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Customer experience in banking: Why it matters more than ever

Published: September 06, 2023
Updated: September 07, 2023
Customer experience in banking: Why it matters more than ever

If you’re in the banking sector, you already know the game has changed—big time. The days when just offering online banking services was groundbreaking are long gone. Now, according to Forrester, a 1-point improvement in the Customer Experience Index can translate into an additional $175 million in revenue for a big bank. We’re talking personalized service that makes Netflix’s recommendation algorithm look basic.

According to the Capgemini World Banking Report 2020, 75% of customers say that customer experience is crucial in influencing their choice of bank.

Now it’s all about personalized, frictionless experiences across every digital touchpoint. Whether it’s AI-driven financial advice popping up on your smartphone or handling an account issue with a chatbot that actually “gets you,” customer experience is the heart of the business.

So, let’s break down those stereotypes of banks being faceless, cold entities, and let’s make your bank a place where customers actually want to be. Here’s how.

What is customer experience (CX) in banking?

Think of it as the sum total of all the interactions a customer has with a bank, from swiping their card and mobile banking to actually talking to a human—remember those days? CX in banking is how easy it is for a customer to open a new account, how quickly they can get their questions answered, and yes, how they feel after hanging up the phone or closing that chat window.

Importance of customer experience in banking

Banks are no longer just vaults to store money; they are financial advisors, security protectors, and sometimes even a shoulder to cry on when financial stress hits. Moreover, a report from Forrester found that customer experience leaders grow revenue at a rate 5-7 times faster than CX laggards in the same industry. And this isn’t just about customer retention. A solid CX strategy directly influences the entire financial spectrum of your business—from reducing service costs to increasing cross-sell and upsell rates.

A Temkin study showed that customers who have an excellent experience with their bank are 3x more likely to recommend it to someone else.

That’s the sort of word-of-mouth no marketing budget can buy. 

Common customer expectations for digital banking experiences

We’re living in a world where you can order a gourmet meal, book a trip, and even find your soulmate with just a few taps on your phone. So, it’s not a big surprise that customers expect their digital banking experience to be on par with other modern conveniences. Today’s digital-savvy customers are raising the bar, and as CX leaders, it’s your job to meet—and exceed—these expectations.

1. Always-on accessibility

Let’s face it, not everyone thinks about banking between 9 and 5. Your customers expect to handle their finances whenever they are free and wherever they are. That means your banking services have to be available 24/7. 

2. Speed as a standard

Speed is not just a luxury; it’s a requirement. The digital world has conditioned us to expect instant results, whether it’s loading a webpage or checking if a paycheck has cleared. A slow app or website can be a deal-breaker in retaining customers.

3. Security without sacrifice

Security is a major priority for digital banking users. A Javelin Strategy report shows that 36% of consumers would switch their bank for one that offered stronger security features. However, security measures shouldn’t be so cumbersome that they deter users. It’s a delicate balance that demands attention.

4. Tailored-to-me services

It’s no longer enough to provide a one-size-fits-all banking experience. Customers expect you to know them beyond their account numbers. From personalized financial advice to customized budgeting tools, a tailored experience is becoming less of a perk and more of an expectation.

Navigating the banking landscape today is more like steering a ship through an ever-changing sea of customer expectations and technological possibilities. If you’re a CX leader with an eye on the future, it’s best to keep an eye on the following trends that could redefine how your customers perceive value.

Proactive engagement for improved financial management

Your customers are increasingly looking for a proactive partner that helps them navigate the complexities of personal finance. Imagine your bank notifying a customer about an unusually large transaction or offering tailored tips on retirement savings. The goal is to offer actionable, personalized insights that can elevate your bank from a service provider to a valued financial ally.

Live assistance through advanced bots

Digital transactions may be on the rise, but the craving for a human touch remains strong. This is where next-gen bots come into play. Today’s AI-powered bots, equipped with human-like voice and text conversation capabilities, can offer live assistance for complex queries that go beyond basic FAQs. It’s like getting the best of both worlds—automation efficiency and the nuance of human conversation. These bots provide the instant, personalized attention your customers seek, demonstrating your bank’s commitment to exceptional service even in a digital-first setting.

Using chatbots as “financial concierge”

Chatbots in banking are stepping out of their simplistic roles as FAQ answerers and evolving into something far more valuable. Picture a “Financial Concierge” that guides your customers through loan options, calculates EMIs in real-time, and even offers investment suggestions based on real-time market data. It’s like having a financial advisor available 24/7, without the human overhead.

Prioritizing a seamless omnichannel customer experience

Your customers are omnichannel creatures. They might browse loan options on a mobile app but switch to a laptop to read the fine print. If their experience is disjointed, they won’t hesitate to switch to a competitor. A seamless experience across all touchpoints—mobile, web, branch, and even ATMs—isn’t just icing on the cake; it’s the whole bakery.

Deeper understanding of the customer journey

The customer journey is not a static map but a dynamic landscape that evolves with every interaction. It’s crucial to continually update this journey map with new data and insights, using it as a guide to meet and exceed customer expectations at every turn. Data-driven insights can not only help you understand your customer better but also predict their future actions. 

Using a personalized CX approach

The era of one-size-fits-all banking is long gone. Advanced AI algorithms now allow for a hyper-personalized approach, tailoring everything from product recommendations to financial advice based on individual customer behavior and preferences.

Transparency, security, trust as CX tools

In the era of cyber threats and privacy concerns, security is more than just a compliance checkbox; it’s a cornerstone of customer trust. Transparent practices, robust security measures, and proactive communication can turn these necessities into powerful tools for elevating customer experience.

How to improve the customer experience in banking using AI chatbots

We all know customer experience in banking is almost like the lifeblood of our business. And one of the quickest ways to give that experience a serious boost is with AI chatbots. No fluff, let’s dive into how these bots can actually make your life—and your customer’s life—a whole lot easier.

Predict customer needs before they do

We’re talking about a chatbot that actually anticipates what the customer needs. Forget waiting for a complaint or query to come in. This bot nudges the customer about that bill they forgot was due and even offers to sort it out.

Make your app a one-stop-shop

Let’s level up that mobile app, shall we? With a chatbot on deck, it’s not just another way to check an account balance. It’s a full-service experience. Transfers, payments, you name it—the bot’s got it covered.

Onboarding doesn’t have to suck

We all know onboarding can be a pain. But what if a chatbot could collect and verify all the info, so your new customer doesn’t have to jump through hoops? Yep, chatbots can make it that simple.

Personal finance advisor in your pocket

We can all agree personal advice adds value. Imagine a chatbot that’s dialed in to offer personalized budgeting tips or suggest a custom savings plan. And yes, it does it automatically.

Step up security but keep it chill

A chatbot can beef up security in a way that’s not super annoying for the customer. By analyzing behavior, it can flag dodgy transactions in real-time, without making life difficult for your legit customers.

Feedback? Let’s do something about it

These bots are also a goldmine for real-time customer feedback. Thanks to natural language processing, they can even gauge the mood of the customer and adapt in real-time.

Why is Yellow.ai the best platform for AI-powered chatbots in banking?

Let’s get real. In the crowded space of AI-powered platforms, you might wonder what makes Yellow.ai the top pick, especially for Banking, Financial Services, and Insurance firms. Here’s why:

Real-time support with a dash of genius

You read that right. Yellow.ai’s Dynamic Automation Platform (DAP) doesn’t just offer real-time support; it brings 24/7 omnichannel self-service and personalized engagement, elevating customer experience to a whole new level. This isn’t just about automated replies; this is AI-powered banking support with a pulse.

Money saved is money earned

The talk about slashing operational costs isn’t just a sales pitch. Yellow.ai proves it by cutting down your support costs by a staggering 60%. At the same time, it can drive up lead generation by 25%. That’s not just saving; that’s also earning.

Quick, smart and human-like support at scale

Yellow.ai leverages cutting-edge conversational AI powered multi-LLM architecture and generative AI to offer fast and outcome-oriented support. But that’s not all; it helps you both attract new customers and retain the existing ones, turning your support from a cost center to a profit generator.

Real talk with our dynamic voice AI

Say goodbye to awkward, robotic voice interactions. No you can scale with voice bots that are unbelievably human-like! Yellow.ai’s voice AI agents can handle outbound marketing and inbound retail queries with natural conversations that understand customer intent. We’re talking about a personal touch at scale here.

More than just talk, it’s about MORE $$

Think credit cards, insurance policies, and loans—Yellow.ai helps you sell more across 35+ channels. With features like eligibility checkers and product comparisons, you’re looking at driving sales conversions by 3X.

Personalized offers that hit the bullseye

Using customer insights and historical data, Yellow.ai allows you to send targeted campaigns that increase bank leads by 25%. This isn’t just boosting sales; it’s also building long-term brand loyalty.

Going live is a sprint, not a marathon

With prebuilt templates designed for the BFSI sector, you can go live twice as fast with templates that have led leading banks succeed. It’s like the fast lane but for customer support.

Look back to move forward

Yellow.ai doesn’t just stop at immediate support; it gives you performance insights, so you can constantly evolve your customer service strategies. Derive valuable customer insights from essential conversational AI metrics such as deflection rate, goal completion rate (GCR), CSAT, first response time (FRT) and more with our Dynamic Automation Platform (DAP).

CX in banking – FAQs

What are the types of customer experience?

Customer experience, in the banking industry can be categorized into types encompassing experiences such as online banking and mobile apps in person experiences at bank branches, service related experiences like customer support and financial guidance as well, as transactional experiences involving withdrawals, deposits and transfers.

How can consumers’ experience in banking be improved?

Improving consumer experience in banking often involves streamlining processes for ease and accessibility, improving response times in customer service, offering personalized financial advice, and securing transactions. New technologies like AI chatbots and predictive analytics can play a significant role here.

What is the importance of customer experience?

In the bustling realm of banking, customer experience is an absolute game-changer. Image this: two banks offer similar interest rates, mobile apps, and even those complimentary toasters. What’s going to tip the scales for a customer? Undoubtedly, a seamless, intuitive, and pleasant banking journey. Not only does a standout customer experience drive loyalty, but it also elevates metrics that matter: think higher lifetime customer value and an enviable net promoter score. When a customer consistently gets great experiences in their interaction with the bank, they’re likely to recommend the bank to friends and stick around for the long haul.

Why is customer service important to banking companies?

Banking relationships are all about trust, and at the heart of trust lies top-notch customer service. Your customers are entrusting you with their life’s savings, their dreams of buying a home, or sending their children to college. It’s natural to want interactions that are more than cold automated reply, correct? Empathetic and thoughtful customer service makes the customers feel valued and strengthens their trust in your bank. One exceptional interaction can be the difference between a fleeting transaction and a client who’s with you for life.

What is the difference between customer experience and banking experience?

While both involve the customer’s interaction with a brand, banking experience is more specific to financial institutions. It includes aspects such as the ease of account management, availability and quality of financial advice, and the effectiveness of problem resolution channels.

What is the impact of customer experience?

In the grand landscape of business, think of customer experience as the unseen force nudging your growth trajectory. Here’s a real-world snapshot: say you walk into a coffee shop, and they remember your name and usual order. Feels good, right? This positive vibe isn’t just about warm and fuzzies; it translates to real-world business metrics. A memorable experience ensures customers keep coming back, and let’s face it, keeping a loyal customer is way more wallet-friendly than chasing new ones. Plus, happy customers don’t just stick around; they turn into your brand’s megaphones, singing its praises to anyone who’ll listen. This organic word-of-mouth? It’s gold, potentially broadening your clientele without you spending a dime on marketing.

What are some of the customer experience trends in the banking industry?

Trends in the banking sector point towards a more personalized, seamless experience across multiple channels. We’re seeing more use of AI for customer service, biometric authentication for enhanced security, and predictive analytics to offer personalized financial advice. These trends signify that banking is becoming more customer-centric than ever.


So, it’s evident that customer experience not only influences customer satisfaction but also has a domino effect that can impact overall business performance. From the basics of what makes a customer tick when they log into their banking app, to the future-forward ways AI can make that experience smoother, it’s clear: we’re not in the era of set-it-and-forget-it banking anymore.

Tools like Yellow.ai aren’t just about cutting costs or increasing sales—they’re about bringing a human touch to a digital world. They’re your new MVPs in delivering an experience that makes your customers stick around for the long haul.

So, if you’re looking to seriously step up your customer experience game in banking, it’s not just about choosing any platform; it’s about choosing the right platform. And with Yellow.ai, you’re ticking all the right boxes.

Kick your CX up a notch with AI chatbots

Customer experience not only influences customer satisfaction but also has a domino effect that can impact overall business performance.

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