Trust vs Experience—How do Banks Balance Customer Experience and Risk?

The exponential growth in e-commerce adoption and the ability to transact instantly has become the expected norm for customers. As digital transformation accelerates in financial services, banks are realizing that the wealth of the customer data they already have, can help them provide more personalized experiences. While that aligns with what customer’s want, there is also an expectation of security and that banks will be able to keep customer’s money and personal information safe.

Recently introduced legislation such as Europe’s GDPR and California’s CCPA regulations have set clear parameters for measures that companies need to take to protect customer data.Advanced technologies such as artificial intelligence (AI) are being used as an enabler to drive better customer experiences and improve operational capabilities in banks. In a digital economy it’s deemed necessary. Banks lagging in their digital adoption are at risk of losing clients to competitors who offer more compelling digital banking experiences. 

Yet the threat of cyberattacks is real and financial institutions are often targeted. Is there a way to achieve balance between delivering great digital customer experiences (CX) while mitigating risks? Let’s first consider what’s important in delivering great customer experiences. 

What kind of digital experience do banking customers want? 

The demand for greater personalization in banking is driven by the pace of modern life. People don’t want to be bombarded with irrelevant offers and they expect to be able to transact easily and quickly. Understanding the whole customer journey and optimizing the digital experience at every touchpoint enables better engagement with customers. It’s when glitches happen, or when apps or systems fail that customers get frustrated and lose trust. 

The interesting fact about CX in banking is that customers aren’t really looking for bells and whistles, they just want efficient, frictionless experiences. Wowing customers is as simple as enabling quick transactional capabilities, every time. And when they’re signing up for a new service, to have the right information presented in the right way so that it builds trust and creates an experience free from anxiety or frustration.  

Customer experiences that deliver value drive loyalty and growth

Most customers are well aware of cyber threats and the risks of digital banking and that is why customer experience is so important. A customer-centric approach communicates that the bank cares about their customers as much as its business and will look after them. Every time a bank delivers a frictionless experience, it builds trust and loyalty—which keeps customers focused on the benefits more than the risks. 

AI can be used to help build trust further by enabling better CX and it doesn’t need customers personal data or cookies in order to do that. A lot can be done using data such as location, region, time of day, season and device type. Using these parameters, a bank can serve up unique ideas on a website or app, it can analyze live customer responses to determine top performing experiences. This translates into meaningful insights that banks can use to respond quickly to changing customer needs. Once again this cements the focus on delivering value for customers, while inadvertently building trust and optimizing for growth. 

Can digital experiences enhance security?

In a recent report, Gartner predicted that by 2024, 60% of AI providers will need to mitigate threats, as part of their technology solution. Another report cites that while financial services were the most impacted by GDPR, the changes that needed to be made were minor, because high level security systems already existed. 

So much of this comes down to the digital experience, both internally and with the customer interface. When it is accurately mapped and the user experience (UX) is clearly thought out, it reduces the vulnerabilities that cybercriminals can exploit. While not a case of cyber fraud, Citibank recently found this out the hard way, losing $500 million due to a poorly designed UX (read article).

Finding the balance between generating trust and delivering great experiences is based on the understanding that the two elements can work together as part of a customer centric growth strategy. There will always be risk in business, especially in financial services. Being weary of technologies such as AI has little benefit, it won’t reduce the risk and it won’t help banks improve their CX. Being proactive in terms of digital adoption can enable banks to enhance customer trust, loyalty and experience while still maintaining a keen awareness on possible vulnerabilities. When these priorities align, AI becomes a key enabler to delivering digital experiences that help build trust.