# The new wave of consumer-friendly banking
Author:  Pal Sinha, Barnali 
Author URL: https://financedigest.com/author/pal-sinha-barnali
Published: 2022-04-08
Category: BANKING
Category URL: https://financedigest.com/category/banking
Meta Title: Consumer-Focused Resurgence in UK Banking Sector
Meta Description: Explore how UK banks are adapting to customer demands, integrating digital and in-person services for a more personalised and seamless banking experience.
URL: https://financedigest.com/the-new-wave-of-consumer-friendly-bankinghtml

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_By_ **_David Ritter,_** _Financial Services Strategist at CI&T_

[Recent financial news headlines](https://www.theguardian.com/business/2022/feb/16/weve-had-a-run-on-champagne-biggest-uk-banker-bonuses-since-financial-crash) of record bank profits and banker bonuses often paint banks as villains. However, they miss out that many have lost consumers to upstart rivals recently. Much of the recent surge in earnings instead resulted from a flood of institutional [trading and investment banking](https://www.financedigest.com/britains-digital-banks-need-support-amid-banking-turmoil-trade-body.html "Britain’s digital banks need support amid banking turmoil – trade body") (IPOs, M&A, etc.) – the result of unprecedented global monetary and fiscal stimulus during the pandemic. With banks losing consumers and with the UK’s [worst cost-of-living crisis for 30 years](https://www.independent.co.uk/news/business/uk-inflation-rate-ons-latest-b2016173.html), perhaps it’s no surprise that signs are pointing to a consumer-focused resurgence.

In December 2021, the [FCA finally proposed regulations](https://www.fca.org.uk/news/press-releases/fca-introduce-new-consumer-duty-drive-fundamental-shift-industry-mindset) to establish more robust customer protection and prevent banks from mistreating consumers. Meanwhile, [CMA research](https://www.ipsos.com/en-uk/personal-banking-service-quality-great-britain-february-2022) shows that online rivals are outpacing traditional banks regarding customer service quality. As a result, [nearly 10% of all accounts](https://www.cityam.com/the-unstoppable-rise-of-the-challenger-bank-canary-wharfs-retail-giants-have-reasons-to-be-worried/) are now held with a digital ‘challenger’ bank—growing from just 1% in 2018.

This year, we’ll see a huge battle to win consumers [back as banks strive to balance human](https://www.financedigest.com/putting-the-human-touch-back-into-banking-magazine.html "“Putting the human touch back into banking”-Magazine") and digital services and offer upgraded multi-channel customer experiences. Just like booking or cancelling a restaurant reservation via [OpenTable](https://www.opentable.co.uk/), the future of banking is about instant and seamless communication. It’s also about more personalised approaches to show consumers their complete financial picture and provide new, focused services.

**In-person, targeted experiences**

The [success of digital](https://www.financedigest.com/young-leaders-forum-debating-what-successful-leadership-looks-like-in-the-digital-age.html "Young Leaders Forum, debating what successful leadership looks like in the digital age") challengers makes it tempting to fight fire with fire and invest heavily in online upgrades. But to begin, regional [banks should wield their distinct advantage over rivals—the ability to provide personal service](https://www.financedigest.com/20-billion-in-bank-service-fees-are-you-overpaying.html " Billion in Bank Service Fees: Are You Overpaying?").

The pandemic and surging inflation have created new financial [challenges for consumers and small businesses](https://www.financedigest.com/challenger-banks-missing-golden-opportunity-to-steal-business-from-competitors-by-repeating-same-old-mistakes.html "Challenger Banks Missing Golden Opportunity To Steal Business From Competitors By Repeating Same Old Mistakes"), many of which require a human touch to address. And though internet banking and cashless transactions have enjoyed a meteoric rise, 2020 figures show [1.2 million UK customers](https://www.theguardian.com/business/2021/jun/16/cashless-society-draws-closer-with-only-one-in-six-payments-now-in-cash) still rely solely on coins and notes for their daily spending. In 2022, [bank branches will regain demand as customers seek](https://www.financedigest.com/seven-out-of-ten-uk-adults-aged-25-44-never-seek-advice-on-dealing-with-debts-despite-depending-on-the-bank-of-mum-and-dad.html "Seven out of ten UK adults aged 25-44 never seek advice on dealing with debts despite depending on the bank of mum and dad") trustworthy, in-person financial advice.

This targeted support extends to specific customer segments, too. Elderly people and ‘digital immigrants are the prominent examples—but specific industries also rely on more personalised services. Fintechs [worldwide are narrowing their focus](https://www.financedigest.com/entrepreneurs-worldwide-turn-their-focus-towards-doing-good.html "ENTREPRENEURS WORLDWIDE TURN THEIR FOCUS TOWARDS DOING GOOD"), with Laurel Road, a unit of U.S. bank KeyCorp, launching a [bank specifically for doctors](https://www.finextra.com/pressarticle/86906/laurel-road-launches-digital-bank-for-doctors), undermining traditional assumptions that only a mass-market approach warrants investment. But what makes these tailored [customer experiences](https://www.financedigest.com/visionary-banks-fight-the-blur-hybrid-computing-architecture-brings-a-faster-sharper-customer-experience.html "Visionary banks fight “the blur”: Hybrid computing architecture brings a faster, sharper customer experience") truly special is their integration of in-person service with digital support.

**The multichannel approach**

A personalised [banking service also means](https://www.financedigest.com/banking-turmoil-means-recession-fears-are-creeping-back.html "Banking turmoil means recession fears are creeping back") offering customers the service they want, whenever and wherever they want it. So, for example, [banks must](https://www.financedigest.com/why-finance-professionals-must-bank-on-a-journey-to-the-cloud.html "Why finance professionals must bank on a journey to the cloud") enable consumers to complete transactions and applications digitally, as this is the new industry standard. Customers should also be able to start a transaction on a device and then finish it in a branch, or vice versa.

If staffing difficulties or branch closures impact face-to-face services, [banks must offer](https://www.financedigest.com/first-abu-dhabi-bank-reiterates-not-eyeing-offer-for-standard-chartered.html "First Abu Dhabi Bank reiterates not eyeing offer for Standard Chartered") phone support, online guidance, video calls, and live chats to help customers settle their requests and book an in-person follow-up. Scheduling must be integrated within each product journey, too—if a [consumer visits a bank’s online mortgage service](https://www.financedigest.com/30-per-cent-of-uk-consumers-would-use-amazon-google-facebook-or-apple-for-banking-services.html "30 Per Cent of UK Consumers Would Use Amazon, Google, Facebook or Apple for Banking Services"), they should be able to complete their application and upload their required documents there and then. But if they want to speak to a mortgage expert about their options first, they should also be presented with options for how and when they can interact

McKinsey research shows that [71% of European banking clients](https://www.mckinsey.com/~/media/McKinsey/Industries/Financial%20Services/Our%20Insights/The%20future%20of%20private%20banking%20in%20Europe/the-future-of-private-banking-in-europe.pdf) prefer multichannel interactions to previous approaches. Meanwhile, companies with diverse engagement strategies [retain around 89% of their customers,](https://www.invespcro.com/blog/state-of-omnichannel-shopping/#:~:text=Companies%20with%20omnichannel%20customer%20engagement,for%20their%20business%20in%202015.) compared to just 33% for single-channel businesses. For [banks to be customer-friendly and successful](https://www.financedigest.com/the-journey-towards-a-digital-bank-five-major-stages-to-successful-banking-digitalisation.html "THE JOURNEY TOWARDS A DIGITAL BANK – FIVE MAJOR STAGES TO SUCCESSFUL BANKING DIGITALISATION"), multi-channel is a must.

**Helping customers to help themselves**

Personalised services also require the upskilling of customer-facing [employees](https://www.financedigest.com/four-tips-to-help-reduce-employee-ghosting-in-financial-services.html "Four tips to help reduce employee ghosting in financial services") and services. For example, in the US, Bank of America has recently [launched virtual reality (VR) coaching programmes](https://newsroom.bankofamerica.com/content/newsroom/press-releases/2021/10/bank-of-america-is-first-in-industry-to-launch-virtual-reality-t.html) to help staff practice skills like strengthening client relationships, navigating tough conversations, and interacting with empathy. Real-time analytics also help [managers to spot skill gaps and provide follow-up training](https://www.financedigest.com/prince2-and-msp-training-the-rise-of-online-project-management-courses.html "Prince2 and MSP Training: The Rise of Online Project Management Courses"), resulting in 97% of the pilot programme’s participants feeling more comfortable about their roles.

If UK-based banks have the resources, they may want to follow suit and leverage high-tech in-house tools to transform their customer service, too. But often, this isn’t necessary. Instead, banks can streamline the training process by partnering with personal management fintechs and data aggregators like [Plaid](https://plaid.com/en-gb/) to help customers autonomously manage their finances.

As of late 2021, only [39% of Brits say they feel some sense of financial freedom](https://home.barclays/news/press-releases/2021/08/brits-reveal-what-financial-freedom-really-looks-like0/) in their day-to-day lives. But by introducing tools such as savings targets and adding educational material to online and mobile apps, [banks can support customers to take control of their money and create their own ideal customer experience—with the option of guidance when needed](https://www.financedigest.com/banks-need-to-become-a-lifestyle-brand.html "Banks need to become a lifestyle brand"). Ultimately, the [banks that can provide this perfect mix of human and digital interactions will be in the best position to retain and win back](https://www.financedigest.com/bank-of-englands-mann-doubles-down-on-backing-for-rate-hikes.html "Bank of England’s Mann doubles down on backing for rate hikes") their customers.


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