BANKING IN

THE CUSTOMER
EXPERIENCE ERA
DAVID POOLE & JON DAY

Banking is getting better faster,

easier, more mobile, more connected,
more transparent, and more personal.
And, for many banks, there has been
a very public and intentional renewed
focus on customer advocacy on
rebuilding the trust lost during the
financial crisis. Yet, despite years of
ad campaigns, a full 63 percent of
consumers believe banks only care
about their own interests.1
We believe banks must bridge the
divide between what they say they do
and what they actually do with a new
service orientation that responds to
customers needs, wants, and desires.
The future of banking is about enabling
customers to realize their dreams.

FIGURE01

Changing priorities
Banks that thrive will simplify the
product set and develop a complex
and nuanced understanding of
the customer.

Simple understanding of
the banking customer
Complex product set

Understand your customer and

simplify your product set
Earning public trust is a matter of the
customers banking experience living
up to the brands promise. This hinges
upon a detailed understanding of the
customers changing expectations,
particularly the need for purpose.
We are seeing leading banks flip the
current simple view of the customer,
and endlessly complex view of the
product set, on its head.

Complex understanding
of the banking customer
Simple product set

The successful bank will have a refreshingly simple product set built around
relationships, and a more nuanced
understanding of customers and their
needs for breakthrough experiences
(see Figure 1). The bank of the future
will act on its wealth of customer data
a shift in emphasis from systems
of record (data stores) to systems of
engagement (informing customers).

CG42. Retail Banking Brand Vulnerability Study. http://cg42.com/2013-retail-banking/.

OUR PERSPECTIVES

Seventy-five percent of global banks

are now investing in a customer-centric
business model, marking a profound
transformation of their business and
culture.2 Banks recognize that people
dont buy a loan. They buy a car the
loan is the enabler. Yet still, banks often
lead with the product. Bank brands
continue to speak to their consumers
in a siloed, product-based way in part
because the banking culture is riskaverse and overwhelmed by disruption,
regulations, and the economy.
In the past, banks and their agencies
have been unremittingly focused on
technology, product, and process, and
the motivation to invest in new capabilities has historically been to reduce
costs or increase sales. For example,
significant savings were realized as
customers shifted from teller to ATM,
from ATM to online, and from online to
mobile where each advance reduced
the cost of service.
This is, of course, valuable. But it
comes down to why they set out to
improve the banking experience. Banks
should shift from driving costs down to
driving consumption up. Although their
first thoughts are to cut costs, banks
can choose to delight customers (see
Figure 2), thereby resulting in new revenue streams and efficiencies that are
by-products of customers empowerment in money management.

Most banks focused on fixing the

foundational aspects of usability and
usefulness will, over time, shift toward
experience as they earn the right to
delight. Winning customers will require
going beyond the zero-sum game
of rates and products; it will require a
new focus on experience and delight. It
isnt just about features; it is about the
emotional connection or what we, in
the experience practice, call sense.3

FIGURE02

What customers say they want from a bank

Customers care about the lowest rates and seek a bank which helps motivate
them understanding their needs and helping them reach their financial goals.
They also prefer a product that is easy to use. Most customers dont express
interest in having a delightful banking experience, yet it remains essential to
the future of banking.
WHEN IT COMES TO CHOOSING A BANK,
IT IS IMPORTANT THAT THE BANK

RANKING

AVERAGE
SCORE

Offers the best rates and terms

2.51

Understands my needs

2.73

Helps me reach my primary financial goals

2.97

Offers products that are easy to use

3.10

Makes banking delightful and enjoyable

3.57

Source: SapientNitro online survey to our proprietary U.S. community, n=422

PwC. Retail Banking 2020. http://www.pwc.com/et_EE/EE/publications/assets/pub/pwc-retail-banking-2020-evolution-or-revolution.pdf.

We define five dimensions to help quantify the essential elements of experience (see Insights 2014: The Bottom Line on Experience). Sense is defined as the extent to which
a person discerns a meaningful, emotionally relevant story.
3

OUR PERSPECTIVES

As rates and features are further

commoditized, banks seeking to
remain relevant must deliver customer
experience with the extraordinary
power of delight and enjoyment
(see Figure 3). Forrester estimates
that addressing the enjoyability
metric is worth $81 million in annual
incremental revenue to banks.4 Not to
mention that the number one reason
for opening or closing a bank account
is the experience gap.5

FIGURE03

A significant gap
With different objectives, banks have different priorities than customers rates
and operational costs being just two examples. But both aspire to have delightful
experiences for their customers and themselves.
Banks wants

Delightful

Delightful

Conversion to sales

Invest in customer delight

The delightful omnichannel banking
experience does not yet exist and
remains a white space for the first
bank to deliver. These experiences
require significant investment; however, banks current technology spend
is increasing at a slower rate than
other industries (see Figure 4). Even
as banks prioritize their money toward
omnichannel solutions, their overall
IT budgets are growing slower than
retail, manufacturing, or business services. Banks also tend to have older
technology stacks, further reducing
flexibility and increasing costs.

Customers wants
ASPIRATIONAL

Ease-of-use

EXPERIENCE GAP

Best rates, meets my needs, and

helps me reach goals

Reduce operational costs

FOUNDATIONAL

FIGURE04

2015 U.S. industry tech budget spending in billions4

Banks current technology spend lags behind the U.S. average, standing at 4.1
percent to 5.9 percent respectively.
$1,382
5.9%
$1,305
6.0%
$147
$1,231
5.3%
$131

7.1%

$148

7.4%

$140

5.5%

$159

$299

$278

$254

9.7%
1.2%

$75
$134

6.3%

$217

2.2%

7.4%
2.9%

$76
$143

7.5%

$221

4.1%

5.3%

2013

$231

6.3%
2014

Percentage change from

2013 to 2014

$78
$153

$305

$287

$272

$168

2015
Percentage change from
2014 to 2015

Manufacturing

Utilities and Telecommunications

Retail and Wholesale

Finance and Insurance

Business Services

Public Sector

Media, Entertainment, and Leisure

Forrester Research. The Business Impact of Customer Experience. https://www.forrester.com/The+Business+Impact+Of+Customer+Experience+2014/fulltext/-/E-res113421.

Ernst & Young. Winning through customer experience: EY Global Consumer Banking Survey 2014. http://www.ey.com/Publication/vwLUAssets/EY_-_Global_Consumer_
Banking_Survey_2014/$FILE/EY-Global-Consumer-Banking-Survey-2014.pdf.
5

OUR PERSPECTIVES

Like a fantasy football team (see Figure

5), we can imagine creating a fantasy
finance team with the best touchpoints
in the industry. Our favorites include
Capital One 360 Cafes, Mints personal finance management, the cardless
ATM and Touch ID of RBS, safe-tospend by Simple Bank, Wells Fargos
cross-selling, the high cap on Ally
mobile deposit, and USAAs customer
service. Pick your own favorites and
imagine them tightly integrated to
deliver on your brands promise.

up with competitors who offer features

such as swipe balance, video ATMs, or
Apple Pay. However, we recommend
starting with table stakes features, focusing less on being first to market and
more on how to package the features
together. Then, using the following
traffic light model (see Figure 6),
assess whether to invest in additional
new features.

Reorganize to make it possible

Many bank brands excel in customer experience in one or two touchpoints.

Imagine if we could combine them to create a nearly unbeatable team.

To deliver banking in the customer

experience era, banks are looking
inward as well. The internal organization
of banks traditionally built around
products and strongly siloed has inhibited strategic change. Weve started
to see the development of entire new
ways of aligning and organizing talent
from RBSs journey managers, to U.S.
Banks new omnichannel organization,
to TD Banks Direct Channel organization. Banks are developing structures
that help their employees look across
products and focus on the customer
experience. Banks are restructuring
to implement their customer-centric
business strategies.

Build your world

When looking at the ambitious
capabilities in the fantasy model, it is
impractical to invest in everything. In
our conversations with banks, we often
work down into the weeds with discussions regarding individual components
of the consumer experience components such as the website, mobile
payment, the branch, and the role of
social. Theres a tendency to focus on
novel technology in an attempt to keep

OUR PERSPECTIVES

FIGURE05

FANTASY FINANCE EXPERIENCE

Capital One
360

mBank

BMO

Simple

Branch

Mobile

Site

Email

Commonwealth
Bank

Mint.com

Apple Pay

RBS

Social

PFM

Payment

ATM

Wells Fargo

Ally

USAA

Garanti

Cross-sell

Mobile
Deposit

Customer
Service

Integration

Fidelity
Investments

Bradesco

Wearables

Robot Teller

FIGURE06

Deciding where to invest

The traffic light model for deciding
what banking capabilities to invest in.

WAIT AND SEE

PASS

CRITERIA
Capability untested in this
banking market
Low public awareness

CHANNEL EXAMPLE
Branch: Robot teller
Mobile: Microsoft HoloLens
Desktop: Games
ATM: Custom card printing
Call center: Voice biometrics

ON THE VERGE

TEST

CRITERIA
Offered by banking innovators
Delivering results in other industries

CHANNEL EXAMPLE
Branch: Beacon
Mobile: Smart watch app
Desktop: Massive Online Open
Courses (MOOC)
ATM: Cardless transaction
Call center: Virtual assistant

TABLE STAKES

INVEST

CRITERIA
Demanded by customers
Driving switching behavior
Offered by competitors
Available as white label service
(e.g., Yodlee and Mitek)

CHANNEL EXAMPLE
Branch: Video conference
Mobile: Quick swipe balance
Desktop: Budgeting or Personal
Financial Management Tools (PFM)
ATM: Biometric security
Call center: Single customer view

OUR PERSPECTIVES

Conclusion
Crucially, these touchpoints work best
when part of a cohesive world inspired
by an organizing idea, implemented
in a way that feels like a humanized
expression of the brand. The sum of
these parts needs to live up to the bank
brand promise wherever and whenever
customers come calling. Great brands
sell themselves, not their products, and
this shines through every interaction on
each channel. When this is successful,
customers react in a positive manner
regardless of the channel through
which they interact with the brand
(see Figure 7).
While individual touchpoints (e.g.,
mobile, ATM, etc.) between banks
and their customers have advanced in
isolation, a seamless, holistic packaging
of these touchpoints has yet to occur.
Its their combination that will accelerate the vision of humanized and
enjoyable banking.
The time has come for the omnichannel
financial experience. The question is
whether a bank, retailer, or technology
company will do it first.

OUR PERSPECTIVES

FIGURE07

Desired future-state descriptions

The future of banking must have a
service orientation and respond to
customers needs, wants, and desires.
Banks should seek positive descriptions, whether the nature of the
engagement is a transaction, a
product/service, an educational
opportunity, or advice.
TRANSACTION
That was as easy as it could possibly be.
PRODUCT/SERVICE
I understand my options.
EDUCATIONAL OPPORTUNITY
I feel more confident.
ADVICE
I know I made the right decision.

David Poole
Senior Strategist, SapientNitro Boston
dpoole@sapient.com
David leads strategy for the Financial Services Center of
Excellence, which is responsible for supporting our global
network of clients in thought leadership, innovation,
transformation, and consumer insight.

Jon Day
Director & Global Lead, Financial
Services, SapientNitro Toronto
jday@sapient.com
With over 22 years of experience in financial services,
Jon guides our development of thought leadership, insights,
and research related to dramatic trends and movements
that redefine customer experience and how brands
connect to customers in the financial services sector.

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