The Technology Leader’s Blueprint for Financial Services Customer Experience

The Technology Leader’s Blueprint for Financial Services Customer Experience

Digital native competitors are disrupting the traditional banking landscape like never before. In turn, this is putting CIO/CTO roles in banking under intense pressure to modernize their technology foundations and elevate customer engagement in financial services.

Today’s consumers demand friction-free customer experiences in financial services, but many banks have found it difficult to deliver on those expectations because of legacy systems and siloed data. Indeed, more than half of banking executives harbor concerns about relying on legacy tech and their increasing technological debt.

This is why more forward-thinking technology leaders are putting customer experience (CX) front-and-center of their banking transformation strategy. This blog explores what that looks like in practice.

Reimagining the Role of the CTO/CIO in Financial Services

There will need to be a change in what the CTO and CIO deliver, moving away from pure technology and towards strategic business input. Ultimately, they will be responsible for driving competitive advantage through enhanced financial services by aligning technology investments with the overarching goal of elevating customer experience.

This will mean identifying use cases for the latest technologies and successfully implementing them, from AI and personalization in financial services to blockchain for secure transactions. Good strategic roadmapping and decision-making will help them foster a culture of continuous improvement, where new innovations are developed all the time to keep their organization ahead of the competition.

This shift will also require a customer-centric mindset, deep understanding of pain points across the banking experience, and the ability to orchestrate an agile, CX-optimized technology foundation.

Embracing Cloud-Native Architectures for an Omnichannel Customer Experience

Outdated on-premise systems have been a major hindrance to banks’ ability to deliver consistent, seamless, omnichannel experiences. According to IDC, by 2028, spending on outdated payment systems could be costing banks as much as $57 billion.

Connected to this challenge is a lack of structured data, and the inability to integrate new technologies like automation into existing solutions. This is why moving towards next-generation platforms in the cloud is so important.

By embracing cloud-native technologies, banks can unlock the flexibility, scalability and integrations needed to create frictionless omnichannel journeys. The cloud can be an enabler of quick responses to changing circumstances, whether that be new market opportunities or regulatory shifts. It can also support better reliability and consistency of services, and stronger security at a time when the risk of cybercrime is very real.

But perhaps the most telling impact that cloud can have on customer experience is the ability to leverage and analyze large volumes of data in real time. This supports a more personalized service and experience for customers, based on faster and more informed decision-making by banking staff.

Leveraging AI and Data-Powered Personalization

With that cloud foundation in place, banks will be far better-placed to deliver on customer expectations for highly personalized guidance and recommendations, tailored to their unique needs and preferences. In fact, more than half of American consumers want their financial providers to use their data to provide more personalized experiences.

This can be achieved by harnessing the power of AI, predictive analytics for banking and real-time customer data. That way, financial institutions can provide the elevated level of service that modern consumers demand, driving loyalty and engagement.

For example, generative AI can analyze huge volumes of customer data in real-time to tailor service offerings to the individual consumer. It can go far beyond traditional metrics like income or credit score, and assess detailed information like spending history, home ownership or even social media activity, and work out which products are most likely to resonate with their specific circumstances.

Typically, customers could access dynamic budgeting tools which automatically change parameters when financial arrangements change (such as a payrise), and the same principle can apply to customized investment portfolios that evolve according to user goals and market conditions. Generative AI can also support wider financial planning, across mortgages, retirement savings and other long-term schemes.

Creating an API-Driven Tech Stack

All of the innovations that AI can support will ideally be intertwined with other offerings, so that customers get seamless, comprehensive service that covers all the bases. 

In that sense, the future of banking customer experience lies in flexible, API-powered banking architectures that enable integration of best-in-class solutions. According to Forbes, financial firms that adopt APIs enjoy market capitalization growth 12.7% larger than firms that don’t.

Pursuing an API-driven approach will mean that CTOs can create a modular technology stack that can be quickly adapted to changing customer needs and market conditions, without being tied down to monolithic legacy systems.

However, it’s important to note that some banks won’t feel able or willing to build out their own APIs. In this case, they can leverage third-party API solutions or Banking-as-a-Service (BaaS) platforms to modernize their stack. This can be especially attractive to banks as they are able to bring agile innovations from FinTech into their own offerings, often white-labeled under their own branding. Products ranging from cards and payments to deposit accounts and even loans can therefore be provided, with the provider of those services taking care of all the back-end responsibilities like risk management, security and compliance.

Creating a CX-Centric Tech Strategy

This journey represents some major change in several key areas for banking firms, and so the transformation will not be achieved overnight. It’s clear that transforming financial services customer experience will be an ongoing, iterative process, guided not only by the available technology but also by a strong focus on customer experience design.

Ultimately, technology leaders should embed customer experience as a strategic priority at every stage of their digital transformation journey. From our extensive experience with supporting banking innovation, we recommend following Ciklum’s Experience Engineering methodology, from initial planning to solution implementation and continuous optimization.

To explore the role of customer experience in financial services in greater detail, read our eBook - Banking on Customer Experience: A New Era for Financial Services Firms.