Customer experience in financial services is undergoing a profound transformation, driven by FinTech innovations and AI advancements.
Despite sitting on vast amounts of customer data, banks struggle to leverage this information effectively. As industry expert John Sorenson SVP, Director of Customer Experience from Truist notes,
Outdated systems, complex data structures, and stringent regulations impede financial institutions ability to deliver the seamless experiences customers expect.
Customer experience transformation in the financial services sector requires a deep understanding of the customer lifecycle - from initial awareness through long-term retention. Each stage offers opportunities for financial services companies to build trust and set themselves apart. By fine-tuning CX strategies across the entire journey, financial institutions can craft more cohesive experiences that foster loyalty and drive growth.
In this article, we'll explore how CX in financial services is evolving towards 2025, examining AI's role in tackling industry-specific challenges and outline strategies for transforming customer experiences, all while empowering the human element that drives exceptional service.
This post features insights from John Sorenson, customer experience leader in the banking industry. John has over 25 years experience managing contact centers and is currently seeking a director-level CX role.
Article topics:
- Customer Experience in Financial Services
- The Customer Lifecycle in Financial Services
- CX Challenges in Financial Services
- Why CX is Necessary in Financial Services
- Enhancing Customer Experience in Financial Services
- How AI is Transforming CX for Financial Services Companies
- The Future of Customer Experience in Financial Services
What is Customer Experience in Financial Services?
Customer experience in financial services covers every time a person interacts with a bank or financial company. This includes:
- When they first learn about a service
- Opening new accounts
- Using their accounts for money matters
- Getting help when they need it
- Solving any problems that come up
It doesn't matter if these happen in person, online, or over the phone. Every interaction counts as part of the customer experience. Here's a great example of exceptional customer experience from a financial services company:
What is the Customer Lifecycle in Financial Services?
The customer lifecycle in financial services is the journey from when a prospective customer learns about a financial product to post-sale service.
There are 6 distinct stages to the customer lifecycle in Financial Services.
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6 Stages of the Customer Lifecycle in Financial Services
The customer lifecycle in financial services offers multiple opportunities to deliver exceptional CX and build customer trust. Each stage also presents unique challenges and chances to stand out from your competitors.
We need to optimize our CX strategies for each stage of the customer lifecycle.
Let's explore each touchpoint:
- Awareness and discovery
- Consideration and evaluation
- Decision and onboarding
- Engagement and usage
- Retention and loyalty
- Exit and Win-back
The lifecycle for any customer starts when they become aware of a financial product or service via marketing touch-points like your company website, ads, content, offers, policies, pre-sales calls, and even chatbots.
During the awareness stage, make it easy for prospective customers to know your company and its offerings. Although not a financial services company, UPS is a great example of a company that puts a lot of effort across channels to tell people they help any small business with everything from shipping to printing to notarizing. UPS makes their potential customers aware of all the products they have, and all the ways they can help them.
How do companies measure awareness and discovery?
- Website visits
- Total accounts opened
- In-person visits
- Brochures downloaded
Tracking awareness and discovery metrics will allow your team to identify where most of the interest in your company comes from.
Customer Experience Opportunity
Make sure your brand looks and feels recognizable across different assets (website, mobile phone, or in-person). It is not just about keeping the brand font consistent but also about focusing on a consistent brand voice. To further drive brand awareness, your company can partner with influencers, sponsor local charity events, and even post signs outside on the street.
Did you know?
Financial services and insurance companies own 16 of the 30 NFL stadium naming rights.
This statistic underscores how much financial institutions value brand awareness and the amount they're willing to invest in awareness and discovery strategies.
At this point customers are aware of your brand and its offerings.
Customers will now start considering and evaluating your financial products and comparing them. In the case of banks for example this could include comparing interest rates, borrowing products, fees, and customer reviews.
90% of banking customers rely on online reviews to make their banking decisions.
Your potential customers will want to interact with your brand through customer service channels, either online or in person, to ask questions or clarify doubts. The quality of these interactions will greatly impact their decision-making at this stage.
Customer Experience Opportunity
Make sure that your current happy customers share their experiences online so prospective buyers can hear from others who've used your products and get to know the kind of CX you provide.
Decision and onboarding stage of the customer lifecycle marks the transition period from when a prospective buyer becomes a customer. A user-friendly and streamlined onboarding process (whether online or in person) will make a positive first impression on your new customer.
According to McKinsey,
Financial institutions offering a fully digital onboarding process witnessed a 20% rise in customer acquisitions
Customer Experience Opportunity
During onboarding, make sure to customize your customers accounts according to their preferences. Personalized onboarding experiences is another way to broach cross selling and up-selling conversations with your new customers.
In this stage, the customer starts using the services like online banking, mobile app usage, or transactions. Ease of use, reliability, and security are critical to maintaining a positive CX. When customers start using your products and services daily, and they become a part of their daily lives, the overall customer lifetime value increases.
Customer Experience Opportunity
After regular product use, your customers may need assistance, and at this point, your company needs to provide a quick resolution to their issue. Conduct regular check-ins, prompt support and problem resolution, and make it simple for your loyal customers to have the issue resolved.
It's an easier path to upsell and offer additional services that align with your customer’s preferences (investment advice, insurance policies, or upgraded accounts).
Retaining customers is far more cost-effective than acquiring new ones. Existing customers are more likely to use additional services and are already familiar with your brand.
Customer Experience Opportunity
Use loyalty programs to keep customers happy and offer incentives like better interest rates and referral bonuses to strengthen customer loyalty and encourage referrals.
Customer churn exists in almost every business. The service recovery paradox is a real thing. If a customer decides to leave your company due to a service failure for a competing product, there is an opportunity to bring them back and make them your most loyal brand advocates.
For more info, check out our most recent article on the service recovery paradox.
Customer Experience Opportunity
To avoid service failures in the first place, a respectful and straightforward account closure process opens the door for future business. Another solution is to offer your customers the option to pause/ freeze their accounts instead of closing them. This is an excellent win-back strategy for re-engaging customers who are about to leave or are at risk of leaving.
7 CX Challenges in Financial Services
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Financial Services companies face industry specific challenges hindering the delivery of customer experiences that drive brand loyalty.
17% of unhappy consumers will tell about their unsatisfactory experience to twice as many people as satisfied customers, and no brand wants bad publicity.
Below is the list of CX challenges faced by financial companies:
1. Outdated technology
Financial services companies struggle with outdated systems that limit their ability to deliver seamless, real-time experiences. Given the pace of technological advancements, integrating new technologies is complex and costly for financial services companies.
2. Data fragmentation
While financial institutions have vast amounts of customer data, its scattered across multiple systems and may not be ready to be integrated into an LLM or Generative AI application.
3. Privacy regulations
Financial Services companies put customer security and data protection first. While this is awesome, it adds extra layers of complexity in leveraging customer data in meaningful ways.
4. Trust maintenance
Building and maintaining trust in a highly regulated industry brings complexity to the relationship building process. Customers expect transparency in fees, services, and security; service failures in these areas will quickly damage that trust beyond repair.
5. Channel consistency
Financial services companies face the challenge of providing seamless service across a multitude of channels - from mobile apps and online portals to social media, phone support, and in-person services. Maintaining consistent quality, security, and personalization across these diverse touch-points requires complex systems to manage, especially given the sensitive nature of financial transactions and data.
6. Process complexity
Financial products and services involve processes and jargon that require explanation from a human representative. An example would be when form signing for home insurance, or a mortgage application, or life insurance, and a question comes up about the contract. Simplifying or automating these intricate conversations requires careful technology integrations.
7. Emotional interactions
Financial matters evoke strong emotions in customers, especially during issues like fraud or account discrepancies in the case of a bank, or an insurance claim surprisingly being denied because of an error. Managing these emotional interactions requires both technology and highly skilled, empathetic frontline agents.
Read more about this in our e-book Navigation: The Future of Banking and Fintech.
Why is CX Necessary in Financial Services?
Customers expect seamless experiences across all interaction channels, making CX the critical differentiator to drive sustainable growth.
Here’s why exceptional CX is necessary in financial services:
1. Market differentiation
Products and services have become commoditized. Personalized customer experiences will help your financial institution stand out from competitors.
Example: Make your customer feel special, give them a call or message them on their birthday or anniversary. Offer special occasion promotions that are personalized to their unique preferences.
2. Loyalty and retention
Exceptional customer experience builds loyalty and reduces churn by proactively addressing customer needs.
Example: A bank proactively offering a lower interest rate on loans for senior citizens or offering competitive borrowing products before a customer needs it. Or an insurance company predicting a move, and reaching out proactively about deals on home insurance or moving insurance.
3. Enhance brand credibility
Positive experiences enhance brand trust and credibility.
Example: In the case of a financial institution, if a fraud claim happens to your customer, imagine being able to take care of this for them in one call because all of your internal data systems are connected.
4. Cross-sell opportunities
Happy customers are more likely to buy into cross-selling and upsell opportunities.
Example: In the case of a bank, a customer may open an investment account after receiving personalized assistance in the initial account creation process, or through working with a financial advisor or banker that addresses their unique pain points.
5. Attract new customers
Positive reviews and 5 star ratings from your existing customers are great ways of attracting new customers.
Example: A satisfied customer’s online review about quick loan approvals might encourage new customers to choose your financial products over a competitor.
How to Enhance Customer Experience in Financial Services
Despite the CX challenges we discussed there are concrete steps your company can take to dramatically improve the customer experience you deliver.
1. Leverage AI for personalization
AI has made personalization easy for financial institutions by analyzing customer data and suggesting offers and services accordingly.
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72% of customers feel that personalization is essential in financial services.
Historically, providing customized experiences to customers was expensive and time-intensive. Still, AI has made this quick and pocket-friendly.
Example: A call center agent from an insurance company with the help of AI, can recommend certain healthcare insurance plans based on a customer’s past transactions.
2. Embrace omnichannel engagement
Customers prefer interacting through various online channels, such as mobile apps and websites, rather than visiting branches physically. Customers expect a consistent CX across all touchpoints, whether in-person interactions, using a smartphone, or desktop.
Example: Customers might begin applying for a mortgage on their smartphone and later complete it on a desktop without losing progress or re-entering information. Seamless channel transition makes the application process convenient for your customer.
3. Prioritize customer data security
Data security is a non-negotiable with financial products and services. Protect your customers from data breaches. Implement advanced authentication methods like biometric verification or multi-factor authentication.
Example: Protect your customers from spam or unsolicited sales calls due to data breeches or data selling. Customers are hesitant to give away their data knowing some financial services companies may sell their data to their partners.
4. Proactive customer support
Your company probably already has data on your customer's spending habits and the queries they raise. You can use this to anticipate customer needs beforehand. Some of the top financial services companies are leveraging their contact center analytics data to predict potential issues and offer solutions to their customers proactively.
Example: In the case of a bank, if a customer applies for a credit card and the sales executive is aware of their travel spending, recommend a credit card that does not charge forex transaction fees if they book an international flight through the card.
How AI is Transforming CX for Financial Services Companies
Technology is not the only way to optimize CX across the customer lifecycle, but it sure helps.
Advancements in AI have expanded the possibilities for financial services companies to deliver exceptional customer experiences.
Only 25% of call centers have successfully integrated AI automation into their daily operations. (45)
A sizeable opportunity is on the table for forward-thinking financial institutions to gain a competitive edge with AI.
Some of the leading insurance, credit, and banking institutions are already successfully leveraging AI-powered software like AmplifAI to transform their CX.
AI capabilities transforming CX in Financial Services
It's the human touch that creates outstanding CX in any industry, including financial services. AI, when implemented thoughtfully, is a powerful enabler removing the barriers that hinder effective training, coaching, and quality management.
By leveraging the AI capabilities we've listed below, financial institutions are transforming their unique CX challenges from a potential point of friction into a powerful differentiator.
1. Unified Data Integration
AI-powered data integration seamlessly connects all of your contact center data. Executives, managers, team leaders, and quality trainers get the full picture by unifying all of the data in your contact center from realtime data sources. AI analyzes and creates data driven personas based on your unique contact center goals.
2. Performance Intelligence
AI-powered role-based dashboards provide clear visibility into your entire contact center. Quickly spot trends, identify top performers, and replicate their behaviors across complex financial products and services. From mortgage inquiries to investment advice, AI helps you understand what drives success in every customer interaction.
2. Data-Driven Coaching
Turn your best agents into your coaching playbook. AI identifies top performer behaviors, guiding supervisors to deliver personalized, effective coaching. Equip your team to handle intricate financial queries with confidence, enhancing customer trust in high-stakes financial discussions.
3. Quality Assurance
In the heavily regulated financial sector, compliance is non-negotiable. AI-driven Auto QA monitors 100% of interactions, ensuring adherence to regulatory requirements across all customer touchpoints. Catch potential issues in real-time, avoid costly fines, and protect your customers' sensitive financial information.
4. Engagement Through Gamification
Keep your agents motivated to be and do their best. AI-powered gamification turns KPI's into engaging challenges and rewards. See immediate boosts in agent performance on metrics like first-call resolution, service level, QA, and CSAT.
These are just some of the many AI use cases already being deployed by the top financial services companies in the world.
The Future of CX in Financial Services
For financial services companies, the key to exceptional customer experience lies not just in technology, but in the people who deliver it. With the right people-centric AI financial services companies can empower their frontline employees with the tools, training, and motivation to excel.
The connection between CX and EX is undeniable. Going into 2025 an AI powered employee-centric approach to contact center transformation isn't just a smart investment – it's vital to the success of your company. By putting your people first through AI-enabled strategies, you're putting your customers first, it's a win-win scenario cementing your position as a leader in customer-centric finance.
Leveraging software like AmplifAI as part of your overall CX strategy will guarantee boosting your bottom line, by building up your frontline.
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