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Banks and financial institutions are under immense pressure to innovate and modernize their services. The goal is clear: enhance customer experience (CX) to stay competitive in a market where customer expectations are higher than ever. However, significant investments and hard work do not always translate into success. This article explores a real-life example of a bank that faced unexpected challenges after launching a new mobile app, highlighting the critical importance of recognizing and bridging the customer experience gap.
Several years ago, a reputable European bank recognized the urgent need to modernize its digital offerings. In particular, their existing mobile banking application was outdated and held a mediocre user rating of 3.5 out of 5. To improve their image and competitiveness in the digital market, the bank's management decided to develop a new, modern-looking and frictionless mobile app. They ambitiously set a six-month timeline for the design and development process, aiming for a swift launch to capture market share.
Despite the initial plan, the project timeline extended significantly. The bank ended up spending one year and eight months—three times longer than anticipated—developing the new application in-house. This prolonged development period not only delayed the app's release but also substantially increased costs.
Contrary to the bank's expectations, the launch of the new application did not enhance customer satisfaction. In fact, it had the opposite effect. After the release, the app's user rating plummeted from 3.5 to 2.4 and continued to decline even a year later. Instead of delivering an improved user experience, the new app significantly worsened it, leading to widespread customer dissatisfaction.
This situation raises a critical question: How could such a significant investment aimed at improving user experience result in decreased customer satisfaction?
The core issue lies in what is known as the customer experience gap. Despite the dedicated efforts of dozens of the bank's top professionals over 20 months and substantial financial investment, the product failed to meet user expectations. This gap often goes unrecognized within organizations, as companies tend to attribute such failures to external factors:
While these external factors can influence outcomes, relying on them as scapegoats prevents organizations from addressing internal shortcomings. The most critical measure of a company's adaptability and effectiveness is how well its services meet or exceed customer expectations. Companies unaware of the gap between their services and customer expectations are ill-equipped to adapt and thrive.
Additionally, the bank's management was confident in the significant improvements made and invested heavily in advertising the new app. Marketing campaigns promoted it as a brand-new, modern, innovative, and user-friendly mobile app, which raised high expectations among consumers. However, upon release, customers found that the app did not live up to the hype. In fact, it was less user-friendly than the previous version.
This disconnect led to a massive wave of negative reviews, not only on the App Store and Google Play but also across social media platforms. Customers expressed their frustration and disappointment publicly, with many sarcastically commenting on the bank's failed digitalization efforts. The bank's reputation suffered as a result.
The critical issue here is the bank's unawareness of the customer experience gap. Such gaps are often unnoticed within organizations because their causes are not immediately apparent and exist at multiple levels simultaneously. Their subtle influence can lead to destructive consequences unexpectedly, and by the time the impact is realized, it may be too late to prevent market failure.
One of the main challenges in bridging the experience gap is that awareness diminishes higher up the organizational hierarchy. The root causes often lie at the top levels of management, where decision-makers may be disconnected from the day-to-day realities faced by customers and front-line employees. Conversely, employees on the lower rungs of the hierarchy, who interact directly with customers, are more acutely aware of the problems and gaps. However, they often lack the authority or means to address these issues due to organizational culture and constraints.
In this particular case, the support department was inundated with thousands of calls daily from customers struggling with the new app. Due to fragmented business processes and internal silos, support staff were unable to escalate or resolve these issues effectively. Their hands were tied by bureaucracy and a lack of responsiveness from higher management.
As customer frustration grew, users faced issues that made it difficult to perform even the simplest everyday banking tasks. Instead of receiving assistance, customers were told by bank employees that they were "not the only ones struggling" and that the bank was currently focused on developing new features rather than fixing existing problems. This response further alienated customers, who felt their concerns were not being taken seriously.
Complicating matters further, the internal processes contributing to the experience gap were rooted in the same mechanisms that had previously facilitated the company's survival and growth. Organizational inertia, supported by entrenched beliefs and values, created resistance to recognizing and addressing the gap. Efforts to identify and close the experience gap were hindered by:
To effectively bridge the gap, the issue needed to be addressed at the management level. Without leadership acknowledging and prioritizing the problem, frontline employees remained powerless to enact meaningful change.
According to Forrester's research top challenges to delivering a good CX are internal struggles: the lack of a cohesive strategy across teams (48%) and silos of various CX operations and functions across the organization (38%). The main experience gap may be caused by blindspots in one or several of the seven levels (culture, feedback, execution, design, value, brand promise, emotional connection) in the financial organization.
The lack of customer-centricity at the level of culture prevents employees from bringing service closer to customer expectations and causes a "culture gap". The processes and activities that contribute to customer-centricity in a company with a "culture gap" will not have priority and resources will not be allocated to them.
Lack of data about customer expectations and their experience with a product or service creates a "gap of feedback". Here, financial companies often even collect the data but it's not analyzed and no action is taken to improve the situation.
Even if a customer-centered approach is a priority and a large amount of data about customer expectations is collected, there could still be a gap concerning the design competence and methodology. Having the right expertise in place allows to build a high-quality ecosystem of digital products that will provide the best possible service according to customer needs.
This gap is associated with poor design execution. If user-centered product design is not a priority, decisions and efforts to create the final product and service are of low quality and efficiency. This determines the company's ability to create competitive services and products in the digital age.
The value gap can form if the design ecosystem is not in compliance with user expectations at the five levels of the User Experience Value pyramid: functionality, usability, aesthetics, status, mission.
As my example with the bank demonstrates, if a company aggressively promotes its service, promising something that the product is not able to provide, it will lead to even higher disappointment in user expectations. As a result, the negative assessment of the service could double since the advertising promises don't meet reality.
If brand communication is purely informational, focused on functional features, then an emotional connection with users can't be formed. Since humans make decisions based on emotions, building service value on an emotional basis has a positive effect on customer expectations and the end user experience.
This survey is designed to help financial companies identify gaps in their digital customer experience. By assessing various aspects of your organization's culture, processes, and customer interactions, you can pinpoint areas for improvement and develop strategies to enhance customer satisfaction and loyalty.
Instructions: For each statement below, please indicate your level of agreement based on the following scale:
1 - Strongly Disagree 2 - Disagree 3 - Neutral 4 - Agree 5 - Strongly Agree
Scores 4 and 5 indicate strengths in that area.
Scores 1 and 2 suggest potential gaps that need addressing.
Purpose: Assess the level of customer-centricity within your organization's culture.
Purpose: Evaluate how effectively your organization collects and utilizes customer feedback.
Purpose: Determine the effectiveness of your digital product design and UX methodologies.
Purpose: Assess the quality and efficiency of executing design and development projects.
Purpose: Evaluate whether your products deliver value across all levels of the Value Pyramid.
Purpose: Check if there's alignment between marketing promises and actual customer experience.
Purpose: Assess the emotional connection between your brand and your customers.
By completing this survey, you will gain insights into areas where your organization excels and areas that may require improvement to enhance your digital customer experience. Analyzing the results can help you develop targeted strategies to close these gaps, leading to improved customer satisfaction, loyalty, and business performance.
Check out my blog about financial and banking UX design >>
This content is provided by an external author without editing by Finextra. It expresses the views and opinions of the author.
Hassan Zebdeh Financial Crime Advisor at Eastnets
08 October
Jelle Van Schaick Head of Marketing at Intergiro
07 October
Kuldeep Shrimali Consulting Partner at Tata Consultancy Services
Nikunj Gundaniya Product manager at Digipay.guru
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