A digital-first approach has emerged as a central bank strategy to provide exceptional customer experiences. Research by IDG’s Digital Business reveals that fostering a digital-first business is a primary objective, with 91% of organizations already implementing or intending to adopt this strategy [1]. To embody the digital-first culture, banks need to incorporate technologies to make customer experience more personal, quick, easy, seamless, and secure. 


Make it personal 

Delivering customized services to customers is the cornerstone to distinguish businesses from their competitors. The application of personalization fosters heightened customer engagement, leading to strengthened loyalty, trust, and retention rates. In fact, 72% of customers rate personalization as “highly important” for financial services [2]. While 77% of business leaders recognize that deeper personalization leads to increased customer retention, 66% believe it lowers acquisition costs [3]

Besides, personalization can increase revenues for banks. According to Forrester, a 1-point improvement in the CX Index score can lead to an incremental USD 123 million in revenue for a large multichannel bank. For a direct bank, it can lead to an incremental USD 92 million [4]. Leveraging data analytics and AI, banks can analyze customer behaviors and offer personalized insights into spending habits. For example, banks can use AI algorithms to analyze transactions and offer tailored suggestions on how customers can optimize their budgets or save more effectively.


Make it quick 

In the era of digitalization, corporations have to deliver customer experience within seconds. Hence, leveraging technologies like live chat and chatbots can help banks quickly address customers' concerns. A report indicated that 70% of people prefer to click on “message us” rather than “call us” when trying to get in touch with customer service [5]

Integrated with AI, chatbots can further leverage customer experience. Through the input of questions and answer prompts, chatbots can provide proactive support by addressing customers’ common questions. Besides, 79% of consumers prefer live chat support, as they can receive assistance immediately [6]. Chatbots allow bank corporations to scale productivity without adding headcount and free up advisors from performing routine tasks. 

However, banking consumers still prefer interacting with human agents for higher-stakes tasks. Specifically, 63% percent of consumers want one-on-one personal conversations with bank representatives, indicating that the human touch remains critical to the banking experience [7]. Thus, banks should maximize the combination between AI-powered chatbots and human interactions. 


Make it easy  

The digital-first customer is looking for convenience, where they can access bank accounts digitally anywhere and anytime. With 79% of respondents believing that financial customers are happy to spend more for convenience [8], banks need to take a user-centered approach to design. As 36% of financial organizations regarded digital CX as a top investment priority [9], it is clear that they can recognize the growing demand for digital services.

Besides, open banking services have emerged as a trend for providing great convenience for bank users. Through the integrated APIs, open banking allows streamlined account aggregation, enabling customers to view data from multiple financial accounts within a unified interface.

Besides, developers can utilize pre-built API components to create faster financial applications and services. This can trim down the time-to-market and empowers financial institutions to remain responsive to evolving customer needs. With the expected market to increase to USD 580 billion in 2027 [10], open banking services' rapid expansion and integration into various ecosystems can solidify their market position . 

Additionally, APIs enable real-time payments, fund transfers, and bill settlements without requiring multiple logins or manual procedures, fostering quicker transactions. With 57% of customers switching to a competitor with a better experience via API [11], banks should devise API strategies to enhance customer retention and elevate their overall services. 


Make it seamless 

The omnichannel approach has emerged as a pivotal strategy for digital-first banks. While these banks strongly emphasize their digital platforms, they also recognize the importance of providing a seamlessly integrated experience across virtual and physical channels. With around 80% of customers prefer omnichannel strategies due to the seamless communication experience [13], this approach can be a win-win for both banks and customers.  

For banks, they can adapt to changing customer preferences with more flexibility. Banks can easily introduce new services, features, and updates across all channels. Optimizing omnichannel can help banks achieve operational efficiencies, translating into cost savings in the long run. 

For customers, interruptions in their banking interactions are minimized. For instance, a customer might initiate a transaction on a mobile app and complete it in person at a branch without starting over. This continuity in their interactions significantly contributes to improved customer satisfaction and loyalty.  

Moreover, the omnichannel model facilitates efficient resolution of issues. If a customer encounters a problem on one channel, they can seamlessly transition to another without having to restart the process. By adopting omnichannel, banks can witness 91% higher year-over-year customer retention rates than businesses that don’t [13]


Make it secure

Enhancing security for banks is critical. Thus, AI and machine learning can help banks identify fraudulent activities, track loopholes in their systems, minimize risks, and improve the overall security of online finance. Interestingly, a study found that AI-driven fraud detection systems could save banks approximately USD 10 billion annually [14]

AI and ML can detect abnormalities within complex datasets, enabling them to identify potential threats that might otherwise go unnoticed by alerting cybersecurity teams. Furthermore, these tools harness an iterative learning process, which enables them to enhance their performance over time to generate more accurate predictions and analyses.

As banks handle sensitive customer data, any information breach could lead to severe consequences. Thus, it is imperative to ensure the adoption of resilient data encryption techniques, secure data storage solutions, and rigorous protocols for controlling data access. Additionally, compliance with diverse data protection rules is a must for banks. Navigating these rules can be complex but is vital for building customer trust and avoiding legal fines.

One particular example is the breach of data for Bank of Ireland. In April 2023, the bank was issued a EUR 750,000 fine after it committed a series of data breaches. Ireland's DPC (Data Protection Commission) issued the fine after investigating ten cases in which users of the bank's online app were shown information about other people's accounts [15] Even though 136 accounts were affected with no customers losing their money, implementing strict data protocols is a must for banking industry


Make it to the end of the race

Satisfying customer demands and ensuring customer loyalty have consistently been the cornerstone of strategies by several banks. The banking industry can forge ahead of the digital cut-throat competition by integrating advanced technologies (such as AI and ML) and innovative approaches to entice more customers.

Author Tuan Minh Tran