Industry context

Governmental economic response to the pandemic has put the banks under considerable financial pressure. Many banking institutions will endure some operational losses: their borrowers' financial strength will fall and extended low interest rates will also reduce net interest margins (NIM). Banks are having to review their risk profiles, operating models, and strategic approach to manage the financial impact.

The capital strength of banks pre-pandemic have ensured they are part of the solution, not part of the problem, as was the case in the financial crisis of 2008. Institutions sought to support governmental efforts by fulfilling their basic function - that of providing companies and individuals with loans and liquidity - in extremely difficult conditions. This has helped keep the economy afloat. However, the consequences are only now beginning to play out.

The near future will pose a challenge for banks. There is growing concern that potentially high levels of inflation coupled with a rapid growth in public debt provides significant risk to economic growth. Central banks are reviewing their monetary policy and face a tricky dilemma increasing interest rates to stem inflation which in turn will have a negative impact on fledgling economic growth.

Key trends

Against this commercial backdrop, financial services in 2020 was defined by an unexpected hyper-acceleration in digitization and digital engagement—pushed by the impacts of the COVID-19 pandemic. The emergence of banking as a service through BaaS platforms is encouraging banks to partner with fintechs to better service their customers.

The work of fintechs and banks promoting AI will enable smarter lending while the transparency and security of Blockchain will benefit customers by eliminating manual processes and considerably reducing the time of transactions.

Other changes include an acceleration of mobile banking with increased mobile payments, as well employees finding themselves working from home like many other sectors. Indeed, some banks (Virgin Money and Nationwide in the UK for example) have said that employees can now work from anywhere.

The key trends across each of the Six Pillars are as follows:

Banks are looking at how they avoid 'greenwashing' and play an active part in supporting actions to limit climate change. Banks are also making real efforts to better reflect society in their leadership. Cyber-crime, privacy and fraud are all upper most in their customers minds, considerable efforts have been made to improve digital security and reassure their customers.

Banks have had to, beyond just mobile banking, give customers greater control and equip them to deal with difficult situations themselves, for example providing additional tools and features. Technology based services such as chatbots for example have enabled more rapid query handling, however, customers still need rapid access to a human being for more complex queries.

COVID-19 has reshaped customer expectations and as competition increases, banks are focusing on improving operational efficiency and CX to better serve customers across all touchpoints. Significantly, keeping customers informed and accurately setting and where necessary resetting expectations is a key part of this.

Time and Effort
As banks increase their digital presence, they must keep accessibility as a priority, and the disparity between channel capability is disappearing as banks become more omnichannel offering the same services and products through all business channels. This can include online, in-person, or over-the-phone business. The importance of mobile accessibility is more crucial than ever. Customers expect access to most services from the convenience of their smartphones.

Despite the rise in digitization customers still require personal attention and service. The growing influence of millennials, personal touch is key in maintaining valuable relationships in the banking sector alongside the evolving technologies. Digital though is the gateway to hyper personalization. USAA for example predicts important events in the lives of its customers, using historical data to train analytics models. The technology is able to predict nine major life events with a high degree of accuracy. The goal is to use this information to make more relevant offers and information available to USAA members so the experience feels much more personalized.

At one level this is about banks showing that they genuinely care about their customers, and at a day to day level it is about banks understanding and responding appropriately to the emotional state of their customers. It is a bank's ability to adapt everything, from its distribution channel and its tone of voice, to the customer's financial need and emotional disposition.

The Customer Experience Leaders

2022 promises to be a better year for banks as those that lead our indices are pioneering innovative ways to excite, inspire and delight their customers.

Starling Bank in the UK has risen in our index and now leads the UK ranking across all companies. Listening to its customers has been the central tenet of its growth. ‘Our goal has always been giving our customers the bank they tell us that they want and one which puts them in control of their money and their data. We know exactly what our customers want too – because they tell us every day. We’ve always welcomed and encouraged the interaction. Their suggestions, positive and negative, help us stay ahead of the curve when it comes to new product development. Plenty of Starling’s premium products you now see are a result of someone getting in touch and saying: wouldn’t it be great if …?’1

For USAA, who continually top our US index, it is a simple matter of more of the same – it is about feeling part of a caring family. Employees and customers are on the same team working towards the same purpose: to help customers reach their financial goals. The attitude of being part of a family changes the interactions between customers and employees. Instead of trying to up-sell new products, employees understand each individual and work with them to help them meet their goals.2

Bendigo Bank in Australia is an excellent example of how banks are partnering with Fintechs. Initially engaging with fintech Ferocia, they have sought to disrupt the traditional banking model focusing on technology led banking rather than bank led technology.3

The result was the UP-platform - a mobile only digital banking platform which is now Australia’s highest rated banking app. The app used the bank’s core technology infrastructure and was developed by Ferocia to engage and inspire a new generation of savers looking to accumulate funds for a house purchase.4

The assets are invested ethically helping finance community-owned, renewable energy projects like Hepburn Hydro and solar panels in schools — not fossil fuels or coal seam gas.

We have continually noted the importance of personalization within digital channels to mitigate the risk of becoming commoditized. Another consideration for banks is potentially a lack of effectiveness in cross selling other banking and investment services through digital channels versus what occurs with in-person interactions and relationships in a bank.

Francisco Uria Fernandez
Global head of banking and capital markets


Banking industry Hall of Fame 2021

Air Bank

Czech Republic

Bendigo Bank


Fineco Bank


ING Bank Śląski




Navy Federal Credit Union


Raiffeisen Bank




Starling Bank

United Kingdom



*Brands are listed in alphabetical order