Industry context

The primary headline in the financial services sphere is the rampant rise of inflation and interest rates. The once-negative interest rate is now growing rapidly, which will affect the cost of products and services. Across the world, economies are bracing for a potential recession, and customers face a cost-of-living crisis like many have never lived through before.

Against this backdrop, many banks and financial institutions are reporting solid revenue growth, which must be managed carefully In light of marketplace constraints.

Workforce is, of course, a big issue across all sectors globally. And with customer expectations hinging on the performance of the workforce, banks must continue to meet the needs of their customer base while limiting the number of branch locations they maintain after the restructuring and consolidation processes they went through since the last global financial crisis.

The financial services industry no longer competes within just its sector for talent – it now competes across all sectors. The diversification of roles needed within the industry is no longer niche to the sector, meaning attracting and retaining top tech talent to retain a competitive edge in the sector will be pivotal for banks as digitization continues to grow. To excel in the Six Pillars, this digital transformation is non-negotiable.

The online presence of banks continues to transform the ways customers can access services, and an omnichannel approach has become the norm in the wake of the COVID-19 pandemic.  Customers need day-to-day services at their fingertips and on-demand, but still need access to a human touch for more complex issues. Cybersecurity remains a top priority for banks as this digital age advances.

While embracing ESG principles, banks now face mounting pressure to eliminate bias and inequality within any algorithm or artificial intelligence. This is no small task, with many technologies being rooted in real-life, often biased, societal systems.

Key trends

Algorithmic integrity is key to building trust with a diverse customer base in the digital age. Using AI and machine learning to enhance customer experience must work for everyone, and banks are striving to eliminate any inbuilt bias in their systems. Consumers are rewarding banks with their loyalty when they show empathy and are active in local communities. 

Chatbots continue to provide a first line of resolution for customers, and this technology is slowly advancing. Facing pressures from a global labor shortage, banks must ensure customers have access to a humans when they need them to resolve more complex queries. Self-service banking apps continue to shift ownership of day-to-day transactions into the palm of the customer, but banks do not want to alienate rural and more traditional customers who need in-person services.

The competitive environment within the financial services sector continues to give customers more agency over the experience they can demand. With emerging digital banks revolutionizing the customer experience and taking things completely online, traditional institutions must level up capabilities to keep pace, while maintaining their original USP.

Time & Effort
Smart phone dependence has increased exponentially following the pandemic, and customers now expect true omnichannel access to services, in real-time, at their fingertips. Optimizing the customer experience across all channels and utilizing emerging technologies such as AI and advanced data analytics will be key to ensuring customers are served in real-time with little effort.

Data is the price customers pay for personalization, and financial institutions must tread carefully and operate transparently as they use consumer data.

To win the hearts and minds of customers, financial institutions must demonstrate genuine understanding and support for both colleagues and customers as they navigate the current difficult economic period.

The Customer Experience Leaders

The report ranks companies based on consumers' views of customer experience.  This resulted in banks chosen for their ability to create a strong bond with the customer, not their size, scope, or leadership in the industry.

The addition of UK digital bank Monzo in the Hall of Fame speaks to the rise of disruptive, digital financial institutions that we’re seeing in many markets. Monzo’s ‘community-first’ brand DNA is appealing to customers who feel involved in building a purposeful bank of the future. Monzo’s mission? Building an alternative to the banking of the past: “We're focused on solving problems, rather than selling financial products. We want to make the world a better place and change people's lives through Monzo.”

In the United States market, two customer service excellence leaders, USAA and Navy Federal Credit Union, have mastered appealing to their hyper-targeted customer base. Both offer financial services to those in active service and military veterans, providing services that meet their unique needs.

Another leader in personalization within the sector Hall of Fame Is Bank Islam Berhad in Malaysia. As the leading Islamic bank in the market,it operates with purpose, “bringing a unique perspective to the financial landscape, with a commitment to nurture responsible growth and progress.”

The power of emerging technology holds the key for personalization and tailored service at a customer level for the banking sector. The digital marketplace has allowed many banking institutions to revolutionize their delivery models and make banking more accessible and streamlined while they look to expand across new markets and segments.

Francisco Uria Fernandez
Banking Sector Lead