How Banks Are Tearing Down And Rebuilding Customer Experience

"The customer is always right!"

So goes the motto of good business. For a century or more, entrepreneurs, shopkeepers, and global corporate heads alike have been guided by this principle, but perhaps it needs to be slightly updated.

Because, today, customers are not only right—they're also telling you how to run your business.

"The customer has spoken!"

Perhaps this one is better suited to our 2018 reality. Look in the finance sector, for example: the Viacom Millennial Disruption Index has found that 60% of millennials think that big banks aren't designed to service their generation, and 33% believe they won't ever need a banking institution.

That's one third of a whole generation who can imagine a world without traditional banks at all! Furthermore, 53% of the 10,000 respondents see no difference between the institution they use and other banks.

The message is that customers are jaded with the current incarnation of the whole banking system. They are open to alternative money institutions; this bank is as good as any other; and their banking experiences are nothing to write home about.

Tech companies can wreck companies

In that context, banks are vulnerable to new types of digital competitors. Even so-called traditionalists (at least a high proportion of them) use banking services via their mobile phones, an interface exploited very adroitly by many new, digital companies. The momentum for brand-new banking seems to be strong: one might even ask whether banks will survive as the primary type of money-holding institution at all. Perhaps open banking providers or tech giants will take the stage.

Indeed, the likes of Google, Facebook, and Amazon have certain advantages: they benefit from strong brands, stable infrastructures, and huge user bases. They are able to utilise the existing banking infrastructure and already have expertise in developing new customer-friendly services and products. Furthermore, 73% of generation Y would be more excited about a new offering in financial services from Google, Amazon, Apple, PayPal, or Square than from their own nationwide bank.1

One advantage that digital companies have over banks is, in many cases at least, a head start in terms of tech integration: there is a shift currently observable from siloed systems, where every need has a corresponding technology or software, towards an integrated system where there are no standalone needs and everything is interconnected.

While around a quarter (27%) of banks...

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