Changing landscape of customer experience in banks - Amity Institute Of Training & Development

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Customer experience in banking has assumed importance, especially after the advent of digitisation and artificial intelligence (AI). In the Indian context, one of the banks that adopted customer experience as a business strategy and derived significant benefits is ICICI Bank. This article briefly narrates the journey of ICICI Bank in redefining customer experience.

Understanding Customer Experience in Banking

Customers expect their banks to provide fast, frictionless, and personalised services. With digitalisation, customer experience is now a key differentiator between performers and laggards. Generally, banks that provide superlative customer experience also achieve better financial metrics such as shareholder return, growth, product penetration, etc. Studies also suggest a positive correlation between customer experience and the number of products bought from a bank (Shital Chheda et al., 2023).

Traditional Banking Services vs. New Age Banks

To provide a seamless customer experience, banks need to have an optimum mix of physical customer interface and digital delivery. Traditional banks with limited digital and AI capabilities encounter frictions in onboarding new accounts, customer query resolution, the status of loan applications, the way fees are applied on various products and services, information on product offerings, etc. The friction can be due to silos created by the front office, mid office, and back office or due to limited information exchange between different product verticals and support functions within the bank (Nick Malik & Akshay Kapoor, 2019; Shital Chheda et al., 2023).

Frictions can also be due to limitations in the capabilities of human resources, digital platforms, etc. Similarly, while selling a product, traditional banks with multiple products and established processes often focus on selling specific products instead of identifying specific needs and a gratifying customer experience. In such an approach, the salesperson does not have a full understanding of the customer profile, the existing products available, and the actual customer needs. Although such banks generate business volume due to their size, geographical spread, vintage, and fleet on the street, they often lack giving a wholesome customer experience.

The new-age banks have a more data-driven approach to sales and services. These banks have the capabilities to aggregate customer banking data from all the verticals and use AI to study the customer behaviour to hyper-personalise the engagement and offerings to the customer. A data-driven approach not only helps in providing a more personalised product but also facilitates the delivery of products and services as per the needs of the customer.

These banks are able to deliver a wholesome customer experience by providing frictionless onboarding of new customers by building smart processes supported by extensive digitisation. Similarly, a multichannel approach backed by functional expertise for customer query resolution helps in minimising emotionally charged interactions relating to deficiency in delivery of services or charges levied (Renny Thomas et al., 2020; Sergey Khon et al., 2022).

Customer Experience in the Indian Context: The ICICI Bank Example

One of the examples of a bank that has focused on customer experience in the last few years and reimagined their strategic priorities is ICICI Bank. The bank adopted Customer 360°, which is aimed at bringing the entire bank to the customer as well as their ecosystem to meet their requirements. The three pillars of Customer 360° are process decongestion, bank-to-bank tech, and HR measures (ICICI Bank—Annual Report, 2023).

1. Process Decongestion

essentially improves the operational efficiencies by digitising some of the processes and removing redundancies. Friction points like onboarding of new customers have been addressed by introducing digital onboarding for savings and current accounts.

Other friction points like customer queries have been smoothed by enterprise-level CRM and Virtual Relationship Manager (VRM). Other initiatives like the digitisation of the entire credit underwriting process and the instant loan approval process help in keeping the customer well informed about their loan application and sanction.

2. Bank to BankTech

is a transformation in which technology is assuming an integral role in the overall business strategy. Some of the digital platforms, like iMobile Pay, InstaBIZ, and Trade Online, provide end-to-end seamless digital journeys, personalised solutions, and value-added services to customers and enable more data-driven cross-sell and up-sell. These digital platforms ensure smooth and spontaneous product penetration without hard selling to the customer.

3. HR Measures

mainly includes investing in capability building in employees through in-house functional academies, industry-academia initiatives, etc. Other initiatives include job rotation to develop expertise in different domains and the creation of cross-functional teams to tap into key customer and market segments across ecosystems, enabling 360° coverage of customers.

Customer 360° is enabled by working as one team across various departments of the Bank by bringing together the strength and expertise of each employees.

To encourage teamwork, the bank also scrapped the bell curve assessment for employees, which rewards individual outperformers as part of a human resource (HR) policy overhaul (named “one bank, one team”). This focus on team performance led to the bank’s superior financial and operational performance (Anand Adhikari, 2023; Rebello, 2021).

ICICI Bank’s Performance Transformation

Way forward

The story of ICICI Bank clearly demonstrates the importance of customer experience in driving the financial and operating performance of banks. In order to achieve superior customer experience, banks need to focus on three important building blocks of customer experience, i.e., a well-defined and strong aspiration to deliver customer experience in all aspects of banking, embark on a transformation journey that includes transformation in people’s mindset, process reengineering, and deploying new capabilities like AI for superlative customer experience.

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