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The Bar for CX Has Been Raised - Can Retail Banks Reach It?

Customer experience has been enshrined by startups and challenger banks. Now, retail banks must do the same or risk losing an emergent client base.

Posted: 5th May 2021 by
Andrew Lawson
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Finance Monthly hears from Andrew Lawson, SVP EMEA at Zendesk, who discusses the growing divide in the banking sector and how retail banks might become competitive once again.

As the economic fallout of COVID-19 continues, businesses feel the pressure to remain resilient and agile in order to stay competitive. And retail banks are no exception. According to the latest World Retail Banking Report, there has been a disconnect between short-term cost-cutting objectives and long-term digital transformation investment needed for incumbent banks to thrive. In fact, the report indicates a disconnect between what customers want and what banks are actually prioritising.

Right now, retail banking customers expect the same service they would get from any other business, and the pandemic is no longer an excuse for poor customer service. Thankfully, Zendesk’s Customer Experience (CX) Trends Report, shows many traditional bricks and mortar financial institutions who were previously slow in the shift to digital, have reacted fast in order to up their service game. The same research indicates that more than half of financial services companies reported that they increased their CX budget in 2020.

Consumer demand is growing for more personalised advice. Existing retail banks have access to decades-worth of data on their customers. When analysed carefully, this data is rich in details on what their customers want most from their bank. How can retail banks use this, to not only inform personal customer interactions but to transform the customer experience they offer for the digital-first culture?

The CX divide in retail banking

Gone are the days of a ‘bank for life’. Digitally native Gen Zers are the least likely generation to stick to their bank, as more than half switched their main bank account within two years of turning 18.

It is clear that younger customers aren’t hesitant to make a change if another provider ticks all of their boxes and delivers on their CX expectations. The rise of digital banking has made it easier than ever to move money between accounts – or, indeed, banks. In fact, with legislation like the 2015 EU Directive PSD2, regulated payment services have put digital and mobile-first banks on a level playing field with traditional high street and household names.

Gone are the days of a ‘bank for life’.

Meanwhile, new banking startups entering the field are transforming customer experience expectations in the banking sector, making it easy for customers to get advice, help and support across many channels with a unified experience. From real-time balance updates to budgeting support solutions and even the ability to split the bill and connect your banking with your friends, these features are now integral parts of the banking experience that incumbents need to match to bridge the divide with challengers.

One digital-first bank that has been able to quickly fill an accelerated experience gap is Mettle. The free business bank account offered by NatWest aims to support the rise in the passion economy. That is, people setting up businesses for the very first time. And, what’s more, the demand for this type of service has skyrocketed, with more than 200,000 new companies formed post-lockdown-1.0. Mettle’s biggest challenge was communications back to its customers. Business founders are traditionally time-poor and as such, expect a fast and seamless service from their banking provider.

With a connected service platform, Mettle has been able to listen, iterate and build upon what is important to its customers. Taking a digital-first approach to banking, with integrated self-service platforms and free accounting software enabled the team to take a more flexible approach to service. Being open to customers about what they can and can’t offer has also been a crucial part of reducing the stress for customers and making banking simpler. Mettle’s customer-centric approach helped grow its customer base by 120% in the second half of last year, and the company to connect their understanding of the customer across the business.

A cultural transition

Another area where CX teams at retail banks can find quick wins is in the delivery of frictionless digital services, which are paramount to remaining resilient in the face of COVID.

Retail banks need to be able to deliver a consistent digital-first service and meet customers where they are, when they need it most. Already, almost three quarters of customer service agents state that they have the tools they need to work remotely and, what’s more, 58% of agents have regular access to support from developers to customise customer solutions, allowing them to remain adaptable to changing needs.


We see then that a true transformation in the way the industry behaves is here to stay – one built on agility, superior CX and omnichannel banking – but there is still progress to be made. Since the rise of smartphones and app-based banking, customers have come to expect instant access to their accounts - digital banking isn’t just a nice option to have, anymore. As such, financial services organisations will need to find ways to differentiate themselves and remain agile and flexible in an environment of constant change.

Simply being online isn’t enough. Customers want speed and convenience, but they are also seeking commitment to the issues they care about. To keep pace with the ongoing shift in consumer behaviour and expectations, you need to be laser focused in your approach to CX. The bar has been set - and it’s high.

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