Financial ServicesStrategy and InnovationApp Development

Three Fundamental Changes to CX in Consumer Banking, Accelerated by COVID-19

The COVID-19 pandemic has rapidly introduced a historic amount of change to the consumer marketplace — with companies needing to quickly pivot their customer experience (CX) and even business models to meet evolving customer needs and expectations.

For banks and lenders, just a few changes we’re seeing include:

  • An influx of first-time web and mobile users
  • Rapidly expanding financial uncertainty for bank customers
  • The role of the bank branch being tested like never before

AppsFlyer found that U.S. banking app installations spiked by 60% during the heart of the stay-at-home period in the first half of April. For retail banks and indeed across all consumer-facing industries, the pandemic is accelerating a process that had already begun for industry leaders: advancing digital capabilities to enhance the customer experience.

“The current crisis is not the driving force behind Key’s growing investment in digital, Rather, it highlights the importance of digital capabilities and products, and the importance of speed and seamless integration.” - Jamie Warder, Head of Digital at KeyBank

As digital strategists, an important part of our job is to understand which of these changes will stick even past the pandemic, so that we can help our clients prepare not just for the next few months, but for the next few years of their digital roadmap.


What We Expect for the Future of Banking CX


1. Contactless payments & digital wallets see further market penetration

Even before the pandemic, contactless was gaining traction as a preferred payment method; Juniper Research predicted in February 2020 that global contactless transaction values would rise from $2 trillion to $6 trillion in the next 4 years.

Since then, Mastercard’s April 29 Global Consumer Study has shown that 46% of global consumers have swapped out their top-of-wallet card for one that provides contactless functionality. Looking ahead, 74% of consumers said that they will continue using contactless post-pandemic. With reduced use of signatures, cash, and plastic cards, any form of digital payment will be more likely to appeal to the current market.

Opportunity: Expand digital payment offerings to maintain wallet-share through the current crisis and beyond.


2. Increased investment in voice assistants and chatbots to support digital users

In mid-2019, WillowTree CEO Tobias Dengel wrote that voice should be the cornerstone of your digital banking strategy. Bank of America has reaped the benefits of this strategy with its virtual assistant Erica, which has continued to evolve from transactional features like balance inquiries to more complex and proactive capabilities like spending insights and budget assistance. Erica’s user base has grown significantly over the past few months during the pandemic, spiking from 10.3 million users in Q4 2019 to 12.2 million in Q1 2020.

We expect that companies will continue to invest in AI-powered assistants, especially to handle low-complexity issues and to help onboard first-time digital users.

Opportunity: If you haven’t already, incorporate voice experiences into your digital roadmap — we anticipate that brands and their users will get the highest ROI from giving their apps a voice, and connecting voice into your existing digital ecosystem.


3. Greater reward for those who do personal financial management (PFM) well

In 2019, even before the onset of the coronavirus in the United States, less than 30% of households were considered financially healthy, according to The Financial Health Network’s Trends Report. Record rates of unemployment and economic instability will be as much of a burden if not more so than the 2008 financial crisis. We anticipate increased demand for personal finance management (PFM) capabilities. FinTech organizations like Chime, Simple, and Stash are highly advanced in PFM as they were born to meet this need, and now compete for wallet-share with other consumer banks.

Opportunity: Pilot more advanced PFM in your mobile app or customer portal. In a challenging economic situation, banks who invest in more advanced PFM capabilities will reap the rewards that come with being there for the customer when they need it most.

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Across these changes, meeting customer expectations during this time requires advancing digital capabilities to meet customers where they are. While we don’t expect the branch to completely disappear, the customer experience has shifted online, and users will continue to have high expectations of the digital CX long past the pandemic.

Above all, we hope you are safe and healthy during this time. If you have thoughts or questions on how consumer banking can or should weather this current storm, we’d love to hear from you.

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