How customer needs are driving digital transformation in banking

Author BIOPublished 5 Min Read

Customer needs in the banking sector are driving change across several fronts – traditional players continue to ferociously invest in the customer experience-driven transformation and are starting to realise the power that strong links between digital and physical holds in bringing customers back in-branch. Purely digital entrants like Monzo and Revolut are maturing and moving from simple micro-service providers to fully licensed banks in both the US and the UK. And the emerging competition from third-party investors are fragmenting the industry. What does it mean for new entrants in the banking sector? Competition is fierce and to disrupt the market, new banking challengers need to focus on a solid customer experience and performance prediction research to design results-driven services wrapped around customer needs.

B2B banking: supporting SMEs with the right digital banking tools

One vertical that needs extra attention is SME banking. SMEs are the lifeblood of the UK economy, contributing more than £200 billion a year. Yet, they’re massively under-served and often overcharged by the banking industry. Challenger banks like Monzo and Revolut have created a move towards re-designing customer experiences, but the big banking institutions are still focusing their efforts on large enterprises or individual clients, with few services available that truly support SMEs. But with the emergence of new app-based banks, this is now slowly changing.

Coconut, a recently launched UK challenger bank, is one player stirring up the B2B banking landscape. Earlier this year, they partnered with PrePay Solutions (PPS) to deliver an app-based account for freelancers and the self-employed, enabling users to easily manage tax and expenses. Designed to benefit from HMRC’s Making Tax Digital Initiative that will require all SMEs and self-employed people to file quarterly tax from April 2020, Coconut offers a number of services shaped around the needs of freelancers. From easy mobile-based account opening, to real-time notifications on all transactions, and receipt storing – all Coconut’s functionality is feeding into a real-time tax assessment preview to support the self-employed in budgeting for tax bills.

So there are signs that the B2B banking market is moving in the right direction, taking the lead from popular players in B2C. But how can these new challenger banks make sure they’re doing enough to support the needs of modern businesses? How can they ensure they deliver services and define a digital transformation programme that can really disrupt the banking market?

Focusing on customer needs and performance prediction are key to deliver successful digital transformation

The market needs disruptors that will continue to unbundle the industry and define the future of B2B banking. But any new solutions need to be results-driven and derived from fundamental customer needs to survive in this competitive landscape. A new state-of-the-art bank should be shaped around both individual and business owners, understanding the root causes of current problems and resolving the current pain points they experience throughout the journey. But to ensure these new banking experiences work and deliver outcomes that boost ROI, any digital transformation programme in banking – whether delivered by market challengers or bigger legacy banks – need to be delivered based on performance prediction and prioritisation of innovation opportunities pre-launch. Only then they can maximise the potential of receiving payback, quickly.

Heightened customer expectations from B2Cs are now permeating the B2B landscape – what we learnt to demand from brands like Google and Amazon in our leisure time is now setting the tone when it comes to our demands as business clients. And it’s true for banking too. Consumers want the same level of control and real-time omnichannel interaction from banks that they are finding in other sectors. In a recent Accenture survey, almost half of respondents stated they want relevant advice and product information at their fingertips, and 61% believed removing friction from the customer journey is the most important trend for the banking industry in 2018. And regardless of whether it’s an individual or a business account user, the key thing is, customers want to partner with financial institutions they can trust. Which is why it’s transparency, ease and speed of use that will drive real loyalty. One-click payment process, moving around money in real-time, and ability to quickly compare bank rates should really be standard now. But armed with the right customer knowledge, new entrants have an opportunity to do so much more.

So, what are the key three trends that represent what modern banking customers expect from today’s B2B banks?

1. Relevancy is key to deliver digital transformation in the banking sector

Banking customers want tailored advice at their fingertips, plus they want relevant and easily accessible support and product information that they cannot find at other banks. And they are merciless when it comes to their service expectations – 33% would abandon using a brand if it didn’t provide them with a personalised service that is relevant to their needs.

2. Omnichannel experience to define CX excellence in banking

Omnichannel experiences are key to drive banking customer loyalty and trust – 64% say it’s important for them to have access to tools that allow them to seamlessly switch between different channels. By 2020, this will be amplified by the need for a nearly perfect execution. The pressure is on.

3. CX leads the game

CX excellence offered by digital giants has created a deep loyalty, even when it comes to services beyond the core proposition. As much as 31% would consider using banking services from companies like Amazon or Google, which rises to 41% among Gen Z. To achieve a similar level of loyalty, banking disruptors must recreate a similar level of innovation-led design thinking that always puts customers at the heart of any new solutions, together with beautifully designed interfaces. Removing any friction from the customer journey is a good way to start.  


While expectations for digital fluency might be similar, any new player must remember that when it comes to experiences and services delivered by banks, customer needs will differ from case to case. Size and type of business, business context, personal circumstances and even their psychological profile will have a part to play. Those banks that dedicate themselves to catering for many different needs and provide a service that feels genuinely personal and appropriate are the ones likely to succeed while others fall by the wayside.

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