also saves time and paperwork.

4. Customer experience in retail banking

Retail banking focuses on the individual customer’s needs. The following steps can help improve CX in this area to enhance both satisfaction and loyalty:

• Make it easier for customers to manage their accounts. From mobile apps to physical branches, each interaction channel for a customer should offer a frictionless and smooth experience. For instance, you can invest in a straightforward and user-friendly interface for your mobile app. This will make it easier for users to navigate. 
• Proactively communicate with customers. Keep customers in the loop with personalized messages about account activity, new products, or special offers. Regular communication helps build trust and keeps customers engaged with your services.
• Encourage long-term relationships with rewards and initiatives. Introduce loyalty programs to reward long-term customers for their continued use of your banking services. By offering benefits like cashback offers, you can drive both customer satisfaction and loyalty. Moreover, these initiatives can also help encourage feedback to accomplish your customer experience management goals.

5. Customer experience in credit unions

Credit union members expect smoother interactions than ever before. Follow these steps to enhance their satisfaction levels:

• Provide omnichannel customer support. Offer 24/7 customer service across multiple channels, including mobile apps, social media, chatbots, and live chat. This ensures that customers can get help on the platform of their choice, which improves accessibility and satisfaction.

• Encourage personalized member services. By tailoring financial products to their members’ unique needs, credit unions can establish themselves as trustworthy advisors. They show they’re invested in delivering the best possible customer experience. For example, providing customized savings plans to members will elicit a more positive response from them. This is because the plans are relevant to their specific financial situation.

• Leverage and emphasize community engagement. Credit unions can actively engage with their communities through events, sponsorships, and local initiatives. Hosting financial wellness workshops, supporting local businesses, or volunteering at community projects reinforces the credit union’s role as a trusted community partner.

Popular Customer Experience Trends in Banking

Some of the emerging CX trends in banking reflect the ever-increasing demand for faster, smoother, and more efficient customer journeys. It also highlights key differentiators for banks to help them thrive in a competitive landscape. Here is a look at the popular trends that are driving CX strategy for banks today:

1. Online and Mobile Banking

More customers prefer the self-service option of managing their finances on their own time. Mobile banking is one of the most important considerations for banks. However, building an app alone isn’t enough. The performance and reliability of digital products can impact customer satisfaction for better or worse.

The ideal mobile banking experience is one where the user can intuitively find what they are looking for. They can also quickly access customer support if need be. The app or website should support every aspect of a customer’s interaction, including opening an account and getting financial advice. 

2. Artificial Intelligence (AI)

AI in customer experience can’t completely replace human experts. It can provide personalized recommendations and services at scale making it a must-have technology for modern banks. Machine learning algorithms, for example, can learn from individual customer behaviors. Based on their learning, they can recommend financial products and services that are tailored to each user profile.

Moreover, by handling repetitive analytical tasks, AI systems allow human agents to invest more of their time and energy into forging strong customer relationships by resolving more complex issues.

3. Personalized Customer Service

Personalization is quickly gaining significance for banks because of shifting customer expectations. 62% of consumers agree that personalized recommendations are better than general ones. This approach is crucial for driving loyalty. 

4. Proactive Communication

Instead of waiting for customers to reach out and seek help, proactive communication aims to stay one step ahead of them. This trend is also linked to a growing customer expectation for faster communication and issue resolution. 

By analyzing customer feedback and activity across all touchpoints, it’s possible to predict their needs and next steps so that you can proactively help them. It’s important to manage the volume of feedback requests you send. Too many of those can cause survey fatigue and turn away your customers altogether!

Examples of Banks with the Best Customer Experience

The growing emphasis on improving CX in banking has made it essential to adopt the right trends and tools. The following financial institutions demonstrate how utilizing customer-centric strategies has empowered them to deliver excellent customer experience in banking:

1. Virgin Money: The British financial services brand launched its CX Success program with the help of Pearl-Plaza in 2018. Since then, it has collected feedback from over 100,000 customers. This has empowered its workforce to act on enhancing customer satisfaction right away. As a result, it succeeded in reducing the targeted monthly complaint volume by 27%.
2. Chevron Federal Credit Union: The credit union partnered with Pearl-Plaza to leverage the power of AI. This helped them provide friendly, personalized services to its members. With the help of advanced text analytics, Chevron FCU was able to capture actionable insights from open-ended survey responses and online comments to improve its CX efforts.
3. Metro Bank: The UK-based retail and commercial bank has successfully transformed its customer insight program. Part of the transformation enhanced retention and acquisition, along with improving key business metrics through its partnership with Pearl-Plaza. Metro Bank leveraged AI tools like Active Listening™. This created a customer-centric culture that increased its revenue by 5%. They also grew their number of customer accounts to three million.
4. First National Bank: With the help of journey mapping and AI-powered feedback analysis, First National Bank unlocked opportunities for CX improvement across all touchpoints. It utilized Pearl-Plaza’s custom text analytics model to accurately analyze customer data and determine how to cater to their unique needs and expectations.

Managing a Customer Experience Transformation in Banking

Understanding how to improve the customer experience for your clients is one thing, but putting it into practice is another challenge altogether. A successful CX transformation combines strategic implementation and continuous monitoring to make the most of customer feedback and insights. The following steps show how you can accomplish such a transformation:

1. Start by capturing customer insights.

The first step towards managing a customer experience transformation is to gather data and insights through meaningful customer survey questions. Customer feedback platforms like Pearl-Plaza can help your bank deploy surveys and collect data from users to identify pain points and areas for improvement. 

The analysis of this data yields insights that can help map out the entire customer journey. It can prioritize aspects of your business that need the most attention. This includes your mobile banking experience and your customer support teams.

2. Implement CX initiatives in phases.

A full-scale transformation can be overwhelming, so it’s essential to implement changes in phases. Banks can start by improving one touchpoint at a time based on the most high-priority issues and opportunities. 

For instance, if your bank’s mobile app is lagging behind competitors in terms of user-friendliness, your first step should be to upgrade it to current industry standards. Moreover, each step should be evaluated with customer feedback to ensure it’s meeting expectations.

3. Focus on employee training to create a customer-obsessed culture.

Employees play a crucial role in delivering excellent customer service. They are either the first point of contact for customers or responsible for solving their specific pain points. You can boost your CX efforts by training the workforce to be customer-focused. Train your team on how to provide personalized services, manage online reputation with timely responses, and handle customer concerns with empathy. 

4. Leverage technology for consistency and efficiency.

With customers preferring faster and more efficient service, it’s essential for banks to utilize technology to meet their growing expectations. AI-powered solutions, such as Pearl-Plaza’s advanced analytics, can accelerate CX transformation by analyzing large volumes of customer feedback at scale. By handling repetitive analytical tasks for you, these tools allow your human agents to focus on building meaningful relationships with customers.

5. Continuously monitor and improve customer satisfaction through measurement.

Once the initial changes are in place, it’s crucial to continuously monitor customer satisfaction and make adjustments as needed. This is where it can help to keep an eye on customer sentiment and opinions on social media. 

How Banks are Using Customer Data for Personalized Experiences​?

AI-powered systems have enabled personalization for businesses across various industries, including financial services. The ability to process volumes of customer data to quickly capture trends and insights has transformed the way banks service their clients.

Learning from customer behavior enables banks to provide tailored services to customers, including:

• Personalized financial product recommendations like loans, credit cards, or investment options based on analysis of the customer’s spending habits and financial goals.

• Customized offers such as personalized discounts, cash-back rewards, or special interest rates based on individual customer profiles.

• Targeted financial advice in the form of budgeting tips or investment strategies tailored to the customer’s financial portfolio and goals.

• Community spaces in physical bank branches designed to cater to customers’ lifestyles and work-related needs, like remote work, business meetings, or lounging.

• Custom notifications and alerts for spending activity or fraud detection based on real-time monitoring of individual customer accounts.

For instance, Virgin Money allows its customers to access lounges. This is a space where they can meet with others, work, or simply relax, all while fulfilling their banking needs. This service, alongside its effective use of customer insights through its partnership with Pearl-Plaza, has positioned the bank to stand out against competitors. Many people view it as a brand capable of delivering personalized experiences that make customers feel valued and heard. 

In fact, after launching its customer success program, Virgin Money’s response rates grew by 13%. Its relationship NPS (a metric that focuses on long-term relationships between customers and businesses) doubled year-on-year.

Therefore, banks can better anticipate customer needs and build deeper relationships by investing in personalization and data-driven approaches.

How Banks Should Measure Customer Experience?

Banks should measure customer experience by identifying key performance indicators (KPIs) that reflect customer engagement and satisfaction. Here are some of the most common customer experience KPIs and methods used in this process:

• Net Promoter Score (NPS): NPS is commonly used by banks to measure customer loyalty and the likelihood of customers recommending the bank to others. A high NPS score indicates strong customer satisfaction and brand advocacy.
• Customer Satisfaction Score (CSAT): CSAT measures how satisfied customers are with specific interactions or experiences. Banks can use CSAT scores to gain insights into customer experiences at key touchpoints like branch visits, customer support, or digital transactions.
• Customer Effort Score (CES): CES evaluates how easy it is for customers to complete banking tasks, such as paying a bill online or filling out a loan application form. A lower effort score typically translates into higher satisfaction, as customers appreciate frictionless and smooth experiences.

Along with looking at these KPIs, banks can also rely on feedback forms and surveys to gain a deeper understanding of customer sentiment. The main goal should be to create customer feedback loops that allow banks to monitor behaviors and make informed decisions. This way banks can further improve their CX strategy.

How to Select the Right CX Software to Manage Banking Experience

Choosing the right CX software is essential for effectively managing and improving customer experiences in banking. Here are a few features to look for when investing in the right platform to boost your CX efforts:

• Omnichannel data collection: Your CX software should be able to capture customer feedback from various touchpoints. Touchpoints can be in-branch experiences, mobile apps, websites, and customer support interactions. This provides a holistic view of the customer journey and ensures you don’t overlook any aspect of the customer experience.
• Real-time feedback and analytics: Software that provides real-time data collection and analytics empowers your bank to address customer concerns immediately, track evolving trends, and make timely adjustments to improve service.
• Personalization: The ability to personalize services based on customer data is critical for driving loyalty and retention in this age. The software should help banks offer tailored advice and recommendations by analyzing customer behavior and preferences.
• Integrations: A good CX platform should easily integrate with your bank’s existing systems. These integrations can include your customer relationship management (CRM) and marketing automation. This ensures that customer data is accessible and actionable across departments, which encourages consistent service delivery.
• Actionable reporting and insights: The software should offer comprehensive reporting tools that provide actionable insights. Clear, easy-to-understand reports will help your bank quickly identify trends, pain points, and opportunities for improvement.

Transform Your Banking Experience with Pearl-Plaza

Customers have growing expectations from their banks. Data suggests that they won’t hesitate to switch allegiances if their needs aren’t met. With the help of Pearl-Plaza’s CX platform, your bank can rise above the competition by delivering personalized and seamless customer experiences. 

Our award-winning AI and reputation management tools will empower you to consistently track and enhance your customers’ perceptions of your brand. Schedule a demo today to revolutionize your financial services and boost key business metrics.

Barbara Wharton

CX Writer

Barbara, a seasoned digital experience professional, is passionate about orchestrating seamless impactful experiences. Her journey in this field has allowed her to explore, innovate, and share valuable insights to help shape digital experience strategies. Dedicated to her craft, Barbara is on a mission to empower businesses and CX enthusiasts with the knowledge and strategies to transform experiences and drive lasting success.