Why customer experience is extremely important in banking

Banks to balance technological advancement with trust-building customer engagement.[File, Standard]

Every so often, there comes a turning point in business when maintaining the status quo is no longer an option. For banks, that moment has come, and it demands transformation. The world we inhabit is rapidly evolving, and customer expectations are no exception.

What once passed as excellent service, be it transactional efficiency or a polished product, is no longer enough. Today, success is built on a holistic value proposition that blends operational efficiency with personalised, trust-building engagement.

Customer onboarding platform OnRamp notes that 89 per cent of businesses will compete primarily on customer experience in 2025, surpassing traditional differentiators such as product features or pricing. This signals a huge shift in priorities. In banking, where loyalty is notoriously fragile, how you make customers feel is quickly becoming more critical than the services you provide.

Kenyan banks have witnessed a fascinating paradox over the past several years. Despite the migration of millions to mobile and digital channels, brick-and-mortar branches remain a cornerstone for accessibility and trust.

According to KPMG’s 2024 Beyond Satisfaction, Towards Delight report, 47 per cent of customers still cite branch experience as their primary reason for loyalty. While digital transformation is inevitable, customers are still humans craving authentic, personalised engagement. Within this lies an opportunity for banks to integrate both cutting-edge efficiency and emotional connection into their offerings.

For transformation to succeed, we must begin by redefining its purpose. Too often, innovation is seen through only one lens: technology. But transformation is much bigger than digital platforms. Fundamentally, it is about unlearning outdated processes, rethinking organisational purpose and empowering teams to challenge convention.

Words like “efficiency” or “value” are not the preserve of senior executives. They must become the language of the entire workforce, from frontline staff to mid-level teams, all the way to back-end support roles.

True value creation happens when every employee, regardless of their title, sees themselves as a stakeholder in the bank’s mission. In simple terms, innovation must stop being someone else’s job. It is everyone’s responsibility. 

Equally critical is customer feedback. It can no longer sit in spreadsheets buried as data points. It must be operationalised. The bank that quickly anticipates and responds to customer concerns, whether through well-designed product upgrades, emotive value propositions, reduced bureaucracy or faster resolutions, cements itself as not just a provider but a partner.

It is also time to turn inward and celebrate intrapreneurship. The practice of employees acting like entrepreneurs from within a company unlocks everyday problem-solving and measured risk-taking. Such discipline is a transformational tool that enables organisations to disrupt themselves before competitors can.

Across forward-looking companies globally, internal innovations have been pivotal in solving long-standing inefficiencies or unlocking untapped revenue streams. Banks need to reflect the same focus. Transformation is rarely glamorous, nonetheless. It involves trial and error. But herein lies the secret ingredient: Agility. Banks that learn quickly, course-correct and move forward will always have an edge over those who hesitate, bogged down by the fear of failure.