Covid-19 has sped up customer experience transformation for retail banks

Businesses faced exceptional challenges in 2020, and retail banks were no exception. Having to adapt — almost overnight — to a world reshaped by the Covid-19 pandemic meant making significant changes to how their businesses are run and how customers interact with them. Against a backdrop of a series of national lockdowns that saw many people struggling to reach a high street bank branch, 89% of financial services companies say they implemented new tools or processes last year, while 62% were managing remote staff, according to our own Customer Experience (CX) Trends Report.

Given the circumstances, a 10-20% rise in digital banking use across Europe is unsurprising, but with CX moving mostly online, and in-person interactions reduced to a minimum, good omnichannel customer service has become even more fundamental to those already frustrated by disruptions to their usual habits and routines. Financial service companies have seen a 19% increase in customer engagement over the past year, but using the pandemic to excuse poor customer service (CS) is wearing thin one year on — and that places a lot of pressure on banking staff. No wonder 69% of support agents in the sector report feeling overwhelmed.

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Switching banks has never been easier

Although the shift to digital has been a long time coming for some traditional bricks and mortar financial institutions, companies previously slow to transition now face an even greater sense of urgency. Thankfully, many have reacted fast to up their digital service game, with more than half of financial services companies reporting they increased their CX budget in 2020. That’s just as well, given that younger consumers are proving they won’t hang around if they feel like their needs aren’t being met. Last year, over half of UK Gen Z adults switched their main bank account within two years of turning 18, compared to only 16% of baby boomers.

This reflects a growing ease with which consumers can now move their money around, thanks to legislation like EU Directive PSD2, which became applicable in 2018. By regulating payment services and encouraging the adoption of online and mobile payments through open banking, it has put digital and mobile-first banks like Monese, Revolut and Starling Bank on a level playing field with high street household names – and made CX an important competitive differentiator. With brands like these offering everything from real-time balance updates to in-app messenger support, they are transforming the very nature of banking CX. These challengers are making it easy for customers to get advice, help and support across many channels, with a joined up experience that takes their financial goals into account.

Monese is a great example of a bank that identified an experience gap in the industry — the Fintech company provides a banking app, with an account and debit card, that makes it easier to get settled in a new country. Their mobile-first approach to banking from anywhere makes it easy for customers to open up an account on their phone in a matter of minutes and get real time notifications on the app. The bank has also matched this with a flexible approach to service — in multiple channels and multiple languages. With a connected service platform, Monese’s customer service team is able to take a true omnichannel approach, delivering service on their app, Facebook, Twitter, phone and through self-service. Deeper and more flexible analytics also help the team understand what customer pain points are so that they can continue to improve on the experience. Monese’s customer-centric approach has helped the team improve their first response time by 59% and the company to connect their understanding of the customer across the business.

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Agility will set retail banks apart

The ability to adapt quickly to changing customer behaviours has long been a useful business skill, but world events in 2020 have really upped the stakes. The good news is that CX teams in retail banks are handling the transition better than most. Almost three-quarters of agents feel they have the tools they need to work from home, while over half (58%) say they have access to developers, so they can customise support solutions to accommodate changing needs. With consumer demand growing for more personalised advice, data from decades of homegrown and on-prem legacy systems are also rich resources that traditional banks can leverage, while adhering to strict regulations to maintain consumer trust and prevent data breaches, of course.

Traditional banks may have been slow to fully adapt to, and champion, a more agile working model, but 2020 has made it a priority for all brands wishing to thrive in the new ‘digital-first’ normal. This is not only about embracing new technology and processes, but also bringing about a cultural shift in businesses with a long history behind them. Customer behaviours will no doubt shift again as lockdowns begin to ease and adaptable CX will lie at the heart of customer satisfaction going forward. 2021 will therefore require an agile, omnichannel approach to all things data and digital, so that brands can offer customers everything they need.

Written by Andrew Lawson, senior vice-president EMEA at Zendesk

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