customer journey in retail banking

Customer journey mapping in banking: A 7-step framework for success

In today's competitive banking landscape, providing an exceptional customer experience is crucial. The way to deliver this is through understanding the customer journey, and this is where customer journey mapping comes in. By visualizing the customer's interactions and experiences at each touchpoint, banks can gain valuable insight and make informed decisions that help tether customers to their brand.

Key takeaways

Journey mapping helps identify areas for improving and optimizing the overall customer experience.

79% of companies say their journey maps have allowed them to become more customer-centric.

Traditional banks are under threat—digital-only banks are gaining favor, making CX even more important to differentiate.

What is customer journey mapping in banking?

The customer journey in banking begins the moment the customer starts interacting with your bank’s products and services. It provides a roadmap for how your customers interact with your bank. That can be in the simplest forms, such as opening a digital account or making a transaction. As loyalty builds, customers may come to your bank for mortgages and wealth-building products.

No matter the product or service, customers today expect banks to deliver seamless digital experiences through a website or app. Online banking has opened the door to digital customer journey mapping , where banks can see and analyze every touchpoint a customer makes along the way.

A retail banking customer journey map visually shows every step a customer takes—from the first interaction to capturing every engagement with your bank over time. Customer journey mapping uncovers key insights such as:

What behaviors do customers exhibit

What customers are engaging with on your website or app

What actions customers take or don’t take

Where there’s friction or areas of struggle

Once these insights are visually mapped, banks can use them to improve functionality, fix errors and identify opportunities to increase conversions or decrease time-consuming roadblocks.

Example of a retail banking customer journey map

According to Hanover Research , 79% of companies say their journey maps have allowed them to become more customer-centric. Below is an example of a typical retail banking customer journey.

Image source

Why is customer journey mapping important for banks?

Customer journey mapping empowers banks to gain a deeper understanding of how their customers interact throughout their entire experience with the brand.

During the process, banks can identify and address inconsistencies or gaps in services with the goal of improving customer loyalty, retention, engagement and the overall customer experience.

According to Bankrate's key statistics on digital banking in 2023 , approximately 60% of consumers say they are very or somewhat interested in using a digital-only bank in the next year. The generation most interested in digital banks is millennials—a demographic traditional banks need to grow revenue.

In a highly competitive industry that’s undergone incredible digital transformation in recent years, one size does not fit all. Simply providing digital access to products and services isn’t enough. Customer journey mapping gives banks the opportunity to get a granular picture of the digital experience so they can differentiate and innovate to win over customers.

The benefits of customer journey mapping in banking

Customer journey mapping in banking is a gateway to gaining a deeper understanding of customers, making customer service a priority, improving customer retention rates, optimizing the customer experience, eliminating ineffective touchpoints and better predicting customer behavior.

Below, we’ve identified four of the key benefits of customer journey mapping for retail banks.

1. Improves customer satisfaction

Understanding the customer journey is imperative for banks to improve customer satisfaction. Customer journey mapping uncovers key insights, such as pain points, and empowers banks to proactively address them. By streamlining processes and reducing friction, banks can significantly improve customer satisfaction levels.

2. Enhances customer loyalty

Just as a negative customer experience can drive customers away from your brand, a positive experience is directly linked to customer loyalty. Customers want to do business with a bank that makes their journey effortless and fruitful. By identifying and eliminating pain points, banks can create a seamless and enjoyable experience that encourages customers to stay with the bank for the long term.

3. Increases cross-selling and upselling opportunities

Core offerings such as checking or savings accounts may be the bread and butter for a bank, but to grow revenue, they need to cross-sell and upsell too. Customer journey mapping helps banks identify moments where they can introduce additional products and/or services to existing customers. By understanding the customer's needs at each touchpoint, banks can offer personalized recommendations that add value to the customer's banking experience.

4. Optimize channel integration

With the rise of digital banking, customers now interact with banks through various channels, including online, mobile, and in-person. Customer journey mapping enables banks to optimize the integration of these channels, ensuring a consistent and seamless experience across all touchpoints.

👀 Check out The Complete Guide to Customer Journey Maps for more benefits.

How to create a customer journey map in banking: A 7-step proven framework

Banking customer journeys are critical in today’s world, where there are so many touchpoints to connect with consumers and so many devices they interact on. Because of how important they are, we’ve pulled together a 7-step framework below to set your bank up for success.

1. Define customer segments

Begin by identifying the different customer segments that the bank serves, such as baby boomers, millennials and Gen Z. Each segment has different needs and expectations, requiring tailored customer journey maps.

Various segments may also bank differently. According to research , Gen Z is less likely to have a traditional bank account than millennials or baby boomers. The same study revealed that just 47% of Gen Z respondents, versus 75% of baby boomers and 70% of millennials, claimed to have an account with a traditional bank, credit union, neobank or technology company. Only 28% of baby boomer respondents, compared to 73% of millennials and Gen Z, indicated they had used a mobile banking platform in the last three months.

2. Identify key touchpoints

Map out the various touchpoints where customers interact with the bank, including digital platforms like websites and mobile apps or call centers. Highlight the key stages from initial awareness to becoming a loyal customer.

Examples of touchpoints are:

• Advertising (including digital or print)
• Social media
• Welcome/thank you emails
• Physical branches
• Customer service
• Influencer recommendations
• Peer reviews
• Customer onboarding
• Physical and digital events

👉🏻Learn more about the different touchpoints in The Complete Guide to Customer Journey Maps .

3. Gather customer data and feedback

Engage with customers to gather feedback on their experiences at each touchpoint. Use surveys, polls and live chats, just to name a few, to collect customer feedback.

A voice of customer (VoC) program can help you gather customer feedback. When integrated with a digital experience intelligence (DXI) platform like Glassbox, you get data around the context of customer feedback, so you can understand:

What performance issues the customer experienced

What parts of your website or app customers interact with

Which audience segment they were from (depending on the tool you use)

This data gives you a holistic view of the customer experience and enables data-driven decisions.

👉🏻Find out how your bank can benefit from implementing a VoC program in The Complete Guide to Voice of Customer .

4. Map the customer journey

Create a visual representation of the customer journey, including all stages and touchpoints. This can be done using flowcharts, diagrams or specialized customer journey mapping software. Emphasize the importance of empathy and understanding customer emotions.

👉🏻Find customer journey map examples and templates in The Complete Guide to Customer Journey Maps .

5. Identify pain points and opportunities

With a customer journey map in place, banks can analyze it to identify pain points, bottlenecks and opportunities for improvement. With this data in hand, banks can prioritize these areas and implement changes to enhance the customer experience.

It’s important to understand the issues and challenges banking customers face. We’ve outlined the most common ones below:

Complex onboarding processes: Overly complicated onboarding with many steps to complete provides a negative first impression that diminishes customer experience.

Poor user experience (UX): Confusing website or app navigation, slow loading times and unresponsive design can frustrate customers and cause them to leave.

Lack of personalization: Customers may feel that their bank doesn’t understand their individual needs, resulting in irrelevant offers and services.

Complex products and services: Difficulty understanding complex financial products and services can hinder decision-making.

Limited digital services: Banks that lag in offering digital services, such as mobile check deposits, digital account opening or online loan applications, may frustrate customers.

Cross-channel inconsistency: Varying experiences between online, mobile and in-branch services can cause confusion and frustration.

Ineffective communication: Customers may not receive timely or relevant communication from their bank, leading to missed opportunities or misunderstandings.

Inadequate customer support: Difficulty reaching customer support or receiving timely assistance when facing issues or inquiries can cause frustration.

Security concerns: Worries about data breaches, identity theft and fraudulent activities can erode trust in online banking.

🔥 Hot tip: Using a digital experience intelligence tool like Glassbox to identify points of friction at important touchpoints in the digital journey is imperative when trying to identify opportunities for optimization and improvements.

6. Use data to make necessary changes and improvements

Use insights to make data-driven improvements to the banking customer journey. Leverage information gained from journey visualization, AI-driven insights and business impact metrics to take actions that improve the customer experience.

7. Continuously monitor and update

The customer journey isn’t static and is continuously evolving. Monitor customer feedback, industry trends and changes in customer behavior regularly to ensure it’s working effectively. Having access to tools that enable banks to easily access the most meaningful insights is critical in a digital era, where the best digital experiences create loyal and engaged customers.

🔥 Hot tip: Typical data analytics tools can offer useful quantitative data, but digital experience intelligence takes insights far beyond these capabilities for macro and micro conversion points that matter most.

With a comprehensive suite of sophisticated tools, you can optimize the parts of the customer digital journey that will provide the most value to your customers and, in turn, your bottom line. Get more information about the tools you need to get ahead in the blog, Digital customer journey stages exposed: From awareness to purchase and beyond .

Examples of customer journey mapping in banking

Some high-profile banks are proficient in customer journey mapping. Whether striving to improve customer experience in a contact center or introducing new customer-centric offerings, these banks have this in common—they understand the value of customer journey mapping for retail banking. Below are examples of three banks doing customer journey mapping right.

1. Citizens Bank

Citizens Bank leveraged journey mapping to improve customer experiences with its contact centers. The bank used reviews and customer feedback for journey mapping. In the end, the mapping exercise led Citizens Bank to shift focus away from an internal metric of call handling time to a more customer-centric metric of improved first-call resolution (FCR).

2. Bank of America

Bank of America stands out for creating exceptional customer experiences and having a customer-centric approach. By mapping the customer journey at all stages—awareness, consideration, purchase, usage, loyalty and advocacy—the bank improved its mobile and online banking offerings, created a cash-back rewards program and introduced online appointments.

3. Wells Fargo

In its journey to customer experience innovation, Wells Fargo leveraged customer journey mapping to help customers better manage their finances. This process led to the introduction of a new app that helps customers keep track of and maintain more control over recurring payments for services they may no longer use.

It pays to understand your customers’ banking journeys more clearly

Customer journey mapping is a valuable tool for banks to enhance the customer experience. By understanding the customer's perspective and identifying pain points, banks can make informed decisions to streamline processes, optimize channels and ultimately provide a seamless and exceptional banking experience.

A digital experience intelligence (DXI) platform like Glassbox provides rich insights that show you the complete picture of what your banking customers are doing when engaging with your website or app—and, even more importantly, why they’re behaving that way. These advanced insights can be used to improve the banking customer journey. Learn more at glassbox.com .

1. What is customer journey mapping in banking?

A banking customer journey map visually shows every step a customer takes with digital platforms—from the first interaction to understanding everything they do while engaging with the bank over time. Customer journey mapping uncovers key insights and pain points so banks can improve the customer experience.

2. What are the benefits of customer journey mapping for banks?

The four primary benefits of customer journey mapping are:

Improved customer satisfaction

Enhanced customer loyalty

Increased cross-selling and upselling opportunities

Optimized channel integration

3. What are the steps to implementing customer journey mapping for banks?

The seven steps a bank should take to implement customer journey mapping are:

Define customer segments

Identify key touchpoints

Gather customer data and feedback

Map the customer journey

Identify pain points and opportunities

Use data to make necessary changes and improvements

Continuously monitor and update

Lauren Barber

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Retail banking customer journey map: our guide in 7 steps

Marie Jehanne

October 8, 2023 | 5 min read

Last Updated: Oct 9, 2023

Table of Contents

Defining Your Retail Banking Customer Segments

Understanding retail banking customer journey mapping, what is customer journey mapping in retail banking, why is customer journey mapping essential for banks.

Creating a customer journey map in the context of retail banking is a strategic initiative that enhances the customer experience. The process begins with the identification of the customer persona. This involves a detailed analysis of the customer’s demographics, banking preferences, and financial needs. It is crucial to understand the customer’s motivations, challenges, and goals to effectively cater to their needs.

The second step involves outlining the stages of the customer’s journey. This includes the awareness stage, where the customer first becomes aware of the bank’s financial services, the consideration stage, where the customer evaluates the bank’s offerings, the decision stage, where the customer chooses to bank with the institution, and the advocacy stage, where the customer becomes a loyal patron and recommends the bank to others.

The third and fourth steps involve identifying the key customer touchpoints and the customer’s goals at each stage. Touchpoints are the various points of interaction the customer has with the bank, such as visiting the bank’s website, speaking to a customer service representative, or using the bank’s digital banking services. The customer’s goals may include tasks they aim to accomplish, such as completing a transaction process, applying for a loan, or setting up a direct deposit. The fifth step involves mapping out the customer’s emotions at each stage of their journey.

This is crucial in understanding the customer’s experience and identifying areas for improvement. The sixth step involves identifying the moments of truth, which are significant interactions that can make or break the customer’s relationship with the bank.

The final step involves taking action based on the insights gained from the customer journey map. This may involve making changes to improve the customer experience, tracking the effectiveness of these changes, and consistently refining the customer journey map based on new insights and customer feedback.

In the realm of retail banking, defining customer segments is a critical process that enables banks to understand and cater to the diverse needs of their customers. This process involves dividing the customer base into distinct groups based on shared characteristics such as age, income level, banking habits, and financial goals.

By defining these segments, banks can tailor their products, services, and communication strategies to meet the specific needs of each group. For instance, a segment of young professionals may prioritize digital banking services and financial products that assist in managing student loans. Conversely, a segment of retirees may value in-person customer service and products that offer stable investment returns.

Know what drives engagement and abandonment on your sites and mobile apps .

By understanding these distinct segments, banks can develop targeted marketing strategies, design products and services that meet the unique needs of each segment, and ultimately enhance customer satisfaction and loyalty.

Moreover, defining customer segments allows banks to gain a deeper understanding of their customer base. It provides insights into the preferences, behaviors , and needs of each segment, enabling banks to make informed decisions about product development, marketing strategies, and customer service initiatives. Furthermore, it allows banks to track the performance of each segment, identify trends and patterns, and adjust their strategies accordingly.

Customer journey mapping in retail banking is a strategic tool that allows banks to visualize and understand the customer’s experience from their perspective. The journey map traces the customer’s path from their first interaction with the bank, through their engagement with the bank’s financial services, and into a long-term banking relationship.

By mapping out this journey, banks can identify opportunities for improvement, enhance customer satisfaction, and increase customer retention rates. A customer journey map typically includes the stages of the customer’s journey, the customer’s goals at each stage, the touchpoints or interactions the customer has with the bank, the customer’s emotions at each stage, and the moments of truth.

By understanding these elements, banks can design and deliver a customer experience that meets and exceeds customer expectations. Furthermore, a customer journey map is not a static document.

It should be regularly updated and refined based on new insights, changes in customer behavior, and feedback from customers. This ensures that the map accurately reflects the current customer experience and continues to provide valuable insights for improving customer satisfaction and loyalty.

Customer journey mapping in retail banking is a strategic process that involves creating a visual representation of the customer’s experience from their perspective. It traces the customer’s journey from their initial interaction with the bank, through their engagement with various banking services, and into a long-term banking relationship. The customer journey map includes various elements such as the stages of the customer’s journey, their goals at each stage, the touchpoints or interactions they have with the bank, their emotions throughout the journey, and the critical moments of truth. By understanding and analyzing these elements, banks can gain valuable insights into the customer’s needs, preferences, and pain points.

Furthermore, customer journey mapping allows banks to identify areas of improvement in their customer experience. By pinpointing the stages of the journey where customers experience difficulties or dissatisfaction, banks can take targeted action to improve these areas. This could involve enhancing the usability of their website , improving their customer service, or refining their product offerings.

Finally, customer journey mapping in retail banking is not a one-time process.

It requires ongoing monitoring and refinement to ensure that the map accurately reflects the evolving customer experience. This involves gathering regular feedback from customers, analyzing customer behavior data, and staying abreast of changes in the banking industry and customer expectations. This continuous refinement ensures that the customer journey map remains a valuable tool for improving the customer experience and driving business growth.

Customer journey mapping has become a cornerstone in the banking operations, providing a detailed perspective of the customer experience.

This process visually represents the customer’s interactions from the initial contact to long-term engagement, focusing on the key customer touchpoints. In the realm of financial services, understanding the customer’s journey is critical to meet and exceed customer expectations, address their needs, and mitigate potential frustrations.

The advent of digital banking has amplified the number of customer touchpoints, adding complexity to the customer journey. From online transactions to mobile banking apps, these touchpoints are integral parts of the transaction process.

Understanding this journey is crucial for banks to deliver an optimized customer experience. Customer journey mapping identifies gaps in services, enabling banks to enhance their customer service. For example, if a customer encounters difficulties during the transaction process on a mobile banking app, the journey map will highlight this issue, prompting the bank to make necessary improvements.

Moreover, customer journey mapping is a strategic tool for anticipating the future needs of customers. By analyzing past interactions and behaviors, banks can predict future requirements, enabling them to proactively develop and offer services or products tailored to these needs. This forward-thinking approach not only improves the customer experience but also fosters customer retention.

It also presents opportunities for cross-selling and up-selling, which can significantly boost a bank’s position in the sales funnel. Lastly, customer journey mapping is a strategic instrument for differentiation in the competitive banking sector.

By delivering a superior customer experience informed by customer feedback and a deep understanding of the customer’s journey, banks can increase customer retention. This not only helps to maintain a competitive edge but also contributes to the growth of the bank’s position in the sales funnel.

In conclusion, customer journey mapping is not just a tool for improving customer service, but a strategic instrument that drives business performance.

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Passionate about digital for several years, I am the Inbound Content Manager SEO at Contentsquare. My goal? To teach you how to improve the digital CX of your website and activate the right acquisition levers to generate more traffic on your site and therefore…more sales!

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Taking Digital Banking Beyond Customer Journeys

July 05, 2022  By  Jungkiu Choi ,  Mark Dynes ,  Yashraj Erande , and  Diana Rosioru

• Customers are moving to digital channels faster than they have in the past. Our 2021 retail banking report found that online banking use rose by 23%, and mobile banking use was up by 30% over the previous year.
• Digital banks and fintech insurgents are on the rise. There are about 250 digital challenger banks worldwide, with more on the way. Investment in fintech firms totaled $93 billion in the third quarter of 2021 alone.
• Successful digital transformations deliver results. Our case experience shows cost reductions of 15% to 20%, improvements of 20% to 40% in efficiency and error rate reduction, increases of 20 to 30 points in customer satisfaction scores, and two- to fourfold acceleration in the delivery of new products and services.

Many of the missteps that banks make can be avoided by building their digital transformation programs around a full front-to-back approach focused on customer value streams.

When it comes to digital transformations , financial institutions have the second-highest success rate after the technology, media, and telecommunications sector. But six out of ten financial services companies still fail to achieve their transformation goals. One reason, as our past research has shown, is that most companies, including banks, do not have all of the six requisite digital success factors in place. In addition, our experience with more than 100 cases involving more than 50 clients over the last five years suggests that too many financial institutions do not base their transformation programs on fully meeting their customers' needs.

Banks have become adept at focusing transformations on customer journeys —the process that customers go through to meet a need, such as opening an account, borrowing money, or securing help with transactions or payments. This is a great first step, but banks often fail to take the critical next steps required to redesign and digitize their organizations and operating models around customer value streams: the value-adding activities that support those customer journeys from end to end.

A value stream approach encompasses all the activities and interactions a bank needs to manage from the front (customer facing) end to the back end (process operations, risk, legal and compliance, and technology). Since this kind of full overhaul also requires agile ways of working to enable the necessary speed and flexibility, it can become a heavy organizational lift.

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Banks have ample reasons to get their digital transformations right. Customers are moving to digital channels faster than they have in the past. Our 2021 retail banking report found that the use of online banking had increased by 23% and mobile banking use was up 30% over the previous year. Meanwhile, digital banks and fintech insurgents are on the rise. We reported last year that there are about 250 digital challenger banks worldwide, with more on the way. Investment in fintech firms totaled $93 billion in the third quarter of 2021 alone, according to BCG’s FinTech Control Tower .

Banks often fail to take the critical steps required to redesign and digitize their organizations and operating models around customer value streams.

But perhaps the strongest reason is the results that successful digital transformations deliver. For banks, our case experience shows cost reductions of 15% to 20% (through decreases in the current cost base or avoidance of future cost increases), improvements of 20% to 40% in efficiency and error rate reduction, increases of 20 to 30 points in customer satisfaction scores, and two- to fourfold acceleration in the delivery of new products and services.

In our experience, many of the missteps that banks make—such as putting solutions before problems, pursuing an internal focus, treating transformation as a tech issue, digitizing before improving the underlying process, and not adjusting the enabling operating model—can be avoided by going beyond customer journeys and taking a full front-to-back value stream approach. Here’s how.

The Banking Customer Journey

The customer journey comprises the series of interactions that begins when a customer perceives a need, such as resolving a service issue or buying a home, and continues until the need is met. It involves numerous decision-making events that customers encounter in their physical or virtual interactions with one or more financial institutions. Each interaction, in turn, sets off a chain reaction behind the scenes, which cuts across multiple parts of the banking organization affecting both the customer and the employee experience. This chain of activity extends across the operating model and bank processes, including functions that are not visible to customers, such as risk and compliance, technology, and change management and agile delivery. (See Exhibit 1.)

In each major line of business (retail banking, wealth management, small- and medium-enterprise banking, and commercial or corporate banking), banks typically handle about 50 customer journeys that can grouped into five broad “megajourneys.” (See Exhibit 2.) These include:

• Helping the customer open a new account
• Helping the customer borrow money
• Helping to promote the customer's financial well-being
• Helping the customer with transactions and payments
• Helping to solve the customer's problems and issues

Successful banks start with the understanding that these journeys encompass the entire customer experience from beginning to end, and they organize themselves to address customer needs in ways that mirror customers’ perspective. They also leverage the resulting transformation of the bank from a product and service focus to a customer-centric focus to motivate people to go above and beyond the basic requirements for every customer.

Customer Value Streams

When banks seek to digitize, they often make one of four mistakes:

• They make big investments in digital solutions that are focused on the customer experience, forgetting to wire the improvements through to the back end (process steps, regulatory policies, and risk assessment after the customer's application or request is received). This can lead to improvements in customer satisfaction, but the bank gets no benefit from back-end alignments and improvements—such as straight-through processing—and therefore limited ROI.
• They make big investments in automating the back end, which lead to incremental gains but do not fundamentally resolve customers’ pain points or address their needs, or it takes too long to realize the intended improvements.
• They invest in transforming and modernizing legacy technology but do not address the disconnects or misalignments between IT and business processes, resulting in partial or delayed impact.
• They make fragmented investments across silos and end up more or less maintaining the status quo in a more digitized state or achieving only incremental improvements.

Front-to-back digitization of the customer journey requires developing a data- and analytics-powered digital experience that provides personalized engagement, efficiency, and convenience throughout the journey at low cost. Based on real-life situations, such digitized journeys anticipate demands and introduce touchpoints with offerings or suggestions drawn from the bank’s full portfolio of products, services, and capabilities. Properly managed, they involve interactions that leverage new technologies and insights about user behavior and add value on all channels for all users, be they customers, agents, or employees. Because the journeys cut across service channels and business divisions—which for many banks means breaking down siloed operations—digitizing them requires a transformation in how the bank does business. Hence the move by successful banks to organize customer journeys around customer value streams and agile ways of working.

Successful banks start with the understanding that customer journeys encompass the entire customer experience from beginning to end, and they organize themselves to address customer needs in ways that mirror customers’ perspective.

Value streams and agile are also vehicles for change. Incumbents, in particular, face embedded organizations, entrenched silos, and longstanding ways of working that slow and sometimes thwart digital initiatives. (See “The Challenge for Incumbents.”) To overcome such impediments, banks need to consolidate digitization initiatives by integrating cross-functional design and delivery teams and gain a single view of investments and improvements in current and reimagined products and services. They can then build critical new capabilities, such as data-driven customer engagement, as part of the digitization program and leverage them across the appropriate value streams. Management can prioritize the backlog of in-process digitization initiatives according to an objective, consistent assessment of their desirability, viability, and feasibility—an analysis known as DVF.

The Challenge for Incumbents

Properly organized, value streams and agile ways of working deliver capabilities and features that are optimized for customer and employee needs as well as for process cost and controls. Rethinking the digitization business case on the basis of end-to-end customer journeys realigns the bank’s resources into multifunctional teams around the resulting value streams. The digitization levers—automation, artificial intelligence, lean operations, digital sales, and data and digital-technology platforms—can be deployed in a coordinated manner, value stream by value stream, until the bank’s organization and operations have been thoroughly transformed.

The value stream approach unlocks cost and experience improvements not otherwise possible. And the value can come quickly. For example, the small-business unsecured lending value stream for one Asian bank registered improvements of 800% in applications, 400% in approvals, and 500% (in dollar terms) in credit lines approved—all based on its first minimum viable product (MVP) release. Another bank found that a new app generated more than the equivalent of a full month of its sales staff’s total business after release of the second-generation MVP.

You Have to Be Agile

One of the six key success factors for digital transformation is adoption of an agile mindset. Agile companies address roadblocks quickly, adapt to changing contexts, and drive cross-functional, mission-oriented, “fail fast and learn fast” behavior into the wider organization. They deal with individual challenges without losing sight of the broader goals.

BCG has published extensively on agile ways of working and their strong link to digital transformations. (See “BCG on Agile.”) Writing about the rise of digital banking in Asia-Pacific in 2021, we observed that successfully building and scaling a digital bank requires a focus on three pillars that stimulate customer engagement and ensure critical business agility: customer obsession, scalable and flexible technology, and agile organization and governance. The third of these has become critical not only to digital operations but to the transformation itself.

BCG on Agile

Agile and agile transformations, agile in financial institutions.

There are a couple of key reasons. First, evidence indicates that digital banks work best when run independently, allowing them to focus on their own success through rapid decision making and execution. Second, organizational structures should enable collaboration between digital talent—including IT staff—and bankers. An agile structure echoes the growth strategies of successful technology firms. An iterative process of testing and execution underpins a flexible and efficient organization, but the bank must capture this approach in the governance framework of systems, controls, and processes. A clear division of roles and corresponding decision rights and responsibilities among business functions legitimizes and balances interactions.

Like digital transformations themselves, achieving agile at scale requires that companies address their full operating model. Now more than ever, they need to extend agile deeper into their business and culture. And while agile values are consistent—including a strong customer focus and empowered cross-functional teams working with autonomy toward aligned goals and working iteratively in short “sprints” to allow for transparency and reprioritization—each bank needs to adopt the agile approach to its own operating model. For example, OP Financial Group, Finland’s largest financial institution, followed seven guiding principles when adapting its operating model to an agile approach. (See Exhibit 3.)

The impact can be substantial. We have seen banks achieve a 10% to 20% increase in customer satisfaction and return on digital investment, two to four times faster time to market and new-product development, a 15% to 25% reduction in development costs, and a better than 90% improvement in employee engagement.

Still, far too many banks continue to follow a waterfall approach to product development or process improvement. Here, the full specs are set at the start—often based on imprecise or ill-defined goals; the product or process is designed, developed, and tested sequentially, with many handovers; and delivery (which can take 12 months) is often delayed and the project over budget. In the end, requirements have changed, the product or process is out of date, or the customer doesn’t get what he or she really needs.

Digitizing Front to Back

The best way for banks to undertake front-to-back transformation is to operate at the intersection of the four major pieces of the puzzle shown in Exhibit 4.

First, customer journey digitization. This is about delivering a “Wow!” customer experience through world-class interfaces and workflows. The major effort should be getting the workflow process right from the customer perspective using human-centric design principles.

Second, scalable tech-ops, or ensuring that the process doesn’t stand on bamboo shoots. Our best clients have leveraged cloud technologies and advanced-technology architecture to power customer journeys. Cyberfusion—unifying security and related functions—and digital-fraud prevention are a big part of this. Good technology infrastructure is flexible, scalable, and reliable.

Third, intelligent systems: using data science to ensure that the processes and operations are smart. Every time a customer goes through a journey, the system becomes smarter about two things: the customer and the process. This continuous improvement requires creating a data lake infrastructure that can absorb process DNA and customer DNA to generate insights.

Fourth, the right governance and policy guardrails. The customer journey, technology, and market intelligence should all flow through risk policies and governance policies and procedures that the institution is comfortable with. These guardrails are established and then codified into the rule engines, models, workflows, deviations, escalations, flags, access privileges, and so on.

All four pieces of the puzzle are required for a truly sustainable front-to back transformation, and they must be pursued with expertise, rigor, and effective change management discipline. In our experience, successful banks transform their operations one or a few value streams at a time, following a multistep process for each one. We outline this process below.

One of the six key success factors for digital transformation is adoption of an agile mindset.

Establish the purpose and objectives. Each bank is different, but most will set goals for their transformations that reflect what they want to deliver for both customers and the bank. For customers, the goals will involve reinventing journeys for greater satisfaction and improved experience (faster turnaround time, optional branch visits, or greater transparency on processes, for example). Common goals for the bank include increasing customer satisfaction across the interactions that make up the journey (typically measured by net promoter scores), improving the cost-to-income ratio (through operational process efficiencies and automation), and building the enterprise’s agility and digital capabilities to improve speed to market and execution.

For most banks, the key ingredients of success will include the following:

• Reimagined Capabilities: Identifying and addressing capability gaps and improving processes, approach, and culture. This includes acquiring zero-based design capabilities and in-sourcing digital tools that enable agile development cycles, such as collaboration tools, design systems, and common code libraries. All these moves can help shift the bank towards a lean and agile organization, establish automated development processes, and eliminate work and redundant capabilities throughout product development and value delivery to customers.
• Bold Business Outcomes: Establishing targets based on the art of the possible rather than incrementalism; replacing siloed, functional-service-level agreement metrics with full front-to-back measurements of success. For example, targets can include reducing turnaround time by more than half, reducing error rates by more than half, and doubling or quadrupling digital sales.
• Simplified and Automated Processes: Reducing work and rework across sales, operations, and service; centralizing, simplifying, eliminating, and standardizing work before implementing automation; and eliminating management errors at the back end by fixing front-to-back communication and alignment.
• Improved Risk Controls: Building risk and compliance into design instead of adding them later, organizing to allow risk and compliance and business teams to jointly solve problems, and implementing robust, user-friendly, efficient controls. Operations risk controls can be built as algorithmic modules so they are traceable and auditable.
• Transformed Technology: Tying technology, digital, and data investments to use cases; removing technology duplication across silos; and integrating design and delivery to eliminate waste. This technology transformation can be accomplished using cloud platforms (discussed below).

Put fully cross-functional teams in place. A customer journey involves many moving parts, including some that have no direct contact with customers. Behind-the-scenes functions, such as operations, compliance, legal, risk, and technology, must be included in the customer value stream teams from the start. These are often brought in too late, and even functions that have direct customer impact, such as marketing and operations, are sometimes neglected. Generally, any function that has a meaningful role in shaping the customer experience, even if only in the background, should have a seat at the value stream table.

In addition to spanning the full value stream and technology stack, teams need a dedicated leader who is 100% assigned to the role. (See Exhibit 5.) Other expert roles and support functions may require only a partial time commitment but should carry clearly defined accountability. Some topics (such as process simplification and technology architecture) may require setting up subteams to fully flesh out solutions.

Teams need to be trained in agile ways of working so they learn how to work in quick sprints, establish strong feedback loops with customers (both external and internal), and pursue a process of continuous product or service improvement at each stage of the value stream.

Achieving success typically requires fully empowering the teams and making them permanent components of the organization, creating a supporting ecosystem, and putting cross-functional value stream work at the top of the organization’s change agenda.

Understand the current state of the customer journey. In a 2019 white paper on better understanding wealth management clients , BCG observed that while private banks and wealth managers collect a lot of data, they generally focus on what is happening rather than on the why —what caused a certain customer behavior or decision. As a result, they miss or misunderstand specific customer pain points and fail to use digital tools and platforms to full effect. Offerings are not integrated into the customer journey and digital investment is dedicated to standalone deliverables.

A true understanding of customer behaviors establishes a baseline for analyzing the current customer journey from both customers’ and bank employees’ points of view. It sets the foundation for the future journey and the products and services that will be designed, as well as for the supporting operational, financial, marketing, legal and compliance, and technology ramifications.

Any function that has a meaningful role in shaping the customer experience, even if only in the background, should have a seat at the value stream table.

One often overlooked method that can help develop this level of understanding is ethnographic research, or the study of human behavior in context. Design experts are trained to observe customer behaviors from multiple perspectives by applying a wide set of research tools and methods. They can unveil what traditional marketing research methods sometimes overlook: why customers behave in a certain way and what is the underlying motivation behind the behavior. The key principle is not to ask customers directly about the decisions they are making but to step into their shoes and observe them in the context of a given situation. Researchers monitor or interact with study participants in their real-life environment.

In a banking context, this may involve observing a couple having a conversation about their financial plans for retirement, following a young professional performing tasks at a branch, or studying a client meeting with a relationship manager. Ethnographic research enables designers to identify recurring pain points in the customer’s journey that would not necessarily be visible out of context.

When well conducted, ethnographic research leads to a better understanding of customers’ motivations for using the products and services in question. It uncovers their feelings towards brands and competitors; their reactions to new ideas, products, and services; and their experiences with products and services. The research findings can be used to conduct value stream mapping of the current journey that explains the behaviors and unmet needs of customers, frames the problems to be solved, and identifies the product and service features most likely to drive business value.

In addition, at this stage, the bank should assess its processes, end-to-end error rates, turnaround times, regulatory policies and requirements, risk appetite and control measures, and relevant technology modules. Most banks find that their assumptions do not accurately reflect reality. They discover that many documents are outdated, for example, and that identifying relevant regulatory policies is not easy unless they have a well-managed knowledge management system with the right taxonomy and enterprise search capabilities. Policies are often written in a confusing way. Gaining an accurate understanding of current circumstances is critical to determining what needs to be changed and improved.

Design the desired end state and prioritize the initiatives needed to get there. Based on their ethnographic research, value stream mapping, and assessment of current processes, banks can design an ideal journey that addresses both the customer interfaces and the back-end implications. They should approach the challenge unconstrained by the realities of their current situation, setting aside such considerations as regulatory requirements, tech platform, ways of working, and embedded processes in order to reimagine the possible. With the new end state in hand, they can then seek feedback and alignment with those responsible for the various stages of the value stream. This will identify the changes in processes, regulatory policies, risk appetite, and digital tools and modules needed to make the desired customer journey a reality. The outcomes should include a definition of the end-state customer journey that addresses customer and employee pain points and barriers to implementation, a prioritized list of change initiatives to enable the new journey, the features of the early MVPs that will form the basis of implementation, and a list of quick wins.

The customer journey itself can be defined as a bundle of functionalities, each of which can be prioritized and broken down into a series of tasks that will form the work backlog of the value stream teams. Prioritization should be based on a DVF analysis: how important is each task to customers, does it have an attractive value to the bank, and can we do it? Typically, internal changes are addressed first and customer changes later, once the internal foundations are in place. The criteria for prioritizing changes should include the expected weight of impact and an assessment of their feasibility for key functions such as technology, risk, compliance, sales, and operations.

The top-priority initiatives can then be bundled into a series of MVPs, each with a defined scope of features. A single MVP can take the form of a change in process, regulatory policies, an app or website, or tech solution architecture, among other things. An overall MVP roadmap sets out how many MVPs are needed to move from the current to the desired state of the customer journey. What's important is to take an integrated perspective and determine priorities based on DVF. In most cases, 70% to 80% of the total impact can be realized in the first two MVPs.

A true understanding of customer behaviors establishes a baseline for analyzing the current customer journey from both customers’ and bank employees’ points of view.

Two practical principles should drive MVP prioritization. First, early MVPs should focus on back-end features rather than customer interface features, improving and de-risking them before launch. Second, banks should put a strong emphasis on feasibility in the beginning and limit the features to be changed to about 20 in number. More balanced DVF weightings can be assigned later.

Use cloud platforms. Many banks, especially in emerging markets, run their operations using legacy on-premises technology, which is time-consuming, inefficient, and expensive to update. Banks that successfully transform digitally move their operations, data, and workloads to the cloud, often employing “sandbox” platforms, or isolated testing environments, in the process.

When technology layers—including customer and frontline engagement, integration and APIs, data and analytics, security, and infrastructure—are moved to or built on the cloud, new-technology and application development is faster, more reliable, and more easily scalable. Significant innovations in cloud platforms and the increasing availability of cloud-based tools provide banks with greater flexibility and speed. In time, the cloud can take over most, if not all, legacy on-premises functions, and most of the analytics tools that banks will want to incorporate, such as AI and machine learning, will run better as a result.

Design and prototype the first MVP. This phase has three main steps that most successful banks follow, although they may iterate several times within each one. The goal is to sprint through each step toward an MVP that can be tested with users to generate the feedback needed to refine and improve it. (See Exhibit 6.)

The first step involves an in-depth analysis of the task. This includes defining a process with desirable user workflows (for both customers and employees), setting up the tech development environment in the cloud, and translating the user workflow into a tech workflow for designing the solution. It also involves redefining relevant regulatory policies and risk control measures.

Next comes MVP design. In this step, the team develops an illustrative wireframe—a two-dimensional illustration of how the application will work—clarifies the business requirements for the tech team, and translates these into a software requirements specification containing the detailed functional requirements for development of the MVP.

Moving from design to prototype involves designing and refining the user interface (front and back ends) in accordance with feedback from user tests (with both customers and employees). The interfaces can then be coded, implemented, and integrated with internal systems. It may also be necessary to develop new regulatory-policy packages and risk control measures that reflect input from relevant stakeholders.

Pilot, learn, and prepare to scale up. Piloting the MVP with users is about validating hypotheses, collecting information on users’ adoption behaviors, and deriving the lessons that can form the basis for a process of continuous improvement. Pilots can also be used to test whether intended improvements work as designed. The key steps are:

• Defining the key hypothesis to be validated
• Developing a clear customer acquisition approach and sales force engagement plan
• Building a rigorous measurement approach and key performance indicators to monitor such factors as error rate, turnaround time, new customers acquired, and new-customer inquiries
• Developing an in-depth qualitative feedback loop to collect insights to be acted on—the “why” behind the actual performance

At the same time, banks can develop a plan for rolling out or scaling up the new product. This involves identifying the target customer segments, setting quantitative and qualitative KPIs, and readying the branch network and sales team for rollout, including sufficient training for branch, operations, and sales staff.

After launching the first MVP, the team can apply validated learnings in subsequent MVPs while continuing to test, learn, and refine the initial pilot. The first MVPs can then be scaled up. The next MVPs follow the same design, develop, pilot, learn, and scale cycle.

The Resourcing Requirements Will Evolve

The front-to-back approach is a structured process for executing the transformation and digitization of each value stream. The agile teams assigned to design and implement the components of the transformation constitute permanent modifications to the bank’s organization and operating model. Individual teams' makeup will evolve over time as they work through the MVP iteration process and move from addressing one part of the value stream to the next. (See Exhibits 7 and 8.) For example, the ratio of coordinators (those who coordinate across various business units and functions) to generators (those who generate ideas to improve and design the solutions) to doers (those who incorporate the solutions into systems and processes) will shift from 50-50-0 to 5-15-80 as the team’s work evolves from designing the vision and strategy to reimagining the customer journey to designing and implementing the MVPs. Each bank’s roadmap will be different, determined by such factors as the number of changes the bank can digest at once, the adjustment of features based on MVP piloting and testing, and the availability and capability of IT platforms and resources.

Leading banks are already organizing solution delivery around customer value streams. They have defined the critical steps, assigned cross-functional teams that use agile ways of working to each one, and given those teams responsibility for product management and change, including product revenues and delivery.

The front-to-back value stream approach represents a huge opportunity for banks that have not yet tackled full digital transformation, as well as for those that have tried to transform and come up short. The steps described above are straightforward, but it pays to remember a few key principles. Put customer and employee needs first—and keep them there. Perfection is an enemy of speed. Test, learn, adapt, modify, and move on. Agile is a prerequisite and a high-impact way of thinking, working, and executing. Dream big and transformational, but be practical in your approach.

Managing Director & Senior Partner

Managing Director & Partner

Mumbai - Nariman Point

Lead Strategic Designer

Platinion – Milan

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• Blog Banking

Guide to Creating a Retail Banking Customer Journey Map

• Author: Wavetec
• Published: April 24, 2024

The retail banking customer journey map is essential for banks seeking to understand how customers interact with their services at various stages. 

This map outlines the key touchpoints where customers engage with the bank , from opening an account to applying for a loan or using digital platforms like mobile apps or online banking.

Understanding this journey allows banks to identify where customers encounter challenges and the moments that create lasting positive impressions. 

Banks can improve customer satisfaction, build loyalty, and increase overall efficiency by focusing on these interactions. 

The purpose of creating a retail banking customer journey map is to create a clearer picture of the customer’s experience, enabling banks to tailor their products, services, and communication strategies to effectively meet customers’ needs and expectations.

What Is Customer Journey Mapping in Banking?

Customer journey mapping in banking visually represents a customer’s entire experience with a bank, from initial awareness to the final interaction. 

This map contains every touchpoint where customers interact with the bank , including physical branches, ATMs, call centers, websites, mobile apps, and social media platforms.

In retail banking, customer journey mapping helps to identify all customer interactions, emotions, and experiences, offering insights into what drives satisfaction and where frustrations may occur. 

By examining each step in the customer journey, banks can pinpoint areas for improvement, such as reducing wait times, increasing customer service, or simplifying online banking processes.

The ultimate goal of customer journey mapping is to improve customer experience and ensure that the bank’s services are smooth and meet customer expectations. 

This approach enables banks to build stronger customer relationships, increasing loyalty, customer retention, and overall satisfaction.

Creating a Retail Banking Customer Journey Map

Creating a retail banking customer journey map involves charting every customer interaction with a bank, from the first contact to ongoing engagement. 

This process reveals key touchpoints, uncovers customer needs and highlights opportunities to augment the customer experience.

When mapping the customer’s journey in banking , banks can identify ways to rationalize operations, decrease friction, and improve customer satisfaction. 

This approach also helps banks align internal processes with customer expectations , strengthening customer relationships and loyalty. Let’s take a look at how it is done :

1. Data Collection Methods

Collecting data is a critical step in mapping the retail banking customer journey . Banks gather information from various sources, including surveys, customer feedback , transaction histories, and digital analytics . These methods offer insights into customer behavior, preferences, and pain points.

Digital banking customer journey data is precious, as it captures interactions on websites, mobile apps, and other digital platforms. 

This information helps banks understand how customers navigate their services , which touchpoints they use most, and where they might encounter issues.

2. Customer Segmentation

Customer segmentation is about grouping customers with similar characteristics within the banking customer journey .

This approach helps banks tailor their services and marketing strategies to specific customer needs. Segmentation can be based on demographics, such as age, gender, or income, or behavioral factors, such as account usage, transaction frequency, or digital banking preferences.

In the retail banking customer journey , segmentation allows banks to identify which customer groups require more personalized services and which are most likely to adopt new offerings. 

By understanding each segment’s unique needs, banks can create targeted campaigns, design relevant products, and deliver a more satisfying customer experience. 

3. Touchpoint Identification

Touchpoint identification is fundamental in creating a retail banking customer journey map . It involves listing all the places customers interact with the bank in person and online. 

By mapping these touchpoints, banks can better understand customer journeys in banking and where they need to focus improvement efforts.

Physical Touchpoints

Physical touchpoints in a retail banking customer journey map include:

• Branches: The traditional face-to-face point of contact for customers, where they open accounts, apply for loans and seek customer service.
• ATMs / CDMs: Automated Teller Machines (ATMs) and Cash Deposit Machines (CDMs) allow customers to withdraw cash, deposit money, and perform other basic transactions without visiting a branch.
• Call Centers: These centers handle customer inquiries and provide support via phone.

Digital Touchpoints

Digital touchpoints in customer journeys in banking consist of:

• Websites: Banks’ websites are essential for providing information, online banking services, and customer support.
• Mobile Apps: Many customers use banking apps for convenience, to conduct transactions, and to track their accounts on the go.
• Social Media: Platforms like Facebook and Twitter serve as customer service and marketing communication channels.
• Online Chat: Live chat or chatbots offer real-time assistance to customers seeking help online.

4. Mapping the Customer Journey

Mapping the customer journey involves visualizing the steps customers take when interacting with a bank . This process helps banks understand the full scope of customer experiences and identify areas for improvement.

A retail banking customer journey map typically includes the following stages:

• Initial Contact: This could be through digital platforms like websites, mobile apps, or physical touchpoints like branches or ATMs.
• Account Opening: The process a customer goes through to create a new account, including online forms and in-person paperwork.
• Transactions: This covers routine activities like deposits, withdrawals, transfers, and payments.
• Customer Service: Moments when customers seek help or information, whether via call centers, online chat, or branch visits.
• Account Closure: The final step when a customer closes their account.

5. Analyzing Customer Pain Points

Analyzing customer pain points is critical to improving the bank customer journey map . These are moments where customers encounter frustration, confusion, or inconvenience. 

For example, complex online banking processes, long wait times at branches, or unresponsive customer service can create significant pain points.

Banks can gather customer feedback through surveys and analyze data from digital banking solutions to identify these areas. This helps highlight common issues customers face.

Once identified, banks can implement changes to reduce conflict and improve the overall experience. A focus on resolving pain points is essential for creating an aligned retail banking customer journey map.

6. Moments of Truth

Moments of truth are critical interactions within a customer journey that significantly influence a customer’s perception of a brand . In banking, these can occur when a customer opens a new account, contacts customer service, or uses digital banking solutions for transactions.

A bank customer journey map example could include moments when customers need immediate support, such as when they experience technical issues with mobile banking or need assistance with a transaction. 

Identifying these moments of truth allows banks to ensure these critical touchpoints deliver a positive experience. 

When done right, these moments build trust and encourage customer loyalty, benefiting the bank’s reputation and customer retention.

7. Opportunities for Engagement

In a retail banking customer journey map , opportunities for engagement are the touchpoints where banks can actively interact with customers to build stronger relationships. These moments offer a chance to create a positive impression and add value to the customer experience . 

For example, we engage with customers through personalized email campaigns, offer financial advice via digital platforms, or organize community events at branches.

Opportunities for engagement can also be found in digital banking, where banks can use in-app notifications or chatbots to keep customers informed and engaged. 

8. Iterative Improvement

Iterative improvement is continuously refining the retail banking customer journey map . It involves regularly assessing the customer journey, gathering feedback, and making necessary adjustments to improve the overall experience. 

This process ensures that the customer’s journey evolves with changing customer needs and industry trends.

Banks can use various data collection methods, like customer surveys and analytics from digital banking solutions, to understand where improvements are needed. 

Through this iterative approach, banks can address pain points, improve touchpoints, and ensure that the customer journey is smooth and customer-friendly.

Examples Of Customer Journey Mapping in Banking

Customer journey mapping in banking provides insights into customer experiences across various touchpoints. By visualizing these interactions, banks can identify pain points, understand customer behaviors, and create tailored solutions. 

Let’s explore cases where customer journey mapping transformed banking experiences , leading to notable improvements in service quality and customer loyalty.

1. Banque Saudi Fransi’s Digital Transformation with Wavetec

Banque Saudi Fransi (BSF), a major Saudi Arabian bank, collaborated with Wavetec to improve its digital footprint and customer experience. 

By implementing Wavetec’s enterprise queuing solutions , BSF transformed over 100 branches across the Kingdom, reforming the banking customer journey and reducing wait times.

The solutions included mobile, virtual, linear, and WhatsApp Queuing. 

These measures helped BSF improve service efficiency and customer satisfaction, but strategic planning and staff training addressed challenges like ensuring system integration and user adoption. 

This case highlights how digital banking solutions can improve the bank customer journey map, driving customer satisfaction and operational efficiency.

2. HSBC Mexico Transforms Customer Experience with Wavetec’s Queue Management Solution

HSBC Mexico , part of the global financial network, collaborated with Wavetec to improve its retail banking customer journey . 

The bank faced challenges managing a large customer base and reducing wait times in its 948 branches across Mexico. 

Wavetec’s advanced queue management solutions provided a tailored approach to align the bank customer journey, reducing bottlenecks and improving service quality.

The implemented solution included self-service kiosks , real-time data analytics, and personalized ticketing, allowing customers to use their bank cards for priority service. 

This led to reduced wait times, greater customer satisfaction, and centralized control of HSBC’s management. Wavetec’s configurable solutions addressed the main challenge of ensuring easy integration across the branch network.

Benefits Of Customer Journey Mapping in Banking

Creating a retail banking customer journey map helps banks understand how customers interact with their services across various channels. This deeper insight reveals critical touchpoints and identifies where improvements are needed, improving customer satisfaction and loyalty.

The upcoming text will explore the key benefits of journey mapping in banking . Understanding these benefits can help banks deliver better customer experiences and stay competitive in a rapidly evolving industry.

1. Enhancing Customer Experience

A retail banking customer journey map offers insights into customer interactions and pain points. By addressing these pain points and improving touchpoints, banks can create a smoother experience. 

This includes reducing branch wait times, enhancing digital banking solutions, and ensuring consistent customer service. 

Streamlining processes helps reduce confusion, leading to increased customer satisfaction and loyalty. With a well-designed bank customer journey map example , banks can identify areas for improvement and make changes that result in happier customers.

2. Product and Service Development

Mapping the customer journey in banking allows institutions to see which products and services resonate most with customers. This information can guide the development of new offerings that meet emerging needs . 

Banks can also use this insight to adapt existing products, ensuring they align with customer expectations. This iterative product and service development approach helps banks stay relevant and competitive, encouraging greater customer loyalty.

3. Marketing and Communication Strategies

Understanding the retail banking customer journey map is critical for effective marketing and communication strategies. It helps banks target customers at crucial stages of their journey, ensuring that promotional efforts reach the right audience. 

Additionally, it allows banks to craft messages and campaigns that resonate with customer insights . This targeted approach can increase customer engagement and boost the effectiveness of marketing efforts. 

By aligning communications with customer experiences, banks can create a stronger connection with their clientele.

Final Words

A well-crafted retail banking customer journey map is a valuable tool for banks aiming to improve customer satisfaction and operational efficiency. 

When focusing on touchpoints, addressing customer pain points, and exploring opportunities for engagement, banks can create a smoother, more intuitive experience for their clients. 

This iterative process also helps identify areas for product innovation and refine marketing strategies .

Banks can enhance service quality by adopting a customer-centric approach, increasing customer loyalty and retention. 

As customer expectations evolve, banks that use journey mapping effectively are better positioned to meet and exceed those expectations , ensuring long-term success and a competitive edge in the market.

How to Improve Customer…

Common ATM Problems and…

Retail Banking: Challenges &…

Banking Modernization & Technology:…

Retail Banking Digital Transformation:…

How to Streamline Banking…

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Why real-time customer journey curation is the future of banking

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How can banks’ digital agendas reframe their visions of tomorrow?

Traditional banks must rethink how their digital agendas work for customers today and tomorrow.

B anks today are in a perpetual race to address current and future customer needs using yesterday’s technology. Changing customer behaviors mean banks need to continually curate unique journeys and propositions to meet evolving customer expectations. Knowing they need to offer more contextual and personalized services is one thing – delivering a superior digitized customer experience is another.

COVID-19 has accelerated banks’ digital agendas. The EY Future Consumer Index indicates that because of lockdowns and stay-at-home orders, the switch to digital banking may become permanent for some customers, with almost 40% of respondents expecting to bank online more over the next 24 months.

As a result, banks need to rethink their digital transformation journeys to capture new growth opportunities and unlock greater value for customers now and beyond.

One Tier 1 global bank recognized that, to do this successfully, it needed to collaborate with a trusted partner who could address evolving customer needs and turn them into viable opportunities for the bank. Moreover, the right partner needed to deliver the bank’s vision of how it could become a future-ready, digital bank using sophisticated technology and banking architecture that would differentiate it from its competitors.

Our team set to work with the bank’s senior leadership to challenge the obvious and reimagine how a future-ready bank could transform the end-to-end customer journey. Together with the leadership team, we collaborated to build a vision of what their future-ready technology would look like.

The bank needed a platform that could solve the customer problems of today but could quickly reconfigure technology to address emerging customer needs of tomorrow.

Jan Muralitharan

Partner, EY Technology Consulting

We soon realized that what was needed was a shift from a traditional product-centric and project-centric approach to a proposition-centric approach that would deliver tailored, intelligent customer experiences, underpinned by a future-ready technology architecture and design. To ensure maximum flexibility, this would require an enduring, long-term capability to enable the design and engineering of real-time solutions to individual customer needs – and the flexibility to adapt and evolve as those needs change over time.

To deliver such a radically new way of offering banking services would require a fundamental change to the bank’s existing technology and architecture.

We embarked on a journey to create a world where the bank could provide more customer-centric propositions, delivered in real-time, using rich, data-driven insights, underpinned by sophisticated technology and architecture.

The better the answer

A scalable, real-time, event driven digital banking platform

EY Nexus for Banking provides real-time, digital customer engagement using context and data to generate intelligent and actional insights.

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Open banking services

Our open banking professionals can help your business maintain a trusted and secure open banking ecosystem while managing its risks. Learn more.

At its core, EY Nexus for Banking is a cloud-native, highly resilient platform comprising modular architectural building blocks. These building blocks work in harmony to absorb transactional data from banks, or third parties through open banking, to provide contextual and tailored insights. Using advanced machine learning models, it generates real-time, tailored insights and integrates domain-specific data services into banks’ channels in real-time, within context.

A modular approach to generating in-the-moment insights

The Nexus platform’s flexibility allowed us to employ enriched contextual and transaction data in response to streaming events, developing actionable insights for the right customers in the right channels, and at the right time.

Crucially, these customer journeys weren’t just hypothetical, but were based on a clear understanding of customers’ recent financial interactions and histories. The underpinning platform collated fit-for-purpose data from various sources, including real-time event streams, to address each customer’s unique set of needs, based on marketing preferences and consent.

This enduring, sustainable capability to identify priority customer journeys marked a defining moment for the bank and a direct departure from building campaigns around specific banking products.

Now, customers are nudged along their preferred banking journey via a highly sophisticated set of enabling components (i.e. building blocks) that are assembled to drive a unique approach for every customer. This customer-centric flexibility means the platform propels business prioritized journeys for today (e.g., home loans or cards) while supporting emerging use cases for tomorrow (e.g., fraud analytics or deposits) – among many other adaptive, personalized solutions.

Real-time is a term that everybody talks about but unless it includes the right time, place, channel, context and customer solution, it won’t work. All of those elements have to work in harmony for it succeed.

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A working digital world

The deployment of the Nexus for Banking platform involved the amalgamation of EY teams from three different countries, multiple time zones, and everyone working in an “all remote” world.

COVID-19 completely changed the aspiration for any co-location (agile ways of working) and forced the team to work in an entirely new way. Instead of working as co-located teams, the team ended up working across more than 250 locations (i.e. home offices). In effect, as well as developing flexible, adaptable solutions for the bank’s customers, the team has had to develop similarly flexible solutions for how they worked together and collaborated with various distributed teams, working remotely from their home offices.

In practical terms, the teams were organized into ‘chapters and squads’ with every squad comprising 8-10 cross functional practitioners, working towards a common goal. The squads are self-steering, autonomous teams with clear responsibilities for their respective product backlogs. The chapters are groups of functional specialists working across squads, to determine how jobs should be done (e.g. product and platform, architecture and design, build and deploy, validate and test, operate and run).

The team also embraced DevSecOps in practice, which underpins engineering capabilities with a clear focus on velocity, process efficiency and shift-left testing. This increased collaboration across cross-functional teams, and use of automation within DevSecOps pipelines.

Working together with the bank as one cohesive team to an enduring model means that everyone is focused on delivering the components of a future-ready bank, at scale.

The better the world works

A future-ready digital bank fit for the age of personalization

EY teams have helped the bank reimagine how it can best serve ever-evolving real-time customer needs.

EY’s Nexus for Banking now forms the backbone of a service that continuously adapts and evolves. The platform helps the bank to deliver highly advanced, digitally native propositions using enabling components as building blocks that are reusable across the enterprise. It has enabled the bank to progressively employ more sophisticated, progressive architecture across its entire technology footprint, embracing advancements in technology and engineering to deliver cloud-native applications.

This is a real differentiator for the bank – a step-change from its legacy technologies and a project-based delivery model that could only offer finite value. The platform will continue to progressively deliver future-ready technology capabilities, enabling the client to become a digital bank of the future.

The brilliant thing about Nexus for Banking is that it's a platform, not a single solution. It’s not a piece of software with specific business functionality.

EY Americas Technology Consulting Leader

By delivering the right insight, to the right customer, in the right channels, the bank will succeed in not only offering a greater experience, but one that could result in a more robust financial ecosystem around each customer throughout each stage of their lives.

This is something that almost every bank is increasingly realizing is going to be essential in a world that even before the arrival of COVID-19 was already seeing banking becoming more digital, and less in-person. With the right technological backbone, the right approach to data, and a continual focus on identifying and serving customer needs with real-time solutions, banks will be able to both adapt to future shocks and provide the more personalized services that are the basis of lasting relationships.

The starting point is to think differently about how banks deliver. EY Nexus for Banking can enable the rest.

Download the complete report, Why real-time customer journey curation is the future of banking

Transforming financial services

EY Nexus is a business transformation platform that accelerates innovation and powers frictionless customer experiences.

David Deane

Digital leader, visionary and enthusiast. Helping the largest companies in the world to successfully embrace the Digital age. Avid runner and golfer. Father.

Kathleen Calabro

Passionate and experienced product manager. Drawn by the seemingly endless power of platform ideology, and the unimagined value creation of today's digital ecosystems.

Ryan Battles

Consulting Banking & Capital Markets Technology Delivery Leader. Based in Boston. Enjoy watching sports and spending time with my family.

Focused on driving technology transformation, innovation and strategy. Husband. Father. Volunteer. Golfer. Hockey fan. Supports diversity and inclusion.

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The importance of customer journeys in banking

Customer journeys in banking are a bit like a romance, from the initial meeting when you’re trying to figure out if the bank and its products and channels are right for you, to the building of the relationship where of you learn more about each other, and finally to the engagement and marriage of what will hopefully be a happy, productive and successful long-term relationship.

While they may not have always been on the customer journey bandwagon, changing consumer preferences and competing disruptors have forced banks to pay attention to the journey their customers take as they decide whether to engage - or not - with banks and their products and services.

Olalla: Given the depth of banking choices consumers have today,...knowing the customer’s process from start to finish is hugely important.

“A journey is like a reputation - whether it’s defined or not, there is one,” says BBVA Compass Head of Business Development Pepe Olalla . “Given the depth of banking choices consumers have today, particularly among more commoditized services like checking, savings and even some types of loans, knowing the customer’s process from start to finish is hugely important.”

According to the Customer Journey Mapping Research Report 2018 from MyCustomer and Quadient, the biggest benefit of using customer journey mapping draws back to customer experience, with 71 percent indicating that using it increased customer satisfaction. Customers can choose to conduct their banking across many financial institutions and fintechs, which means having the best and most seamless customer experience in every channel and for every product could be the difference between gaining and losing a customer.

Further, Olalla says, it’s not enough to just map a few different journeys the customer takes with your bank. Instead, banks must identify every journey and seek to improve and maximize them .

“BBVA Compass’ goal is to map customer journeys for every product, channel, combination of channels and for every product through every channel and then constantly improve them,” he said. “This is important because customers might start in digital then move to the branch, then back to digital. Admittedly, it can get overwhelming, but in many cases, you only have one chance to get the customer experience right, so it’s worth it.”

That customers have both digital and traditional options is also one advantage bank’s have over digital only providers, he said.

Ollala: ...we’ve seen the importance of branches when it comes to digital product adoption and, beyond that, we know that consumers aren’t using just one channel...

“The omnichannel experience is one that is hard for a digital only provider to replicate,” he said. “Through some of our own research, we’ve seen the importance of branches when it comes to digital product adoption and, beyond that, we know that consumers aren’t using just one channel. Knowing their journey through each of these channels, and making their experience seamless from channel to channel, can help ensure you retain them.”

Olalla says that, using data and analytics, banks can better serve customers according to their needs, serving up products and services that match how they are using the bank.

“ The future of banking is how we use the data to better serve our customers and their needs,” he said. “But before we can do that, we have to make sure their experience with the bank, in every channel, is seamless.”

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• Omnichannel
• Customer experience
• Bank services

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Navigating a Customer Journey Map in Banking: Identifying Pain Points and Opportunities

The banking sector, in its tireless search for operational excellence and customer satisfaction, is facing a formidable challenge: unraveling the complex paths of the Customer Journey Map in Banking. This journey, filled with ever-evolving expectations and needs, demands meticulous attention to the pain points that can divert or even stop the flow of a positive customer experience.

Customer journey mapping is not just a theoretical exercise, but a strategic initiative that can illuminate the path to a stronger and more committed relationship with the customer. By identifying and transforming pain points into pleasure points, banks can not only improve the customer experience, but also secure their position in an increasingly competitive and phygital   market.

The Customer Journey Map in Banking: Key Tool for growth

Before diving into the turbulent waters of customer experience, it is essential to have a compass: the customer journey map. This critical tool allows financial institutions to visualize every step a customer takes in their interaction with the bank, from opening an account to resolving a dispute. By mapping these processes, banks can identify not only where obstacles are located, but also how and when they occur, allowing for a precise and adjusted response.

Identifying Predominant Pain Points

• Disjointed Experiences: Despite digital convergence, customers often encounter barriers when moving from one channel to another, resulting in a fragmented experience that diminishes perceptions of efficiency and customer service.
• Archaic Authentication Processes: Identity verification is vital, but outdated or redundant methods can frustrate users, encouraging them to search for more agile alternatives .
• Reactive Customer Service: In a world where anticipation is synonymous with care, banking often falls behind, reacting to problems instead of preventing them with proactive and personalized service.

Exploiting Opportunities: From Pain Points to Pleasure Points

• Articulated Experiences and Fluid Interconnection: Adopting platforms and solutions that ensure a seamless transition between channels , banks can increase customer convenience and satisfaction, while strengthening customer loyalty.
• Modern and Secure Authentication: By implementing biometric and behavioral authentication technologies, banks can offer security without sacrificing ease of use.
• Proactive Service: Through predictive analytics and personalization, banks can anticipate customer needs and offer solutions before the user is aware of the problem.

Going deeper into the Transformation of the Customer Journey in Banking

Detailed customer journey mapping is just the beginning; The real magic happens when banks embark on the journey of transforming these maps into frictionless, memorable experiences. This analysis focuses on how banks can turn challenges into strategic wins.

From Frustration to Ease: Simplifying Interaction

Customer-Centric User Interface: Banks must invest in designing interfaces that are not only aesthetically pleasing, but, more importantly, intuitive and easy to navigate. A user-centric interface minimizes confusion and maximizes efficiency, leading to an increase in customer satisfaction and retention.

Optimization of Processes and Response Times: The digitization of processes must go beyond the migration of paper forms to screens. Banks must rethink and optimize every process to ensure quick responses and timely resolutions to customer queries and issues.

Building Bridges in Omnichannel

Channel and Data Integration: True omnichannel requires banks to break down information silos. Integrating data across channels enables a unified view of the customer, enabling more consistent and personalized interactions.

Consistency in Communication: Constant and consistent communication at all touch points reinforces the brand and customer trust. Every interaction should reflect the bank’s values ​​and message, regardless of the channel.

Safety and Accessibility: The Dynamic Duo

Balance between Security and User Experience: Banks must find the balance point where information security does not compromise the user experience. Implementing advanced authentication systems that are robust yet discreet may be the key.

Transparency in Security Practices: Informing customers about how their data is protected not only increases transparency but also trust. A clear and effectively communicated security policy can be a competitive differentiator.

Transforming Theory into Action: Case Studies and Strategies in the Banking Customer Journey

With customer journey mapping outlined, it is critical to examine how banks can apply these maps to orchestrate meaningful and positive changes to the customer experience. Through concrete case studies, we can illustrate how theory translates into successful banking practices.

Success Stories: Innovation in Practice

Banks that have Redefined Welcome: Some financial institutions have managed to transform the onboarding experience of new customers by drastically reducing the time it takes to open an account, thanks to the implementation of digital verification and the use of e-signatures . This change not only improves efficiency but also drives customer satisfaction from the first contact.

Omnichannel Made Real: There are examples of banks that, by integrating their customer service services into a omnichannel platform , have provided a seamless experience, allowing customers to resume a conversation at any touchpoint, whether online, through a mobile device, or in person, without having to repeat information.

Personalization in Action: Some banking entities have made progress in the use of data analytics to personalize offers and communications. By analyzing customer behavior and preferences, they have been able to offer tailored products and services that meet individual needs and encourage greater loyalty.

Example of Customer Journey Map in Banking: Savings Account Opening

Designing a complete and detailed customer journey map can be an extensive process, but here is a simplified example of what a customer experience map might look like for a typical banking process, such as opening a savings account. This map is a general framework that can be deepened and expanded according to the bank’s specific needs and customer feedback. The key is to constantly iterate, using real data and feedback to refine each stage of the customer journey.

Conclusion: The Banking of the Future Forged on the Paths of the Present

The customer journey in banking is a microcosm of the human experience, reflecting the complexities and aspirations of customers who seek simplicity, security and recognition in their financial interactions. Banks that commit to understanding and improving this journey are investing in the most valuable capital of the modern era: customer trust and loyalty.

By systematically identifying and addressing pain points in the customer journey, banks not only elevate their service; They create financial ecosystems where clients feel understood and valued. Implementing strategies focused on personalization, omnichannel, and technological innovation is not only a response to a market imperative, but also a commitment to growth and adaptability.

The conclusion is clear: long-term success in banking is built on exceptional customer experiences, meticulously designed through mapping and reinventing the customer journey. It is a continuous process of evolution, where every feedback and every interaction is an opportunity to learn and improve. Those banks that remain diligent, dynamic and determined in this endeavor will not only prosper, but will also become beacons of innovation and role models in the financial industry.

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Customer journey mapping in banking: what it is and how to get started

Like many other sectors, the world of banking is facing persistent pressure to innovate within a society undergoing rapid technological, environmental and social change. Due to these changes, the way we engage with banks and access money isn't the same as it was five years ago. Short: the customer journey in banking has changed – and it's highly likely it won't be the same five years from now into the future. 

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To meet these changing environmental pressures banks are required to maintain a tight understanding of customer experience that will inform service innovations, while simultaneously creating more cost effective, efficient ways of working and profitable business strategies.

By implementing service design approaches and tools, such as journey mapping and personas, banks are able to adapt swiftly to changes in their customers' experience. Through an in-depth understanding of their customers, banks are able to provide services that address real needs, adapt to novel circumstances in which people are using money, and develop increasingly personalized interactions throughout their service delivery that maintain high levels of confidence and trust.

In this article we will discuss:

• Customer journey mapping in the context of banking
• Questions to solve in banking
• Customer journey maps for digital banking
• How to create a journey map for banking
• Example journey map: banking experience
• Typical challenges of introducing journey mapping to banking

What is customer journey mapping in banking?

As with many other industries, customer experience in banking or financial services is increasingly becoming a driving force that determines whether service providers succeed or fail. Because of this, how service providers are able to refine their service offerings to accurately meet customer needs are greatly affecting their ability to attract and retain valued customers.

As people's lives change, so too do their needs for how they store, save and access their financial resources. Some of the driving forces affecting the customer experience in the banking industry are:

• Inconsistent loyalty from customers
• Increasingly technology-driven generations of customers
• Evolving demands for personalized banking experiences
• Shifting perceptions around data security and transparency  

By utilizing customer-centered or service design approaches, banks are able to give themselves a competitive edge with these evolving trends and ensure their services stay relevant and needed into the future.  

In this article we will explore some instances where journey mapping can assist in the development and innovation of banking services, then we will conclude with a short example of how journey mapping can assist in the personal journey of someone taking out a home loan.

How to improve the customer journey in banking?

Customer journey maps allow us to address a number of important questions in relation to our service delivery, from customer understanding, identifying pain points and anticipating future service innovations. There are some questions you should ask yourself when you're designing customer experience in banking.

Who are our customers?

Central to delivering great customer centered services is having a deep understanding of who our customers are, what they are trying to achieve and what customer experiences they expect while they engage with banking services.

Banking institutions offer services which play a central role in many of our lives. Because of the sheer number of people that engage with banks, there also exists a diverse range of different attitudes, values, and expectations when it comes to receiving financial services.

So how do we develop an understanding that enables us to customize and deliver personalized banking experiences that both retain and attract customers? We develop personas that are grounded in people's actual experiences in the banking context, reduce assumptions about our customer’s behavior, and accurately reflect the types of people we are attempting to help.

• How traditional are our customers?
• How much human interaction do they require in their banking experience?
• What do their lifestyles look like?
• What channels are best to connect with them?
• How comfortable are they embracing new technologies?
• What digital devices are they using?

On one hand, we might have a young customer who is completely willing to enable NFC (read: wireless payments) on their mobile device and start using it for daily payments, on the other hand, we might have a customer who is entirely risk-averse with these forms of technological innovation and unable to comprehend where to start if they had to use their phone to pay for things. Being able to develop different customer personas that represent our users and leveraging them to develop meaningful insights allows us to tailor our service delivery in ways that are more personalized, trustworthy and likely to satisfy their needs.

How is the customer journey in banking changing?

Digital transformation is affecting all industries and banking is not excluded. In recent years we have seen fintech providers embracing technology in ways that provide novel and innovative customer experiences that confront traditional modes of banking.

Digital banking and changing customer experiences go hand in hand. Neobanks (digital-only banks) such as Revolut, N26, and Monzo are all offering banking solutions that are driven by technology and customer experience.

These digital disruptors are providing banking services for a new generation of customers that values polished UX, accessible ways to manage their money and increasingly personalized experiences.

Neobanks are considering the journey of the customer and how they interact with banking services. By providing seamless interfaces they are enabling their users to quickly manipulate money the way they need to - in real time, through this clever use of available technology they are able to provide convenient and enjoyable solutions to user needs.

Take for example a large group of 10 people who have just had a meal together at a restaurant. When It comes to payment it may be time consuming and difficult for a restaurant to split the bill with such a high number of patrons. The burden then falls on the customer to organise and arrange how money will flow to the appropriate person when the bill is paid.

Innovative companies such as Tikkie in the Netherlands are facilitating payments through quick and easy Whatsapp payments that people can access and share with large groups. Meaning that one person can cover the bill and receive payments from other members of the group in a fast and simple manner by simply sharing a payment link. Innovations such as this are changing the landscape of possibility within personal finances.

Whether or not digital-only banks are considered as a threat to traditional banks, the innovations they provide are enough to draw significant numbers of new and existing customers by shifting peoples expectations of how banking services can be delivered.

Traditional banks, as well as neobanks benefit from putting an emphasis on their customer's journey so that they are able to adapt and innovate their service delivery to accurately meet people's needs.

Through the process of researching and creating customer journey maps , banks are able to reduce assumptions and answer a number of important questions, such as:

• Where and how are people engaging with financial services?
• How do customers discover and form a relationship with a financial institution?
• In what ways are people restricted by traditional methods of banking?
• What levels and types of customer support do people require?  

How are customer needs and expectations driving innovation in banking services?

As digital disruptors are shifting viewpoints about what services banks are able to offer, as well as how they are offered, traditional banks are required to match customer expectations and provide attractive solutions that are able to retain existing and attract new customers.

New digital financial technologies such as the Software-as-a-Service banking engine, Mambu – are enabling great changes in the banking sector by allowing innovative companies to provide users with customized, flexible and simplified platforms for accessing their money.

To provide these innovations at speed financial service providers must keep a close eye on their user needs and how they can support them better, whether this is through what types of services are provided - or the interfaces through which users access those services.

A successful combination of the two can alter the perception of how banking feels as well as the possibilities it creates within different journeys, leading to better outcomes for customers as well as the banks people are engaged with.

For example, the neobank N26 created a partnership with TransferWise that allows their users to make effortless financial transfers to over 30 different currencies. Using their app, customers of N26 are able to make international transfers, as they would to someone within their own country - in the process simplifying and reducing the cost for users. As the world becomes more connected and people are engaged in work that crosses geographical borders, the need to make international financial transfers increases, and these types of features become more appreciated.

Another innovative example is peer-to-peer lending options being offered which streamline borrowing and simplicity of people to access personal loans. Platforms such as Lendingclub and Upstart are able to offer services that connect borrowers and lenders, bypassing the complex and costly loan processes offered by traditional banks. By understanding that for many customers' the process of setting up a small-scale loan was complicated and cost-prohibitive, new services were developed that allow for low-interest P2P lending and more simplified procedures for setting up small loans.

These types of innovations are changing the way people experience and interact with their finances and are setting expectations for the future.

As many people have adapted to the convenience of using smartphones and digital platforms for accessing banking services, the necessity of physical banking locations decreases. By providing simplified UX experiences, smart features such as AI-driven analytics and support, and novel services, disruptors in digital banking are able to support people's desired lifestyles and draw in new customers.  

Questions that journey mapping in banking can answer for innovation include:

• What outcomes are our customers trying to achieve with banking?
• What experiences and situations are pain points for a customer in their banking journey?
• How can emerging technology meet the needs of customers?
• What innovative ways could help customers access their finances?

By understanding the journeys banking customers are on and how they like to move and access money, innovations such as this are easier to anticipate and develop.

Why are some people still not using banks?

"Globally, about 1.7 billion adults remain unbanked—without an account at a financial institution or through a mobile money provider." ( Worldbank 2017 )

Of course, the world has changed a lot since 2017, however, the fact remains that a large number of people exist in the world without a bank account represents a large market for banks that can be explored. The majority of these people live in developing countries or locations where banking is simply impossible, or affordable. However, the constraints experienced by these countries and "unbanked" markets are driving innovations in banking technology.

By looking at the experience of users not engaged in banking and mapping their journey we clarify opportunities for how services can be delivered that meet their needs. Digital disruption is also affecting these markets. For example, mobile banking has made the process of engaging with digital banking services fast, affordable and has practically eliminated the need for physical banking locations - in the process service providers have been able to open up these once inaccessible markets.

Taking a look at the life and experience of people who are currently not engaged in banking and mapping their journey we are able to look at the challenge with new eyes. By putting these maps to work banking service providers are able to answer the following questions:

• What are the barriers that prevent people from using banks?
• What physical or digital constraints are people experiencing in the context of banking?
• Can people afford to engage in banking services? If not, why not?

How do we build trusted relationships with customers?

Existing banks have the privilege of long histories of building trust with their customers. This trust is an important currency in banking that maintains relationships and loyalty with customers. Even though incumbent banks may have the advantage of a history of service delivery, the pressures of developing and maintaining trust exist for them as much as it does for new banking organizations.  

So for personal banking, how does journey mapping play a role in helping to develop trust?

Being able to map out a customer's emotional journey as they engage with a service can help to identify moments where trust is compromised or service delivery isn't how they expected.

By building in smart features and touchpoints into the customer journey, personalized relationships can form that give customers more security and confidence that their money is in safe hands.

This disparity of trust between traditional and neobanks can be highlighted in a number of different areas, there are surveys that show people are hesitant to store large amounts of funds in digital banks, seeing them primarily for quick purchases and expenses. It has been shown that users also still value face-to-face interactions and the presence of physical banking locations and the security they represent - these features, along with good existing relationships give traditional banking institutions an advantage, especially during times of uncertainty.

However new banks continue to drive innovations that attempt to build trust in the digital age. Features such as push notifications for transactions are features that build trust with customers that they have intimate contact with financial activity on their accounts. By knowing when transactions are being made in real time users are able to quickly take action if they suspect suspicious activity or their cards are being inappropriately used.  

Other security features include the ability to quickly disable any active cards if any fraudulent activity or if a user suspects they have lost their bank cards. These kinds of features give a sense of ease and control to users and allow them to trust that their important financial assets are safe and secure.

Finally, verification techniques using security codes and authorized devices add extra layers of security for accessing and updating account information. Especially in the digital space, it is important for people to know that there are secure methods for verifying their identity before any changes can be made.

Questions that journey mapping can answer for building security and trust:

• What forms of verification are convenient yet still secure?
• With digital-only banking what levels of personalization in service delivery can replicate and simulate the security of incumbent banks?
• How can services be delivered in ways that build trust customers?
• What security features make users feel they are in control of their finances?

Customer journey maps for banking in the digital field

Until now we have only looked at experiences that customers have when communicating with their bank in person.

But digital banking is increasingly important – especially with a young and tech-savvy audience.

Customer journey maps can be of great help to digital banking. A prime example to look at could be an app. Especially for online banking, a journey map is a great way to prototype. Start out by doing some research. Ask your customers the following questions:

• What functionalities are essential, and which ones are nice-to-haves? (Wire transfer, access to equity funds and other investments, option to book an appointment with the bank advisor…)
• How to structure the app in a logical and practical way?
• How easy is it to transact banking businesses online? 
• How to best solve the need for two-factor authentication (another app?)
• What can we offer to customers who lost their ATM or credit card? Can they immediately and easily lock it through the app?

These questions support banks in creating a great user experience with their digital products, while also future-proofing their business offer. Journey mapping for digital banking helps to understand the core features of the product.

Start mapping out the process of potential use cases of the app, ideally in a journey map hierarchy. This will help you to understand the experience a customer will have when using a digital product for banking. If any issues occur, this is the quickest and cheapest way to find out.

How to create a customer journey map for banking?

A good journey map goes beyond the touchpoints a customer has with our organization and helps us to understand their lives in a more holistic way. In this section we will introduce an example for customer journey mapping in banking. We will look at a few applications of mapping a journey of buying a house and applying for a home loan.

Communication channels

As we discussed earlier in the article, the channels in which people are engaging with banks are changing. Historically the majority of communication for personal banking services has been done in person. Face-to-face interactions are still the gold standard for many people as the experience of talking with a real person inherently feels secure and engenders trust. But how do you recreate this kind of trust in a digital setting?

As technologies and preferences shift around how people want to interact with financial service providers so too do the channels service providers must adapt and use. This does not exclude face-to-face interactions, however it expands on the possibilities available. With a customer appetite for customized, personalized, digital experiences at the tap of a button, banks must be willing to understand and match these experience needs.

By understanding what channels customers prefer to communicate through when they are taking out a home loan, we will ensure they have the right information at the right time, and in the right format. Whether this is through face-to-face meetings, email, SMS, or embracing newer technologies such as AI-assisted chatbots or virtual meetings. In the end banks must drive for innovation while still developing and maintaining customer trust and a sense of security for people.  

Files, documents and in-depth information

File lanes can be helpful for holding all the different types of documents and information a journey will require. In the process of buying a house and taking out a loan there are a large variety of different forms and information that a customer must understand and complete.

A file lane allows us to centralize these documents so they can be attached to the relevant sections of a customer journey. From here we get a clear picture of when, where, and how a customer should receive information.

Dramatic arc and emotional journey

Buying a house and taking out a home loan can be a big step involving many new decisions and increased levels of responsibility for a lot of people. There can be pressures around deciding what interest rate to choose, choices on how to pay back the loan, and who to go to for trusted advice. Depending on the persona for the type of person we are working with, this can result in a range of different emotional experiences.

As well as tracking the emotional experiences of our users, it is also important to focus on the dramatic arc or the peaks and troughs of engagement for users as they navigate through their journeys. Perhaps our users are highly engaged when they are about to commit to a loan, because of an overwhelming amount of information they have to consider as well as the excitement of making a commitment, this experience can be both negative for the user while also having high dramatic value.

By understanding how our users' emotional journey intersects with the dramatic arc of their service experience, we are better able to identify aspects of our customers' experience where they need additional help and support. It leads us to ask important questions, such as how might we support their process by delivering the right amount of information, at the right time? How much communication gives our customers assurance that they are being thought about and cared for?

By addressing emotional elements such as this, and others along a customer's journey, we have the opportunity to make our service feel more safe, trustable, and enjoyable for people to receive.

Managing a range of different customer journeys in repositories

Customer journeys can be understood at a range of different levels. From the macro scale, right down to small micro-interactions. All play a role in the overall experience of a customer and if orchestrated well will contribute to seamless and delightful moments as someone receives our services.

Perhaps this means creating journeys where he spends a day moving between different channels of information, asking family members for advice, trawling through many different websites, and reading books on how to make his decision. At a fine-grain, this might even be how someone navigates information on our particular website, what his pain points are, and how easy it is to access the relevant information that is needed.

By linking these sub journeys together we are able to see both the higher-level picture and move into fine-grain detail on all elements throughout his experience - creating a detailed repository.

The more detail we are able to add to our journey map will determine how clear our vision for service delivery improvements will be. Adding extra lanes with data, visual artifacts and additional insights make our journey maps increasingly rich and usable.

Example customer journey map for the banking sector

Typical challenges of introducing customer journey mapping to banking

Challenging business as usual.

As is the case with many established industries, proposing new approaches to working can be met with resistance as they challenge long-held existing ways of working. This is the way we do things here has held up for a long time… however in the face of change, we can no longer afford to continue working as we did in the past. Digital transformation, disruptors and novel types of service delivery are all challenging perceptions of what is possible in the world of banking. Champions for service design approaches must be able to convey the value of working differently, and demonstrate how new approaches can harmonize and amplify existing ways of working, rather than simply replace them.  

Understanding the end-to-end customer journey  

Banking services can be highly complex and involve a multitude of different customer journeys. Everything from checking account balances, taking out loans, depositing and withdrawing money and making transfers to third parties, the list of actions and journeys in banking is vast.  

Developing quality journey maps requires a perception shift for banks to go beyond simple touchpoints to understand customers' end-to-end journey, which can be a big undertaking. However the benefits of this understanding are also noticeable. With this foundation service delivery can be innovated and developed in ways that provide the customer with a more cohesive, logical and enjoyable banking experience.  

Organizations can also encounter challenges utilizing journey maps to make sustainable changes due to the commitment and effort required to change existing systems, redevelop policies, while at the same time minimizing risk and maintaining trusted relationships.

Often change efforts initiate with a great sense of enthusiasm, only to be held back when faced with the complexity of implementation. To mitigate these challenges, efforts to understand and change existing systems must move at an appropriate pace that is manageable and not overwhelming. Pick small wins, communicate clearly and often, and don't expect to change the whole system all at once. Many small shifts to different journeys will lead to radically improved customer experiences over time.  

Going digital

There are great opportunities, as well as risks in going digital with banking services. As banks rely so heavily on trust and security, understanding the customer journey and making shifts can be a gradual process as not to compromise existing relationships. The challenges involved with going digital involve considering a range of different ways in which services can be used. For some banks offering digital services, this means a thorough understanding of the regulatory environment in which they exist in and how they will be able to manage and prevent their services from being used for illegal purposes, such as tax evasion.

Driving cross-departmental collaboration

Banks are well known for having siloed departments and established ways of working. When one hand doesn't know what the other is doing, there is a risk that the customer experience of our services can be fragmented and difficult to navigate, on top of this we can lose out on efficiency in delivering services, cutting into our bottom line. This is where new players in the banking market are really able to make an impact as they are often smaller and with the use of agile methods and service design approaches are able to quickly adapt and modify their service delivery to meet customer needs.

Existing banks are required to embrace these new customer-centric approaches and develop functioning cross-department teams to solve innovation and CX challenges.

Journey maps offer a great opportunity to create a central location for data management and foster collaboration between different departments. By adding data lanes and KPI data to journey maps we can create useful tools for improving the way we work together to deliver better services.  

There are many applications for how journey mapping can assist our understanding of customer experience and service delivery in banking.

By developing great persona's we are able to understand and communicate who our customers are - what their personalities are like and how they prefer to engage with banking services.

By mapping out the experiences of these different personas we are able to have insights into areas of service delivery that are open for disruption and innovation. Digital-only banks are already capitalizing on insights from this customer journey and developing innovative solutions to people's banking needs such as peer-to-peer lending, digital-only banking, and fast personal transactions.

Emerging technologies and innovative platforms are also changing people's experience and expectations of banking, though intuitive UX experiences, reduced cost services, and removing the need for physical banks organizations are able to increase the accessibility of banking services for whole new markets of people.

Sitting at the foundation of all this innovation lies an understanding of customer experience. As the world continues to evolve and change, organizations that use the best tools for mapping customer journey can manage, organize and extract insights from this experience. They will also have a competitive advantage for crafting better services and addressing their customers needs.

Now it's about implementing what you've just learned: Create banking journey maps to understand the customer experience and innovate your services.

The journey mapping tool Smaply lets you easily create banking journey maps, personas, and ecosystem maps.

Sign up now, it's free!

Cambrian Berry

Cambrian is a creative, passionate and self motivated service designer and loves seeing solutions to complex problems, especially when it comes to help people towards experiences that improve the quality of their lives.

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Retail cracked the CX code. What can banks learn?

In retail, omnichannel experiences are so common that they’ve become a customer expectation.

The retail industry has excelled where most others haven’t: at figuring out new tools and strategies to improve the customer experience (CX).

We see the results every day. The list includes personalized product recommendations, seamless physical and digital shopping, and instant customer support. The overall experience is so smooth that it’s redefined customer expectations across every industry.

There’s a lot banks can learn from retail-style thinking. For years, many banks have looked to retail as a CX North Star (see Wells Fargo’s now-famous “stores” ). The trick to mapping a retail mindset onto banking is understanding where retail succeeds and identifying practical analogs for banks.

Here, I’ll walk you through four key CX lessons from retail and share how banks can adapt that thinking to serve customers better.

Lesson #1: Go omnichannel

Omnichannel is all the rage these days. The term itself may feel like business jargon. But if “omnichannel” feels like jargon now, it’s because retail set a gold standard that other industries have chased for years.

Just think about retail’s “buy online, pick up in store” (BOPIS) model. It lets customers start a purchase in one channel and complete it in another. The experience is seamless: orders are often ready in a couple of hours, and there’s no wait upon pickup.

Most banks have the right components for an omnichannel strategy: physical branches, ATMs, a mobile app, etc. But the experience for each feels disjointed. True omnichannel gives customers the same helpful experience across every channel. It also supports org-wide data sharing to personalize every interaction consistently.

At a basic level, that might look like offering similar services in person and online (something many banks already do with check deposits).

A step further might involve BOPIS-like digital-to-physical handoffs. For instance, a customer may digitally request a cashier’s check before heading to the local branch. The check is ready for instant pickup when they arrive – no wait is needed.

In retail, omnichannel experiences are so common that they’ve become a customer expectation . That expectation applies to banking, too. By following retail’s lead, banks can give customers the convenience and personalization they want. And they can maintain customer loyalty over time.\

Lesson #2: Bring mobile into the branch

Great retailers use mobile to complement the in-store experience. But the best ones make mobile an in-store fixture.

Look at Target, for instance. You can build a shopping list in the Target app, see items in stock at your local store, and view their exact aisle location. You can scan barcodes in-store to apply app-exclusive coupons if you’re a rewards member.

Most banks need an analogous experience. Again, the problem is the separate branch and mobile data silos. And that’s a lost opportunity.

Consider, for instance, a new branch customer who wants to open a checking account. With an integrated mobile and branch experience, they could…

• Check-in on arrival via their bank app.
• Join a virtual queue for teller assistance with an estimated wait time.
• Explore educational content (say, about auto loans or Zelle scams) on a self-service tablet while they wait.
• Begin their checking account setup on mobile before finishing with a banker who can see all paperwork in progress.
• Take a financial “personality” quiz in their bank app that can match them with products they’ll love: maybe a brokerage account for an ambitious risk taker or a high-yield savings account for a cautious planner.

In one sense, this is a creative application of a retail-style omnichannel strategy. But more than that, it highlights the massive potential to deliver more value to customers through a blended mobile and branch experience.

Lesson #3: Embrace physical and digital partnerships

You’ve probably noticed the store-within-as-store trend over the years: a Starbucks cafe in your local grocery store, an Ulta stand in Target, or an Apple mini-store in Best Buy.

These retail partnerships are everywhere, and for good reason. More brands in one space means more foot traffic for both parties. Moreover, the “embedded” brand can make sales without the overhead of a standalone store.

There’s also a specific CX advantage. After all, customers love convenience. If customers know they want coffee and groceries, for example, they’ll go where they can buy both.

Banks can benefit from similar partnerships. It’s no secret that branches have declined for over a decade, although closures slowed last year. As branch usage evolves, retail-style partnerships can help banks increase foot traffic and lower costs in places where they still have a footprint.

What might that strategy look like? Consider…

• Branded ATMs or micro-branches in high-traffic businesses . Many banks already do this with grocery stores and airports. But there’s room to expand to other areas: large corporate offices, local athletic clubs, etc.
• Co-branded storefronts : CapitalOne Cafe (a partnership with Peet’s Coffee) is a great example. People might go in for some caffeine-fueled deep work and leave with a new savings account – something I did in my startup days.

There’s also room to flip the partnership model by embedding nonbank financial services in existing branches: a tax advisor to help small business owners, an insurance agent to support home or auto borrowers, etc.

But don’t just limit this collaboration to the physical world. The underlying logic is that customers have countless relationships with financial and non-financial institutions. Those relationships extend to the digital world as well. And banks can collaborate with this broader ecosystem to offer financial services wherever customers need them.

This work will require more data sharing between banks and partners, like going omnichannel. However, the end-user possibilities are enormous: consider account aggregation for consumers or embedded request-for-payment buttons for small businesses.

The bottom line? No matter the path, both digital and brick-and-mortar partnerships could dramatically transform the banking customer experience.

Lesson #4: Take customer care to social media

Call a major retailer, and you might be on hold for half an hour. But tag them on X (formerly known as Twitter), and you’ll get a response in seconds.

This social-media-heavy customer care model is intentional. The reality is that apps like X have massive reach. And if a customer shares a bad experience, their story could quickly go viral.

To keep negativity from spreading, retailers have embraced what I call “social care”: an approach that involves constant @mention and hashtag monitoring to catch brand-related feedback before it reaches a broader audience. Banks can benefit from a similar approach.

Wells Fargo has been an industry leader on this front. It has a dedicated social team that can quickly uncover customer complaints and respond with a request to chat. Moreover, the team can often resolve customer issues in that channel instead of transitioning to a phone call or email thread.

Banks do have to get creative with a social care strategy. Unlike retailers, for instance, they need robust customer authentication measures to mitigate fraud. But with the right digital tools and a proactive approach, banks can deliver faster and more satisfying customer support.

To refine banking CX, be adventurous

Rome wasn’t built in a day, nor was retail’s powerful CX model. Behind the scenes, retailers had to test, tweak and stumble before they found the right mix of solutions. The guiding principle throughout is to be adventurous because the competition surely will.

Banks will benefit from the same approach. With ambitious thinking and a go-getter mindset, they can usher in a new era of banking CX.

Young Pham is Chief Strategy Officer at CI&T .

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STC Bank launches in beta

stc pay has recently been given formal approval to move to the next phase of its transformation journey into STC Bank with this beta launch

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stc pay has recently been given formal approval from the Saudi Central Bank (SAMA) to move to the next phase of its transformation journey into STC Bank. This beta launch is limited to preselected customers and is a preparation for a full public launch later in the year.

This step is supported by SAMA. This affirms its commitment to playing a pivotal role in digital transformation and empowerment, contributing to the ambitious goals of Vision 2030 to transition towards a cashless society by increasing the share of digital financial transactions.

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Samart corp public co ltd, beta launch will allow customers to upgrade to a stc bank account.

This beta launch will enable selected users to upgrade their accounts from a stc pay digital wallet into an STC Bank account. Customers will be provided with an STC Bank International Bank Account Number (IBAN) and get additional banking services.

STC Bank aims to provide Sharia-compliant banking services and financial solutions whilst ensuring the utmost security and customer protection through the utilisation of cutting-edge financial technologies. STC Bank is hopeful it will be a significant addition to the Saudi banking sector by offering traditional banking services through a customer centric digital approach.

Founded in October 2018, stc pay became the first licenced fintech company by SAMA. Since then, it has become one of the region’s biggest digital wallet giving access to financial services to over 12 Million customers through its mobile first approach. The company recently obtained a SAMA licence for the transformation into a full-fledged digital bank.

This transformation aligns with the executive plan of the fintech strategy under the financial sector development program, aiming to establish the Kingdom as a global hub for financial technology and innovation in technology-based financial services, thereby enhancing financial and economic empowerment for individuals and communities.

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Court filings show tax agency wants Shopify to surrender customers' bank details, sales data

An affidavit lists 16 categories of information the CRA is seeking, from customer bank account information to birth dates and social insurance numbers

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OTTAWA – The Canada Revenue Agency and Shopify have been deadlocked in a year-long court battle as new court filings detail the broad scope of the data the tax agency wants to pry from the e-commerce company about its customers to check if they’ve paid all their taxes.

The new documents are the latest step in CRA’s ongoing battle with the e-commerce giant on behalf of itself and the Australian and French governments to obtain large troves of Shopify merchant information.

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An excerpt of a 2023 affidavit by CRA senior technical analyst Paul Kalil lists 16 categories of information the government is seeking on Shopify’s Canadian account owners, ranging from their bank account information and total transaction value each year to the owners’ birth dates and social insurance numbers.

Last year, the CRA filed two requests to the Federal Court asking that Shopify be compelled to hand over data. The first request, called an unnamed persons requirement (UPR), seeks extensive information such as the identity, transaction records and sales amounts of Canadian-resident merchants that used the e-commerce platform in the last six years.

The second UPR was filed on behalf of the Australian Taxation Office, which seeks data about all Shopify merchants with Australian billing addresses between April 1, 2021, and March 31, 2022.

Despite a UPR being a legal tool the CRA can use as long as its request meets certain criteria and is approved by a judge, Shopify’s COO last year accused the agency of trying to obtain information via a “backchannel” at the time and vowed to fight the “outrageous” requests.

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One year later, both UPRs are meandering very slowly through the Federal Court as both parties argue over what data Shopify can or can’t provide to the tax agency in a reasonable time.

Much of the non-financial information, if successfully obtained, will likely be used to match shop owners’ information with CRA files to then verify if those merchants declared all their business income to the government.

The UPR filed on behalf of the Australian government is less comprehensive and only seeks eight categories of information, such as a Shopify store’s legal name, contact information, email and postal addresses, as well as total revenue for sales to customers in Australia.

But in both cases, Shopify argues that it doesn’t keep much of the information requested.

“For almost all Store Owners, the information requested in the Canadian UPR is not available to Shopify in its tax ‘books and records’ or otherwise,” reads an affidavit by Shopify vice-president of product Mani Fazeli.

More specifically, the company says it doesn’t have all of the data in 13 of the 16 categories of information on Canadian merchants the CRA wants. It says that to extract all the information requested that it does have would be an extremely time-consuming and costly endeavour because it would involve manual review of “hundreds of thousands” of accounts with a Canadian address.

“Overall, it would be extremely burdensome and time-consuming for a Regulatory Analyst to conduct the manual review of documents and information necessary for Shopify to respond to the Canadian UPR,” Shopify regulatory analyst Anna Lee wrote in a recent affidavit.

It also says it doesn’t have three of the eight categories of information requested by the Australian government.

But the CRA has said it doesn’t believe the company.

In a recent filing asking the Federal Court to override Shopify’s objections against answering precise questions about a data-retrieval software it uses, called Mode, the agency’s lawyers questioned if the company couldn’t, or simply didn’t want to, provide the requested information in the UPR.

“Shopify says that it has limited information. The Mode questions test this position,” the agency wrote.

“Knowing what information Shopify was able to retrieve through its custom-built Mode reports would assist the Court in understanding the scope and types of information that Shopify collects, maintains, and provides in response to legal information requests, and whether this information is associated with an identifiable person or business.”

The court filings also reveal that CRA and Shopify officials had multiple email exchanges and at least one in-person meeting to discuss what information the company held on its clients before the agency filed its UPRs.

CRA did not provide a comment on the ongoing litigation by deadline Thursday. Shopify did not respond to emailed questions Thursday.

Last year, National Post reported that the agency’s requests to Shopify are part of a larger effort to fight tax non-compliance by taxpayers who make money operating a business on e-commerce websites.

Documents also showed that CRA’s auditors that focus on high-net-worth individuals and businesses had received requests from both France’s and Australia’s tax authorities for information on Shopify’s merchants. The documents said both countries’ governments were auditing unspecified Shopify merchants as well as the company itself.

Recent court filings show the Australian Taxation Office (ATO) had reached out to Shopify directly in late 2022 asking for data on its merchants with Australian addresses, but the company refused to provide any information without a valid court order or warrant. That’s what forced the ATO to turn to CRA to obtain the data via a UPR.

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rue21 files for bankruptcy for the third time, all stores to close

rue21 has filed for Chapter 11 bankruptcy and is closing all of its over 500 stores.

Reuters reported that the teen fashion retailer plans to close all of its 543 U.S. stores within the next two months while conducting large "going out of business" sales, according to court documents filed in U.S. Bankruptcy Court in Delaware. rue21 also plans to sell its intellectual property.

rue21 has not issued a press release or commented publicly on the bankruptcy as of Friday morning. The company's website appears to be down.

rue21 has filed for bankruptcy twice before

This is not the first time the retailer based in Warrendale, Pennsylvania has filed for bankruptcy, previously filing in 2003 and 2017, when it closed 400 stores and cut about $700 million in debt. Reuters reported that rue21 currently has approximately 4,900 employees and $194.4 million in debt.

The company was founded in 1970 as Pennsylvania Fashions Inc. and operated under various brand names until it filed for bankruptcy in 2002. It exited bankruptcy in 2003 and was renamed to rue21.

rue21 tried to sell its business but could not find a buyer willing to pay more than it would earn by liquidating its inventory and shutting down stores, Reuters reported. It has hired the financial consultant Gordon Brothers to help with store closing sales.

Other retailers file for bankruptcy

rue21 is the latest retailer to file for bankruptcy and close stores. In April, longtime mall retailer Express filed for Chapter 11 bankruptcy and is closing approximately 95 Express retail stores and all of the brand's UpWest stores. The fabric and crafts store Joann filed for bankruptcy in March, although its stores are not expected to close, and the U.K.-based The Body Shop announced in March its U.S. subsidiary was no longer operational and will be closing all stores.

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Pietroski joins team at Kennebec Savings Bank in Augusta

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Michael Pietroski Todd Wentworth photo

AUGUSTA — Kennebec Savings Bank President and CEO Andrew Silsby recently announced the addition of Michael Pietroski as the vice president and retail regional manager — central region. In his role, Pietroski oversees and leads the bank’s branches in Augusta, Waterville, Winthrop and Farmingdale, providing a dedicated, personalized customer service.

“We are delighted to have Michael on the Kennebec Savings Bank team. In the short time he has been with us, he has leveraged his industry knowledge to introduce fresh perspectives and innovative ideas that are enhancing the in-branch customer experience,” Aline Taylor, senior vice president and chief retail banking officer, said in a news release.

Prior to joining the bank, he most recently served as vice president, business banking center manager at a Maine-based community bank. Pietroski holds a degree in business administration from Husson University.

“I am delighted to be a part of Kennebec Savings Bank in this dynamic position. I feel privileged to be part of a team that is so committed to delivering such exceptional financial services to our customers,” Pietroski said in the release.

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Rewriting the rules in retail banking

Retail banks have long competed on distribution, realizing economies of scale through network effects and investments in brand and infrastructure. But even those scale economies had limits above a certain size. As a result, in most retail-banking markets, a few large institutions, operating at similar efficiency ratios, dominate market share. Changes to the retail-banking business model have mostly come in response to regulatory shifts, as opposed to a purposeful reimagining of what the winning bank of the future will look like.

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Retail banks have also not kept pace with the improvements in customer experience seen in other consumer industries. Few banks stand out for innovation in customer interaction models or branch formats. Marketing investments have traditionally focused on brand building and increasing loyalty: a reputable brand stood for trust and security and became a moat, providing protection against new entrants to the sector.

Today, the moats that banks have built are more likely to restrict their own progress than protect them from attackers. Four shifts are reshaping the global retail-banking landscape to the point where banks need to fundamentally rethink what it takes to compete and win. This should be an urgent priority for banks. The pace of change will likely accelerate, with a select set of large-scale winners emerging in the next three to five years that will gain share in their core markets and begin to compete across borders, leaving many subscale institutions scrambling for relevance.

Four shifts are reshaping retail banking

Over the next three to five years, we expect a few players to emerge from the competitive scrum to gain dominant share in their core markets and possibly beyond. These firms will have taken bold and decisive actions to capitalize on the following shifts that are reshaping the industry. In some cases, these winners will be incumbents that build on an already significant share; in others, they will be institutions newer to the banking industry, which use their agility, strategic aggressiveness, and sharp execution to attract customers.

1. The traditional distribution-led growth formula no longer applies

Until the financial crisis in 2007, a retail bank’s total share of deposits was tightly linked to the size of its branch network. Over the past decade, this relationship between deposit growth and branch density has weakened. Deposits at the 25 largest US retail banks have doubled over the past decade, while their combined branch footprint shrank by 15 percent over the same period. This reverse correlation is even sharper for the top five US banks—while reducing branches by 15 percent, they increased deposits by 2.6 times (Exhibit 1). While there have been previous periods of branch contraction, they were clearly tied to economic downturns; this most recent wave of retrenchment has persisted through a period of robust economic growth.

Retail-banking branch networks are contracting across Europe, North America, and the United Kingdom (Exhibit 2), although the pace of change varies considerably between regions. Those that are ahead of the curve have reduced branches by as much as 71 percent (Netherlands). Banks in North America and Southern Europe are reducing branches and growing digital sales at a more gradual rate.

The rate of branch reduction is often tied to customer willingness to purchase banking products online or on mobile devices. Eighty to 90 percent of banking customers in the Nordics, for example, are open to digital product purchases for most financial products, compared to 50 to 60 percent in North America and Southern Europe. While customer willingness to purchase products via digital channels varies, however, the common thread is that in all markets this readiness is far ahead of actual digital sales and will require banks to catch up to consumer needs and expectations. Within any specific market, of course, there are banks that have acted swiftly to adopt digital and remote as their main channel for interactions; these banks are pulling away from the pack and have taken decisive actions on several fronts:

• Set a bold aspiration for sales/service channel mix. Banks must do more than react to shifts in consumer preferences—they need to set aspirational targets for sales and service across channels. Some customers will self-select into digital channels, but banks can do more to encourage less motivated customers to make the shift. Banks in markets like the Nordics and the United Kingdom have reduced the number of customers using branches by up to 60 percent by focusing on how to serve the heaviest branch users effectively through other channels.
• Use advanced analytics to reshape the physical footprint. Optimizing the branch network requires a deep understanding of consumer preferences in every micromarket, and of the economics of making changes at the branch level. Leading institutions are using combinatorial optimization algorithms to optimize the net present value (NPV) of the network based on granular customer data on characteristics such as digital propensity, willingness to travel, needs based on transaction patterns and branch usage, and the size and space/format of branches.
• Develop cutting-edge digital sales capabilities. Achieving meaningfully higher levels of digital sales requires sophisticated digital marketing and an understanding of how to optimize each stage of the funnel. Most consumers already seek information on financial products on digital channels, but few institutions are highly effective at converting these inquiries into digital sales. Leading banks use first- and third-party data (for example, geospatial, browsing behavior), a robust marketing technology stack (such as 360-degree view of customer, omnichannel campaigns), and an agile operating model (for example, cross-functional marketing war rooms). With these elements in place, progress can be rapid; a North American institution tripled annual online product sales in 12 months.

Leading a consumer bank through the coronavirus pandemic

2. customer experience is beginning to generate meaningful separation in growth.

Across all retail businesses—including banks—customers now expect interactions to be simple, intuitive, and seamlessly connected across physical and digital touchpoints. Banks are investing in meeting these expectations but have struggled to keep pace. Many are hampered by legacy IT infrastructures and siloed data. As a result, few banks are true leaders in terms of customer experience. Even for institutions ahead of the curve, typically only one-half to two-thirds of customers rate their experience as excellent.

The impact of this less-than-stellar performance is measurable. For example, McKinsey analysis shows that in the United States, top-quartile banks in terms of experience have had meaningfully higher deposit growth over the past three years (Exhibit 3). The few “experience leaders” emerging in retail banking are generating higher growth than their peers by attracting new customers and deepening relationships with their existing customer base. Highly satisfied customers are two and a half times more likely to open new accounts/products with their existing bank than those who are merely satisfied.

These experience leaders are adopting tactics pioneered by digital-native companies in other sectors such as e-commerce, travel, and entertainment: setting a “North Star” based on proven markers of differentiated experience (for example, user-experience design, carrying context across channels), redesigning journeys that matter most for digital-first customers and not just digital-only customers, and establishing integrated real-time measurement that cuts across products, channels, and employees. These banks know that customer experience is not just about the front-end look and feel, but that it requires discipline, focus, and investment in the following actions:

• Focus on the journeys and subjourneys that matter. The relative contribution of subjourneys (such as app downloading; activating account) in determining overall customer experience varies considerably. In fact, ten to 15 subjourneys have the biggest customer-satisfaction impact for most products and should thus be the first priority. For instance, when opening a new deposit account, the researching options subjourney has eight times the impact on customer satisfaction than other account-opening subjourneys, on average. For banks, the key is to prioritize these high-impact subjourneys and systematically redesign them from scratch—a process that can take about three to four months and result in at least a 15 to 20 percent lift in customer satisfaction.
• Change the way you engage with customers. Experience leaders understand that digitization is not just about creating a cutting-edge online and mobile experience, and that satisfaction is shaped by customer experience across channels . The experience should be seamless, especially on journeys that are more likely to take place over multiple channels, such as new account opening, financial advice, or issue resolution . One wealth manager equipped its frontline relationship managers (RMs) with robo-advice algorithms that are in sync with what customers see on the self-directed channel—and provided the RMs with daily and weekly next-best-action recommendations to nudge their clients. Banks need to deploy these tools broadly and empower their frontline staff to play a more consultative role that blends human and digital recommendations. They will also need to revisit how these employees are incentivized, shifting to a longer-term view of relationships and profitability rather than just product sales.
• Translate data into personalized products and real-time offers. The amount of data available on individual customers or prospects has exploded in recent years. The challenge is to convert these data into actionable nudges and highly relevant offers for customers that are delivered at the right moment. Credit-card companies have long offered discounts on specific spending categories or with specific retailers. Today, they can improve loyalty and share of spending by providing location-specific offers right when a customer enters a coffee shop, movie theater, or car dealership. South Africa’s Discovery, as an example, is launching a bank with product features that are informed by behavioral science and incentive-design research.

3. Productivity gains and returns to scale are back

Larger retail banks have historically been more efficient than their smaller competitors, benefiting from distribution network effects and shared overhead for IT, infrastructure, and other shared services. Our analysis of over 3,000 banks around the globe shows that while there is variation across countries, larger institutions tend to be more efficient both in terms of cost-to-asset and cost-to-income ratios. However, beyond a certain point, even larger institutions struggle to eke out efficiencies or realize benefits from scale.

We expect this paradigm to change over the next few years, as structural improvements in efficiency ratios and increasing returns to scale enable some large banks to become even more efficient. The reason is twofold: first, advances in technologies such as robotic-process automation, machine learning, and cognitive artificial intelligence—many of which are now mainstream and commercially viable—are unleashing a new wave of productivity improvements for financial institutions. Deployed effectively, these tools can reduce costs by as much as 30 to 40 percent in customer-facing, middle-, and back-office activities, and fundamentally change how work is done. Dramatic change has already taken place in banking sectors such as capital markets , where algorithmic trading and automation are radically changing the talent profile.

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The second factor leading to a wave of productivity improvement in retail banking is the shift from physical to digital channels for customer acquisition. Banks with scale—and skills in leveraging that advantage—will achieve customer-acquisition costs of up to two to three times lower than their smaller peers. Their outsized volumes of customer data will lead to better targeting and funnel conversion. As investments shift toward digital channels, the productivity gap between large and small banks will widen.

This dynamic has played out in more digitally mature industries, with firms like Amazon and Priceline acquiring customers at a significantly lower cost than competitors. As in these industries, eventually a limited number of dominant firms will emerge, squeezing out undifferentiated midsize and smaller competitors. There are early signs of this trend: undifferentiated smaller community banks in the US have lost a significant share of deposits over the last two to three years, while the three largest banks have gained share. Of course, scale is not everything. Banks that succeed in this new wave of productivity will also have taken the following actions:

• Use cutting-edge technology to automate. Over the next few years, banks will increase their use of technologies such as natural language processing and artificial intelligence to automate customer-facing interactions and complex internal tasks.
• Build and reinforce the brand. With rising digital sales consumers have more choice than ever in selecting a financial-services provider. However, our research shows that across most categories, consumers actively consider only two to three products before deciding on a purchase. So it remains as important as ever for a bank to be part of the initial consideration set. Brands with superior awareness and recognition are not only more likely to be part of the initial consideration set but also achieve higher conversion rates than lesser-known brands when they are considered. A leading credit-card provider in the United Kingdom that invested heavily in brand awareness is now twice as likely to be actively considered—by 17 percent of consumers versus 7 to 10 percent for other brands—and experiences 50 percent higher conversion when considered compared to lesser-known brands.

4. The unbundling and ‘rebundling’ of retail banking

The tight one-on-one retail-banking relationships of old are unbundling. Forty percent of US households today hold a deposit account with more than one institution. It is common to have a mortgage with one bank, an unsecured loan with a different lender, and separate deposit and investment accounts. The banking relationship is fragmenting even faster in countries with higher digital adoption.

This decline of customer loyalty provides a perfect context for firms seeking to enter banking in a selective way— focusing on the most profitable segments . Some attackers have demonstrated that while they cannot compete with incumbent banks’ broad access to customer data, they can compete effectively on customer experience coupled with aggressive pricing.

New entrants in financial services typically begin by focusing on a niche—making either a product- or segment-focused play. Their ambition, however, is often to own the full banking relationship of this segment over time—providing cards, mortgage products, and broader banking services.

The Open Banking movement , heralded by Europe’s second Payments Service Directive and the United Kingdom’s Open Banking Standards, has the potential to accelerate the unbundling of banking in the regions where it applies, leading to increasingly intense competition over the next few years. The requirement for banks to share data and provide access to consumer and small-business accounts through a common framework of application programming interfaces is likely to fuel a wave of innovation and level the playing field for fintechs and technology providers seeking entry through payments or consumer financing.

The trend toward unbundling in financial services is well under way, but where it will lead is still an open question. In industries such as music, television, e-commerce, and transportation, digital distribution led to unbundling that destroyed value for incumbents in the short term; over time, consumers tend to converge on a single provider—often an attacker. In this context, firms that effectively orchestrate platform or ecosystem environments tend to eventually emerge as winners.

The balancing act: Omnichannel excellence in retail banking

The history of the music industry over the last 20 years provides a possible model for how things will go in banking. Until the 1990s, music distribution was dominated by stores selling tracks that record companies “bundled” onto albums. In the early 2000s, digital distribution, especially via iTunes, radically reduced distribution costs. Consumers could now “unbundle” albums by purchasing individual tracks online; not surprisingly, many record stores went out of business. Over the past few years, however, we have seen a “rebundling” in the form of the streaming playlist. Streaming services are now the dominant distribution channel, with a few large players such as Spotify and Apple emerging as winners. The success of these platforms is based on their ability to create highly personalized bundles based on consumer needs and preferences, and a superior interface without the friction of purchasing tracks individually. Leaders have created significant value for consumers by using customer data and insights to deliver a superior experience, rather than by manufacturing the underlying product.

If we apply this scenario to banking, winning firms will be those that leverage superior access to customer data to provide truly differentiated and cutting-edge experiences—potentially extending beyond financial products and services. To do this effectively, banks will need to retain privileged access to information about consumers’ sources and use of funds, especially through payments and transaction activity. Banks that rebundle effectively will use this data to deliver compelling and integrated experiences that provide seamless funding, investment, payments, and money-movement capabilities. The bottom line is that in order to reverse the unbundling of financial services, banks need to make it worthwhile for consumers to have a relationship with one institution; they need to deliver not only simplicity and convenience, but also superior value. Only a few banks in each market are likely to be able to succeed with this strategy.

Already, large technology firms such as Amazon are extending into parts of the financial-services value chain, starting with areas where they have a data advantage such as payments, short-term financing for purchases, and working-capital loans for merchants on their platform. To counter the unbundling of their most profitable products, banks need to develop capabilities that few currently possess, and follow the lead of successful technology platforms:

• Retain superior access to data on transactions and financial behavior. As vast amounts of data are captured by tech firms on consumers’ behavior and preferences, one of the last bastions of valuable information is data on transactions and financial behavior. To retain unparalleled access to this data, banks will need to continue to own the transaction layer, giving them a full view of inbound and outbound activity, to form a complete picture of consumer balance sheets. Historically, this required a bank to be a customer’s primary checking-account provider; over time, we expect that institutions could do this without necessarily owning the checking-account relationship. In some cases, payments or transaction providers could see a significant share of customers’ spend volume. Financial aggregators may also be in a position to capture a broad spectrum of customer activity and use it to build an analytics advantage.
• Leverage insights to develop innovative products and features. The traditional suite of products that financial institutions offer has remained largely unchanged over the past few decades and is often structurally hard to change given how banks are organized. More nimble firms will be able to leverage insights to create unique offerings—for example, cash in a checking account could automatically be optimized for return based on financial behaviors and spend patterns without needing to ring-fence and transfer it to a separate high-yield deposit or brokerage account.
• Extend beyond purely financial services and products over time. There are a couple of clear benefits that financial institutions are likely to have relative to ecosystems being created by large tech firms. Superior access to financial information enables them to create faster and more precise offers for big-ticket products that have financing needs associated with them (such as homes or cars). For these types of products, banks could be well positioned to own the full customer journey, including the browsing experience and the transaction. One Northern European bank has developed a mobile app that integrates house searches, booking viewings, budgeting, transactions, and help with setting up a new home (for example, utilities, appliances, and renovation).

Retail banking is at an inflection point, and we expect the pace of change to accelerate significantly over the next three to five years. Success will require clarity in direction, and speed and agility in execution. Retail banks that capitalize on current shifts in the market will emerge with a winning position in their core markets and begin to compete across borders.

This article is an edited extract from the full report,   Rewriting the rules: Succeeding in the new retail banking landscape (PDF–680KB).

Vaibhav Gujral is a partner in McKinsey’s New York office, where Nick Malik is a senior partner; Zubin Taraporevala is a senior partner in the London office.

The authors wish to thank Ashwin Adarkar, Jacob Dahl, Filippo Delzi, Miklos Dietz, Dave Elzinga, Darius Imregun, Somesh Khanna, Marc Levesque, Alejandro Martinez, and Robert Schiff for their contributions to this article.

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