Graphic illustration representing interconnected banking services.

Service Design In The Banking Sector

Opportunities In customer-centric services for Ireland’s banking sector.


Written by Fiona Murphy and Mark McNally

Last month we looked at the UX revolution in healthcare and how changes in that sector are moving towards putting the customer at the centre of the service. The banking sector is experiencing similar upheaval at the moment and facing similar challenges. In this article, we look at six design problems specific to banks, and how these challenges offer opportunities to re-imagine banking as a service.

Losing The Personal Touch

When online banking arrived in the nineties, it revolutionised the sector and provided real benefits. Today, it remains one of the most valued services online. Since its arrival, other forms of self-service, like phone banking and in-branch self-service kiosks, have also been introduced, offering multiple automated channels.

The issue is that customers often perceive this increased automation as existing mainly for the benefit of the bank, rather than as an improvement in customer service. Customers feel pushed towards these automated channels and away from more traditional ones, particularly in the face of branch closures. In the background to this increased automation and decreased personal customer service is the global financial crisis, which has amplified a feeling of distrust in banks in general. Overall, this spells out the degradation of the relationship between banks and their customers.

Neglecting The Total Customer Journey

Many banks look at the opportunities afforded by technology from a cost-saving viewpoint, rather than focusing on their customer’s experience. The result is channels of engagement that often contradict each other and frustrate the user.

Banking is effectively a service and customer interactions are central to all services. When services are not automated, there is typically someone who will guide the customer through the process, helping them to troubleshoot and achieve what they want. This ‘soft’ interaction is central to avoiding UX friction and automated systems need to work that little bit harder to achieve the same thing.

It is crucial to look at the interdependencies between services when implementing automation so that no gaps appear in the customer journey. Customers will not necessarily engage with their bank in a linear fashion, and banks need to consider the possibility of disjointed interactions to avoid disagreement between channels. The ultimate goal is to have all channels working harmoniously.

Departmental Silos

Departmental silos, meaning a lack of communication between teams, can result in an illogical and tedious journey for the customer where their story has not been shared effectively across the organisation and they need to repeat their request or query at each touchpoint.

Silos are not uncommon in large organisations, but they can be the greatest cause of negative customer experiences. While it is difficult for individual employees to have a thorough understanding of all products, services, and processes, the onus cannot be put on the customer to ‘figure it out’. Addressing this issue may require significant organisational change, including at a structural and cultural level.

Apart from frustrating the customer, the problem of silos also creates an inaccurate feedback loop for banks in terms of how customers are interacting with their services. A customer may have to physically visit their branch in order to sign for a mortgage, but their journey up to that point may have taken place entirely online. The mortgage is recorded as a success for the branch service rather than the online service. The bank receives the wrong message about patterns of customer behaviour, meaning they probably miss an opportunity to develop or re-think their service.

The Compliance Barrier

Even with the best intentions towards a user-friendly service, banking can fall at the hurdle of security and cautious compliance departments. A major problem here is the lack of consistency across banks in terms of what they tell their customers is and is not permissible. This is down to some compliance departments being more risk-averse than others. For extremely risk-averse banks, there is a tendency to refuse certain customer requests point blank, blaming a bureaucratic barrier, instead of trying to find a way to fulfil the customer’s request.

Missing The Opportunity to Leverage Big Data

Banks are missing a trick when it comes to the range of information they have about their customers. When a bank possesses a sizeable percentage of their customer’s ‘financial wallet’ (that is, they are the sole provider of most of the financial products and services the customer makes use of) it offers a comprehensive picture of their behaviour. Loyalty card programs have leveraged this asset to the benefit of other types of business, so why not apply the same principle to banks? Financial institutions have in their possession some of the most valuable information on customers: data about the money they make and what they spend it on. The key thing to remember is that banks should consider how this data can best serve the customer.

Commodification of Products and Services

If banks do not provide excellent customer service, they risk the possibility that customers will view financial products and services in terms of their bottom line alone and will shop around for the best value in terms of rates. In this case, banks risk losing out to competitors.

Turning these Challenges into Opportunities

With the rise of neo-banks and financial aggregators, institutions that aim to appeal directly to the next generation of digitally-savvy customers, the opportunity to re-imagine the banking service becomes a necessity for traditional, mainstream banks if they wish to hold on to their customer base and continue to grow. Some of the issues discussed above can offer opportunities to achieve this.

Technology is a Great Liberator

Neo-banks are in the choice position of being able to re-think their financial offering from first principles. For established financial institutions, the opportunity is different: to take existing infrastructure and repurpose it to build strong customer relationships. The challenge is to identify what benefits can be provided to customers through these existing channels and how to deliver those benefits.

Contact with customers is important and is central to building relationships. It is crucial to ensure the customer does not feel neglected or pushed aside by technology. A critical look at the resources that are freed up by automation can create opportunities to enhance personal customer service.

Customer Service that Adds Real Value

Often, customers will hold different products with different institutions — while they retain their current account with their original bank they may have their savings account or mortgage with another. Customers are generally indifferent (if not somewhat negative) about their banks and tend to think all banks are the same. This can result in customers retaining their original current account but collecting other products across various institutions, essentially spreading their ‘financial wallet’.

But it is this customer apathy towards banks that offers the chance to make an impact. An outstanding customer experience that integrates channels can increase customer loyalty and encourage uptake of products and services within the same bank. And it is self-perpetuating: the more products a customer has with a financial institution, then the more the bank can understand the customer’s needs and behaviours, providing even greater opportunity to strengthen their relationship.