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Digital innovation empowers banks to deliver superior customer experience during unprecedented times

Anirban Bose

While technology’s role has been rising in banking as more customers demand omnichannel digital interactions, the COVID-19 pandemic has upped the ante for digital customer experience. Our recently published research report, COVID-19 and the financial services consumer, revealed that now more than ever FS customers want digital experiences to make transactions and engage with firms from the safety of their homes – and these customers aren’t shy about going to FinTechs or challenger banks to get the digital experience they are craving. For banks too, technology has emerged as a critical enabler to keep businesses up and running, as it facilitates work-from-home capabilities.

For banks, digital banking is a win-win. Not only does it improve customer experience (CX), it also increases operational efficiencies and revenue opportunities. In fact, many banks have undertaken digital transformation initiatives intended to increase internet and mobile banking while pursuing core banking modernization. Banks are embracing emerging technologies such as artificial intelligence, the cloud, and analytics to manage rising operational costs, evolving customer expectations, and cybercrime.

The key challenge for banks before the pandemic was to learn how to collaborate effectively with FinTechs to deliver innovative customer experiences to keep customers coming back for more and compete head on with competition from BigTechs and challenger banks. For all, leveraging emerging technologies to win customers was the number-one strategy to fuel these strategic collaborations.

And then along came COVID-19, and the need to shelter in place to save lives. It was no longer a race to deliver excellent customer experience through digital, it was a necessity. Now, more than ever, is the time to find the right path to deliver innovative digital customer experience – and that path is Open X.

Open X incorporates emerging technologies

The Open X era is characterized by a seamless exchange of resources empowered by expedited product innovation to continuously improve customer experience. By embracing Open X, banks can collaborate with new-age players to reduce risks and improve time to market. However, as we said in the World FinTech Report 2020, an exclusive focus on the customer interaction point does not ensure a delightful last-mile experience. For that, banks need to collaborate and use technology as an enabler that improves the entire value chain – front-, middle-, and back-end.

Figure 1: Emerging technologies in the banking space

Source: Capgemini Financial Services Analysis, 2020

Mobile banking technology: Banks are reimagining ways to deliver an integrated omnichannel banking experience through mobile apps. For example, Capital One’s mobile app can be used across multiple platforms, including the Apple Watch, which keeps track of customers’ credit scores and offers advanced features to track purchases.

Artificial intelligence (AI): Many banks are adopting AI-driven banking systems that leverage vast volumes of customer data to offer solutions such as chatbots, intelligent assistants, and smart wallets to elevate customer engagement. Bank of America’s virtual financial assistant, “Erica,” which has 10 million+ users, offers customized finance guidance, confirms refunds, and provides loyalty rewards program.

Machine learning (ML): Banks are harnessing machine learning algorithms to automate repetitive, slightly complex processes such as answering customer queries. Charles Schwab leverages robo-advisors to assist clients in portfolio management.

Cloud technology: Banks are moving away from traditional infrastructure to cloud-based storage that offers a centralized platform.

Quick response (QR)-code scans: QR code technology offers a simplified way of conducting a payment transaction by scanning the code present at the point of sale. It reduces cash dependence and speeds up the proliferation of mobile payments. Saudi Payments is planning to develop a national QR code platform for use by banks, FinTechs, and merchants across the Kingdom.

Facial recognition and biometrics: Banks are adopting fingerprint, iris, and facial recognition to simplify the banking process while strengthening customer authentication. NatWest(part of the Royal Bank of Scotland) has announced that it will be testing the use of customer fingerprints to make payments.

Taking the next step

In addition to emerging technologies, as the banking ecosystem evolves through platformification and collaboration with FinTechs, opportunities will be generated in the areas of innovative customer targeting, hyper-personalization of services, reconfiguration of delivery channels, and integration of

payments. The transparent Open X ecosystem will support the growth and proliferation of shared APIs through which incumbents and third-party service providers join forces to give customers a superior and contextual experience.

Although the environment is somewhat ambiguous – and certainly unprecedented – digital banking has never been more critical. As a result, firms driven to survive and thrive will prioritize creativity and digital innovation to attract and retain customers as technology becomes more and more interwoven within individuals’ lives.For more on digital banking, visit us at or contact us at