Rethinking the digital customer experience

Each month, the experts at Visa Consulting & Analytics (VCA), Visa's advisory arm, deep-dive into one of the 10 key priorities for payments-industry stakeholders in 2024 using anonymized VisaNet insights, interviews, and data-driven research. This month, the focus is on emerging trends around the digital customer experience and the importance of delivering an exceptional experience across the entire customer lifecycle.

The digital customer experience (CX) refers to how a customer perceives, engages, and interacts with a business online via their digital channels. As digitization accelerates in all industries, including in financial services, customer expectations for compelling digital experiences continue to drive innovation across the customer lifecycle. When designing an exceptional digital experience, many financial institutions (FIs) focus on how to reduce friction with a smooth and intuitive visual design. While this component is important, advanced analytics based on consumers’ behavioral and spending habits are just as—if not more—critical to consider when creating an exceptional CX. Across the payments industry, from the instant digital issuance of payment cards and the hyper-personalization of sign-up offers to location-based merchant offers, endless opportunities exist for FIs aiming to customize digital journeys to drive higher engagement and improved loyalty scores.

Why digital CX should be top of mind for FIs

In every industry, CX matters. One CX research project showed customers are uncompromising when it comes to their expectations regarding their experience: More than 70 percent reported speed and convenience were "must haves," more than 30 percent would no longer support the business after a single bad customer experience, and that an exceptional CX would warrant a 15-percent increase in price premium.

For FIs, CX-related challenges—and business opportunities—can be magnified. The financial services industry is not typically renowned for prioritizing CX, nor for leading the implementation of the latest CX trends and innovations. Against this backdrop, FIs that do not meet the expectations of customers across their lifecycles risk losing their loyalties and may incur increased costs to acquire, engage, and retain customers. By contrast, FIs that have emerged as CX leaders achieved a 72 percentage-point differential in total shareholder gains over the past five years. Understanding the following program trends that underpin a great customer experience can help FIs adapt, strategize, and execute accordingly.

Emerging Trend #1: The global pandemic led to a dramatic shift in how consumers interact with different products, services, and their environment.

One notable shift has been with consumers using the mobile device—due to its ease and convenience—as the primary channel to access and manage their financial accounts. Therefore, FIs looking for opportunities to improve customer journeys should prioritize investing in a digital experience via mobile app.

Optimizing CX on mobile goes well beyond user-interface design. The process also includes evaluating how the products and services are functioning and drawing on the inherent attributes of mobile devices, like geolocation and authentication capabilities, which create countless opportunities for FIs to design and implement banking functionalities and experiential features. One example is the potential for instant digital issuance (IDI) which enables the real-time creation of an account and the delivery of a ready-to-use credential via a digital channel. IDI allows a consumer to start using their payment product immediately and seamlessly, which enhances their experience and typically leads to a five-percent increase in overall transaction volumes.

Emerging Trend #2: Accelerated online application journeys

With FIs competing for consumer attention and engagement, many have sped up and streamlined the online application process to open an account. Research shows that if a digital application takes more than three to five minutes to complete, the applicant-abandonment rate jumps above 50 percent. Additionally, the online account-opening process has shown to have a disproportionate impact on a company’s Net Promoter Score (NPS).

Against this background, innovation in application flows has increased significantly. Many FIs have drawn on the inherent potential of digital channels to bring more speed and less friction to the way consumers open their accounts—and to dissuade them from abandoning their digital applications.

One method FIs are streamlining this journey is by using pre-filled applications requiring consumers to manually enter only a few key pieces of information, while third-party data sources populate the remaining data fields.

Emerging Trend #3: Non-financial perks and features

FIs are increasingly removing barriers between products and services and are integrating non-financial offerings, like complimentary travel-planning services with account signup, on their digital platforms. In doing so, FIs are leveraging their large and loyal customer bases to expand their offerings into adjacent markets and sectors. Access to valuable customer data gives FIs the ability to identify and meet customer needs and cross-sell and up-sell non-financial products and services.

Emerging Trend #4: Financial wellbeing

Open banking, digitization, and automation have taken financial wellbeing programs to new heights. FIs have unique access to a comprehensive view of customers’ financial lives, allowing FIs to provide personalized financial wellbeing advice via automated digital solutions.

Emerging Trend #5: Innovative rewards programs

Many FIs are currently overhauling how their products are designed and how their users are rewarded—both in how they earn and how they redeem rewards—as consumers want simple accessibility, seamless digital functionality, immediacy, and the choice of both transactional and experiential rewards options.

Emerging Trend #6: Hyper-personalization

With recent advancements in data analytics and artificial intelligence, hyper-personalization is elevating the entire customer experience, from application and onboarding stages through the entire duration of the customer relationship.

Emerging Trend #7: Security enhancements

As the reliance on online and mobile-banking services continues to grow, many FIs are looking for new ways to enhance security and protection.

Emerging Trend #8: Streamlined customer service

In one recent survey, 72 percent of U.S. consumers said that when they need help from customer service, they expect to receive it immediately. This indicates there is room for FIs to close this service gap and better meet and exceed customer expectations.

How Visa can help

As a world leader in digital payments, Visa’s mission is to connect the world through the most innovative, reliable, and secure payments network—enabling individuals, businesses, and economies to thrive.

About Visa Consulting & Analytics

VCA is a team of 1,300+ payments consultants, digital marketing specialists, data scientists, and economists across six continents.

The combination of our deep payments consulting expertise, our economic intelligence and our breadth of data allows us to identify actionable insights and recommendations that drive better business decisions.

• Our consultants are experts in strategy, product, portfolio management, risk, digital, and more with decades of experience in the payments industry.